Powerball: Why States Depend on the Lottery and Increase Chances to Win

The $1.5 billion Powerball lottery plays a part in state budgets. Lotteries bring in state revenue. According to an analysis of census data done on Wednesday, Jan. 13, 2016, it accounts for approximately two percent of a participating state’s revenue. However, The Washington Post reports that in October there was a documented change in the lottery rules. The change made it easy for the Powerball jackpot to reach its historic high of $1.5 billion because it makes it harder for people to win. Although it is easier for a player to win a prize, a Powerball player now has a 1 in 25 chance of winning a prize, whereas, before the rule change, players had a 1 in 32 chance.

The executive director of the Texas Lottery, Gary Grief, stated that winning the entire jackpot is much harder. The odds for the entire Powerball jackpot were 1 in 175 million and now they are 1 in 292 million. This results in growing jackpots because drawings do not produce winning tickets. In the 23-year history of the Powerball lottery, there have been seven rule changes. The purpose of the changes was to ensure the game continued to attract players by delivering large, attractive jackpots.

The grand prize goes to the ticket holder whose numbers match all five white balls and the red Powerball. Smaller prizes can be won when a ticket number matches the red Powerball, any of the white balls, or a combination of the two.

To make the lottery more difficult to win, the association that runs Powerball added more white balls. That changed the number in the pool from 59 to 69 and doubled the combinations of white balls. However, by increasing the chances of winning a prize, the number of Powerball options was decreased from 35 to 26.

A gentleman in Orlando, Florida, named Richard Lustig, has won lottery grand prizes seven times. He offers a few tips on how to increase the chance of winning the grand prize.

  1. Do not spend money that has been set aside for something else, such as groceries or rent. A person should not spend their last few dollars on a lottery ticket. However, if a person has the money, they should buy as many tickets as they can afford.
  2. Do not choose anniversaries or birthdays because those are only numbers 1 – 31, but the Powerball numbers go up to 69. Play random numbers and play often.
  3. Lustig also recommends buying 10 scratch-off tickets in a row of the same game. This is almost a guarantee that at least one of the tickets will be a winner.
  4. Do not buy lottery tickets where the numbers are computer-generated. The odds on these lottery tickets are terrible.

Researchers Lucy Dadayan and Donald J. Boyd have discovered that some states rely more heavily on the Powerball revenue than others. For example, Oregon, Georgia, and South Dakota received five percent in state revenue from lotteries in 2014. According to the North American Association of State and Provincial Lotteries, lotteries, such as the Powerball, generated $70 billion in sales in 2014. However, a lot of that money does not make it back to the states that run the lotteries.

According to Dadayan and Boyd, after prize payments, associated expenses, and administrative costs, there is $18 billion left for the states. There are states that use that money for specific funds, such as education. However, “officials often game their own promises.”

When the lottery is higher than expected, such as the $1.5 billion Powerball, states can reduce non-lottery support. This releases funds for necessary allocations in the state’s budget, instead of increasing the spending on the already dedicated programs, reports Dadayan and Boyd.

Different states use their lottery money for dedicated purposes. The Washington Post reports that Indiana, for example, uses the money to reduce the motor vehicle excise tax and to fund parks, roads, and infrastructure. Also, the state money is used for pensions for police officers, firefighters, and teachers. However, it should be noted that 14 of the 44 states which participate in the lottery use the revenue strictly for educational funding.

By Jeanette Smith
Edited by Leigh Haugh

The Washington Post: The states that rely on Powerball and lotteries the most
The Washington Post: How Powerball manipulated the odds to create a $1.5 billion jackpot
WWLTV: 7-time lottery winner gives tips on increasing your Powerball chances
Image Courtesy of Scott Mindeaux’s Flickr Page – Creative Commons License

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