The Powerball lottery is holding the 11th-largest drawing in the history of United States lottery gaming tonight. The Powerball jackpot is now up to $422 million. The estimated cash value of a lump sum payment is $291.8 million.
The last winner happened on May 7, 2016, when the Smith Family Lottery Pool won $429 million and a lump-sum after taxes of $284 million. Two-and-a-half months have passed since the last winner, so the prize pool has risen into the Top 10 ranks.
Bigger Prizes Since 2012
The new, larger prizes have been occurring with greater frequency over the past few years, since the Powerball raised the ball total in order to make the hit frequency less. With bigger prizes, more people buy more tickets.
The odds of winning the Powerball lottery are tiny, about 292.2 million-to-1. Players have much better odds of winning smaller prizes, which range between $4 to $1 million. The average odds of winning some prize (usually $4) is 1-in-25.
Biggest Prize Pool Ever
The buzz around the Powerball is nothing compared to what it was on January 13, 2016. Players in California, Florida, and Tennessee shared a prize worth nearly $1.6 billion, which was the largest prize pool ever.
In that case, the prize amount was $1.5864 billion. The total cash value was $983.5 million, while each winner received $327.8 million. Those three winners did not receive the largest single payout, though.
Highest Payouts Ever
The highest annuitized payout was on May 18, 2013, when a player from Florida won a $590.5 million Powerball prize. The annuitized payout was $370.9 million, which is paid over a 29-year period.
The highest single lump-sum payout was on July 8, 2016, when a play won $536 million on the Mega Millions. The winner, who received a $378.3 million cash prize, was a resident of Indiana.
Attitudes Towards Lottery Gaming
Those who do not play the lottery tend to dismiss the lotto gaming as a tax on the poor. While that is a sweeping generalization, it is understood by knowledgeable gamblers that lotteries have the highest house edge of any form of legal gambling. In fact, if any private enterprise tried to pocket as much of the wager as the multistate lottery associations or state lotteries do, it would be illegal.
Despite that, lottery betting has risen in popularity steadily over the decades in the United States. Now, 47 US states have lottery betting in one form or another, while the Powerball and Mega Millions lottery associations have seen their payouts skyrocket.
The Lottery Is Big Business
Lottery-support companies like Scientific Games and GTECH have become some of the richest gaming companies in the world, able to acquire huge gaming manufacturers like Bally Technologies and IGT. Lottery is a big business, because it has mass appeal and is played by a much larger segment of the population than casino gambling, poker, or sports betting. These are casual gamblers, who pick up a lottery ticket as they fill their car up with gas.
As a general rule in gambling, the higher the payout, the lower they odds. Therefore, games like lotteries, raffles, keno, and other games with drawings give gamblers the lowest odds of winning. Slot machines with progressive jackpots are next on the list. While video slots have a higher house edge than games like blackjack, baccarat, or video poker, progressive slot machines are a lot more popular. They generate as much as 70% of a casino's revenues.
Life-Changing Jackpots
The reason is simple: lotteries and progressive slots offer life-changing jackpots. If a player wins at the blackjack or craps table, it is seldom going to be an amount someone could retire on. Players bet the lottery or hit "Spin" on a progressive slot with that slim hope that they win a big enough prize that they can retire, tell their boss to shove it, and still build their dream home.
Few get that experience, but the mere fantasy of it keeps people coming back for more. As the prizes go higher, people who don't normally gamble tend to play the lottery. A person who might not bet the Powerball or Mega Million for $30 million or $40 million is suddenly very interested, if the prize is $300 million or $400 million.
Perhaps it plays to a person's sense of grandiosity or megalomania. Anyone could probably use an injection of $30 million, yet it hardly seems to interest many. Perhaps the idea that lotteries are for plebeians takes a hold of people. When the prize gets large enough, they see it as a positive expectation game which any wise gambler must try.
Update
The five standard balls chosen were 10-47-50-65-68, while the Powerball number was 24. No winning ticket was sold, so the new jackpot is $478 million. The next drawing is on Saturday, June 30.
