Reduced Mega Millions, Powerball Jackpots Hurting State Lottery Revenues
Posted on: December 2, 2019, 09:38h.
Last updated on: December 2, 2019, 12:00h.
Lower Mega Millions and Powerball jackpots this year are causing reduced interest in the country’s two most popular games, and that is subsequently leading to lower tax revenues for state lotteries.
Players have been lucky this year, and that’s keeping others away who tend to only play when the Mega Millions and Powerball jackpots hit levels so high they make mainstream news headlines.
Since July 1, the Mega Millions jackpot has been at or below $100 million in 20 of its 42 drawings. Its peak is currently where it stands today – $266 million. The next Mega Millions drawing will occur tomorrow at 11 pm ET.
During that same time frame, Powerball has been at $100 million or less in 29 of its 42 drawings. Its highest jackpot during the period was $198 in mid-July.
Both Mega Millions and Powerball are multi-state lotteries. All profits are retained by the lottery that sold the ticket.
Due to reduced ticket sales in Mega Millions and Powerball, state lotteries are suffering. New York, the richest lottery in the US, said the two games last year accounted for $870 million of its $8.2 billion in total sales – nearly 11 percent.
Massachusetts residents spend the most on the lottery. 24/7 Wall St. reports that the average resident there spends a staggering $926 on tickets each year. However, Massachusetts Lottery executive director Michael Sweeney revealed last week that sales in 2019 are down because of the two leading multi-state formats.
Sales in October totaled $414.2 million in the Bay State, a decline of $61.7 million compared to October 2018.
The real majority of that net profit impact is coming from the lack of the Powerball and Mega Millions sales, which are two of our more profitable games,” Sweeney explained at a Lottery Commission meeting. “Our overall numbers for sales in October were actually pretty good across the product line.”
“The killers here are Mega Millions and Powerball,” Sweeney concluded.
The chances of hitting either multistate jackpot are nearly insurmountable. But don’t tell that to the dozens of lucky winners in recent months.
Powerball offers jackpot odds of 1 in 292,201,338. Mega Millions jackpot odds are even longer at 1 in 302,575,350.
Powerball was altered in 2015 by reducing the number of Powerballs by nine. But the number of white balls increased by 10. Two years later, Mega Millions was overhauled by increasing the number of Mega Ball numbers from 15 to 25.
The changes severely lengthened one’s odds of hitting the jackpot. The goal was to create larger jackpots that attracted those who typically don’t gamble on the games.
“These games, they’re all about the jackpots,” Mega Millions director Gordon Medenica explained. The Multi-State Lottery Association (MUSL) had early expressed concerns that frequent jackpot hits could lead to a potential “jackpot fatigue” among regulars.
The modifications worked, as the top five largest lottery wins in US history have all occurred since 2016.
- Jan. ’16: Powerball $1.586B (three winners split)
- Oct. ’18: Mega Millions $1.53B (one winner)
- March ’19: Powerball $768.4M (one winner)
- Aug. ’17: Powerball $758.7M (one winner)
- Oct. ’18: Powerball $687.8M (two winners)
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