Earlier this month, someone in Jacksonville, Florida, purchased a winning Mega Millions lottery ticket. The payout? $1.58 billion.
It was the second billion-dollar jackpot won this year between the Mega Millions and Powerball multi-state lotteries and the seventh overall. Curiously, jackpots of $1 billion or more didn’t exist before 2016. To get to the bottom of that mystery, we’ll go back to 2015.
Powerball altered jackpots forever in 2015
The odds of winning multi-state lotteries like Powerball and Mega Millions are insanely small.
Before 2015, you had a 1-in-175.2 million chance of hitting the Powerball jackpot. In 2015, Powerball officials decided to make winning the jackpot nearly twice as hard, decreasing the odds from 1-in-175.2 million to 1-in-292.2 million.
Two years later, Mega Millions officials lowered the odds of winning the jackpot from 1-in-258.9 million to 1-in-302.6 million.
Lower winning odds also affected smaller prizes
US Lottery officials made changes to the odds of winning non-jackpot prizes, too, noted Dr. Sheldon H. Jacobson, founder and professor of computer science at the University of Illinois.
For example, the expected return on a Powerball ticket dropped from 36 cents per ticket to 32 centers per ticket after 2015. The expected return on a Mega Millions ticket, however, rose from 17 cents per ticket to 24 cents per ticket.
In both cases, the expected return on a ticket purchase is considerably smaller than the $2 that customers invest in a ticket.
And how did those changes affect the lottery big picture? From a customer’s perspective, not much; they kept buying tickets. Jacobson told PlayUSA in an interview:
“Most people focus on the jackpot, which has astronomically small odds of being won. After the initial ‘shock’ of lower jackpot odds for both games, people adjusted and kept playing.”
But from the lottery’s perspective, Jacobson noted, lower odds meant bigger jackpots, which is good for business.
“For Megamillions, the jackpot is being won slightly less frequently per year today than 10 or 20 years ago,” Jacobson said. “The slightly lower odds are contributing to this.
With fewer jackpots won, the jackpot climbs, which drives ticket sales, which produces more billion-dollar jackpots, which drives ticket sales.”
The history of billion-dollar jackpots bears this out; they did not exist before 2016. Not a single jackpot of more than $700 million had ever been won before Powerball and Mega Millions implemented their odds changes.
The following table shows the top-five biggest jackpots won in both games:
|Jackpot Rank||Mega Millions||Powerball|
|1||$1.60 billion (2023)||$2.04 billion (2022)|
|2||$1.54 billion (2018)||$1.586 billion (2016)|
|3||$1.348 billion (2023)||$768.4 million (2019|
|4||$1.34 billion (2022)||$754.6 million (2023)|
|5||$1.05 billion (2021)||$731.1 million (2021)|
Do bigger jackpots benefit lottery players?
Generally speaking, bigger jackpots do not benefit lottery players. While the prospect of winning a life-changing sum of money may motivate individuals to buy tickets, lotteries are a losing proposition from an odds perspective.
“The lotteries love large jackpots,” Jacobson said. “They are ‘the house’ in the lottery casino that always makes money. As people buy more tickets, hoping for the billion-dollar payout, the big winner is the lottery.”
Jacobson also said that lottery players shouldn’t just focus on the jackpot since the odds are far-fetched:
“The jackpot is not what people should target. The lesser prizes are returned to the lottery ticket purchasers with greater frequency [but with lower dollar values]. For these players, they have a net negative return with each ticket.”
In short, Jacobson said, lottery players should view Mega Millions and Powerball as entertainment, not a way to make money.