CHICAGO — Get your ticket!
Eight months after a trio of ticket buyers split a $656 million Mega Millions jackpot to set a world lottery record, Powerball is offering up a prize that would be the second highest.
The $500 million jackpot, the largest in Powerball’s history, represents a potential life-changing fortune. But before shelling out $2 for a ticket, here are some things to consider:
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A GOOD BET: SOMEONE WILL WIN
It’s the gambler’s mantra: Somebody’s gotta win, so why not me?
The first part is true; somebody will win the Powerball jackpot.
Chuck Strutt, executive director of Multi-State Lottery Association, predicts there’s about a 60 percent chance it’ll happen Wednesday — maybe better if there’s a flurry of last-minute ticket purchasers picking unique numbers.
The jackpot already has defied long odds by rolling over 16 consecutive times without anyone hitting the big prize, which now stands at $500 million ($327 million cash value). Strutt puts the odds at around 5 percent there would be no winner in the entire run through Wednesday.
As the drought increases, so too will the chances of it ending on the next draw, because ticket sales spike with a growing jackpot.
Someone will win. Eventually.
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A BAD BET: IT’LL BE YOU
It’s true to say that you have a better chance of being struck by lightning than winning the Powerball. But that woefully understates the danger of lightning.
Tim Norfolk, a University of Akron mathematics professor who teaches a course on gambling, puts the odds of a lightning strike in a person’s lifetime at 1 in 5,000. The odds of winning the Powerball jackpot: 1 in 175 million.
While weather is the go-to analogy for such astronomical odds, Norfolk suggests there are better ones.
For example, you’d have a slightly better chance of randomly picking the name of one specific female in the United States: 1 in 157 million, according to the latest census.
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VICTORY LOVES COMPANY
Should you win the jackpot, there’s a good chance you’ll have to share — and not just with family, friends and Uncle Sam.
The odds of someone winning increase as the ticket sales do. So, too, do the odds of duplicate tickets, especially for people who choose their own numbers rather than letting the computers pick.
Prefer the lucky numbers of seven or 11? You’re not alone. How about a loved one’s birthday? It’s 31 or lower — digits more frequently duplicated than 32 and up. (There are 59 white balls and 35 red balls in the draw).
Norfolk predicts that if there is a winner, there will be multiple ones because mathematical theory shows that numbers have a way of clustering, even at much smaller sample sizes.
If you take 23 random people, there’s about a 50-50 chance that at least two will have the same birthday, Norfolk said. Throw choice into the equation — about 20 percent of players typically select their own numbers — and the clusters could be even more defined.
That played out in March, when three tickets from Kansas, Maryland and Illinois split the world-record $656 million Mega Millions jackpot.
A single ticket holds Powerball’s current record of $365 million in 2006, shared by several ConAgra Foods Workers in Lincoln, Neb.
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FEELING LUCKY IN A BAD ECONOMY
Gambling experts say a majority of Americans will play some lottery game at least once in a given year.
Clyde Barrow, director of the Center for Policy Analysis at UMass-Dartmouth, says addicted gamblers are less likely to turn to massive jackpot ticket games like Powerball than scratch-off games.
“Scratch-off players are looking for instant gratification and an instant win,” Barrow said. “A lot of those people don’t like playing lotto because you have to wait. You have to sit on it for a few days.”
While it may seem counterintuitive, Barrow says gambling activity often increases as the economy gets worse and people have less disposable income. However, his research — which focused mainly on New England — found the trend reversed in the latest downturn.
“The Great Recession has been so deep and so long, it’s suppressed any kind of discretionary spending across the board,” said Barrow, who added about the same percentage of people are playing the lottery — they’re just buying fewer tickets.
Strutt, Powerball’s executive director, said sales largely stayed flat during the peak of the recession in 2008 and 2009, but picked up since.
“Our biggest factor is gas prices,” he said. “If people go to a gas station and put 80 bucks of gas in their car, they’re not feeling happy to buy a lottery ticket.”
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RIG-PROOF LOTTERY?
It’s conceivable you could win Wednesday night’s drawing, just not the right one.
In addition to the official one televised nationally from Tallahassee, Fla., there are four practice runs. The reason, Strutt says, is to make sure the machines are running properly and the numbers are being distributed properly.
The balls used in the game are regularly measured, weighed and X-rayed. Then they’re locked up in a room that’s under 24/7 surveillance. Only the organizers and their auditors have a key.
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IS IT A GOOD INVESTMENT?
You already know the answer to that. Yet people play anyway.
Strutt is estimating that there will be $214 million in sales for Wednesday’s drawing (up from $140 million from Saturday’s drawing).
Half the proceeds go to the prize pool — about a third of that to the big jackpot, with the rest to lower ones, including a new $1 million second prize. The other half goes to the lottery operations in the 42 states plus Washington, D.C., and the Virgin Islands where Powerball is played. This funds charitable efforts such as education, in addition to paying for overhead and compensating winning stores.
Barrow says it’s no secret that it’s not a prudent investment to regularly buy lottery tickets, but he contends it’s a little more defensible as the amount skyrockets.
If the jackpot amount approached $600 million, and if you had the means to buy enough tickets until you won, AND if you could guarantee you wouldn’t have to share with anyone, then it might be a wise investment, he said.
That’s a lot of ifs, Barrow acknowledges. Still, he says he’ll likely join the throngs of ticket buyers.
“For two bucks, it’s worth a chance,” he said. “What else am I going to do with that $2? I’ll just waste it on something else.”
Meanwhile, the historic jackpot was all part of a plan lottery officials put in place early this year to build jackpots faster, drive sales and generate more money for states that run the game.
Their plan appears to be working.
Powerball tickets doubled in price in January to $2, and while the number of tickets sold initially dropped, sales revenue has increased by about 35 percent over 2011.
Sales for Powerball reached a record $3.96 billion in fiscal 2012 and are expected to reach $5 billion this year, said Chuck Strutt, executive director of the Des Moines, Iowa-based Multi-State Lottery Association, the group that runs the Powerball game.
There has been no Powerball winner since Oct. 6, and the jackpot already has reached a record level for the game. It was first posted at $425 million but revised upward to $500 million when brisk sales increased the payout. It’s the second highest jackpot in lottery history, behind only the $656 million Mega Millions prize in March.
It took nine weeks for the Mega Millions jackpot to get that high, before three winners — from Kansas, Illinois and Maryland — hit the right numbers, each collecting $218.6 million for their share of the split.
With soaring jackpots come soaring sales, and for the states playing the game, that means higher revenue.
“The purpose for the lottery is to generate revenue for the respective states and their beneficiary programs,” said Norm Lingle, chairman of the Powerball Game Group. “High jackpots certainly help the lottery achieve those goals.”
Of the $2 cost of a Powerball ticket, $1 goes to the prizes and the other dollar is kept by the state lottery organization, said Lingle, who also is executive director of the South Dakota Lottery. After administrative overhead is paid, the remaining amount goes to that state’s beneficiary programs.
Some states designate specific expenditures such as education, while others deposit the money in their general fund to help supplement tax revenue.
The federal government keeps 25 percent of the jackpot for federal taxes.
Most states withhold between 5 percent and 7 percent. There’s no withholding in states without a state income tax such as Delaware, Pennsylvania, South Dakota, and Texas. A New York City winner would pay more than 12 percent since the state takes 8.97 percent and the city keeps 3.6 percent.
Powerball and Mega Millions games are seeing jackpots grow faster and higher in part because the states that play both games agreed in 2010 to sell to one another.
Both games are now played in 42 states, Washington, D.C., and the Virgin Islands. The larger pool of players means jackpots roll over to higher numbers faster, which tends to increase the buzz about the jackpots which increases sales. It all can result in higher jackpots sooner.
“It really happened with both of these games became national games,” said Terry Rich, CEO of the Iowa Lottery.
Still, just seven of the top 25 jackpots occurred after January 2010 when the cross-selling began. That just points to the unpredictability of games of chance like lotteries. It still comes down to the luck of the numbers, Rich said.
It has been proven that once the jackpot reaches a certain threshold more players buy.
The Quick Shop in Ottumwa, Iowa, is one of the state’s highest-volume lottery ticket sellers due to its location across the street from a John Deere farm implement factory.
“It’s picking up by the minute,” said store owner Mark Ebelsheiser. “We’re selling probably 60 to 70 percent more than normal. When it gets up this high they really come out and get them.”
Bob Allison, a retired Indian Hills Community College instructor and administrator, buys tickets weekly for a group of people at the college in Ottumwa. On Tuesday he and two golfing and fishing buddies went in together to buy additional tickets. Allison said he usually buys a few additional tickets when the jackpot gets so high.
He said he’d make a lot of people very happy if he won.
“My kids would probably retire quick,” said the father of three daughters.
Between $20 and $30 million in tickets were sold between Wednesday and Saturday drawings for most of October. Once the jackpot hit $100 million on Oct. 27, nearly $38 million worth of tickets were sold by Oct. 31. As the jackpot grew to more than $200 million on Nov. 17, sales surged by nearly $70 million by the next Wednesday. Then the jackpot reached over $300 million on Nov. 24 and ticket sales over the next four days surpassed $140 million.
“Somewhere around $100 million those occasional players seem to come back into the stores in droves,” said Rich, the Iowa Lottery CEO. The lottery also notices a significant increase in workers and other groups joining together in pools to combine resources to buy numbers, he said.
Trina Small, manager at the convenience store in Bondurant, Iowa, where a couple bought a $202 million ticket on Sept. 26, said sales have been heavy. She said Monday night Powerball sales were at about $800, at least $200 more than normal. She expects Tuesday and Wednesday sales to be even more.
“It’s kind of like Black Friday all over again,” she said.
Small doesn’t usually play the lottery herself but said she may buy a chance at the record jackpot. She’s just trying to decide if her chances are better buying it elsewhere since a jackpot ticket was sold at her store just two months ago — the old adage about lightning striking twice.
“The odds are against you anyway but I’m pretty sure they’re more against you getting one from this store,” she joked.
Powerball has posted sales exceeding $714 million in the current jackpot run since early October and it’s possible more than $1 billion in tickets will have been sold by the end of Wednesday when the next drawing is held.
A single winner choosing the cash option would take home more than $327 million before taxes.
Strutt said the chance of getting a winner this Wednesday is approaching 60 percent.