Why are lottery jackpots getting bigger? We look at Powerball & Mega Millions growth
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Lotto jackpots have been reaching sky-high figures in recent years, a trend that is making these big games more appealing.
The average Powerball jackpot has seen a significant jump, more than doubling in the past decade.
It's now over six times larger than the average jackpot in the first 11 years of Powerball's history.
This increase can be put down to several key changes, including Powerball's expansion to include 45 states, Washington DC, Puerto Rico, and the US Virgin Islands.
This was up from just 14 states and DC in 1992.
As well, the price of a Powerball ticket was raised to $2 in 2012.
And an additional Monday night draw was introduced in 2021, adding to the appeal of the game.
Despite the astronomical odds of winning, which are lower than the chances of being struck by lightning or encountering a grizzly bear in Yellowstone National Park, millions continue to try their luck.
This growing trend of gigantic jackpots is no accident, but the result of deliberate changes in the lottery system, along with economic factors like rising interest rates.
2023 has seen the jackpot cross the $750 million mark three times, a clear indicator of the changing landscape of lottery jackpots.
This is largely due to significant rule changes for major lotteries such as Powerball and Mega Millions.
Another pivotal moment came in 2009 when a decision was made to allow states to sell tickets for both lotteries.
It was a move aimed at attracting more players and, consequently, increasing jackpot sizes.
In 2017, Mega Millions followed Powerball's lead by raising ticket prices and expanding the range of number combinations, making it harder to win the jackpot but ensuring that when jackpots roll over, they grow even larger.
The size of these jackpots is also influenced by the current economic conditions, especially interest rates.
Winners face a choice between taking a lump sum or opting for an annuity paid over 30 years, with the latter being invested in U.S. Treasury bonds.
As interest rates rise, so does the payout, further inflating the jackpot amounts.
So the changes made by lottery organizers, along with higher interest rates, have led to huge jackpots. This has made winning more attractive, bringing in more players and raising the stakes to new highs.
People are excited not only about the chance to win but also to see how much the jackpot will grow.
