- The Mega Millions jackpot is now $1.6 billion after Friday’s drawing with no winners.
- Though that’s a pretty big prize, working through the math of how lotteries work suggests that buying a ticket is not a great investment.
- The low probability of winning and the risk of splitting the prize in a big, highly covered game mean you’d probably lose money.
- READ MORE: Here are the winning numbers from the $1 billion Mega Millions jackpot drawn October 19.
Andy Kiersz, Business Insider, October 22, 2018
[A] recent rule change has made it harder for anyone to win the estimated $450 million jackpot (or $281 million if you opt for the cash buyout).
Mega Millions (and Powerball, whose Saturday-night jackpot now stands at $570 million) discovered that when the jackpot grows to an absurdly high figure, even skeptical players will buy tickets (New York Lottery’s commission tagline: “Hey, You Never Know”). Kelly Tabor, a spokeswoman for the Colorado Lottery, called them “jackpot chasers” in August.
Tabor also said customers wanted more chances to win smaller prizes. In response, both Powerball and Mega Millions tweaked their formulas.
Reducing the number of balls for the first five numbers increases the chances of winning a smaller prize. But raising the number of Mega balls makes it harder to win the jackpot.
“Starting jackpots will more than double from $15 million to $40 million, and jackpots will grow faster overall. There will be better odds to win $1 million prizes and higher secondary prizes,” the multi-state lottery said in a release.
Alex Horton, Washington Post, January 5, 2018
Despite widespread acceptance of state-backed lotteries, when Powerball ticket sales declined in all but four states and sales nationwide dropped by 19 percent, the Multi-State Lottery Association decided it was time to do something.
Industry insiders attributed the decline to “jackpot fatigue,” which meant that casual players bought tickets only when a huge jackpot was up for grabs.
The resolution: The association looked at rule changes to address the falling revenue problem and implemented them in 2015….This change meant the overall odds of winning any prize improved, going from 1 in 32 to 1 in 25, but the odds of winning a jackpot would drop from 1 in 175 million to 1 in 292 million.
Psychologists and behavioral economists, however, have long known that the perceived value of a lottery ticket may be quite different from expected value.
Manel Baucells and Gerry Yemen, Washington Post, August 23, 2017