The U.S. lottery industry set a new record over the weekend when the Mega Millions jackpot grew to a whopping $1.6 billion, narrowly eclipsing a $1.58 billion Powerball drawing in early 2016.
Mega Millions, which is played in 44 states, Washington, D.C. and the U.S. Virgin Islands, rolled over 25 consecutive times without a winning ticket prior to Tuesday’s scheduled drawing. In July, a group of co-workers in California were winners in a $543 million Mega Millions jackpot.
Longer odds, bigger jackpots
Though the $1.6 billion pot is astounding, it’s part of a growing trend for Mega Millions and Powerball. Six of the top 10 jackpots in history have come since 2015. The Powerball jackpot stood at $620 million ahead of its Wednesday drawing, good for sixth all time. Unfortunately for Powerball, Mega Millions is grabbing most of the headlines.
Combined, there’s more than $2.2 billion up for grabs in this week’s drawings.
“Mega Millions has already entered historic territory, but it’s truly astounding to think that now the jackpot has reached an all-time world record,” Gordon Medenica, lead director of the Mega Millions Group, said in a statement following Friday’s drawing. “It’s hard to overstate how exciting this is.”
Mega Millions hit the $1-billion mark late last week, marking only the second time there’s been a 10-figure prize for lottery gamblers. The odds of winning Mega Millions are about one in 302.5 million, longer than the pre-October 2017 odds of one in 258.9 million. Two years earlier, Powerball tweaked its game to worsen the odds from about one in 175 million to one in 292.2 million.
The changes have created enormous buzz for Mega Millions and Powerball, which both cost $2 to play. Mammoth jackpots helped fuel the U.S. lottery market to a record $73.3 billion in sales in 2017, up 1.3 percent over 2016. Draw-based games like Mega Millions and Powerball accounted for about 36 percent of the market. Lottery sales over the internet, available in about 10 states, are still negligible relative to the overall market. Online lottery revenue for the minority of states with the offerings grew 30 percent to $176 million in 2017.
How much is $1.6 billion?
Lottery players are gamblers, through and through. To put the Mega Millions jackpot into some casino-related context, the $1.6 billion purse is larger than the commercial casino markets in several gambling-friendly jurisdictions. According to figures from the American Gaming Association, states like Michigan, Iowa and Illinois all saw their respective casinos win fewer dollars from gamblers in 2017 than what could be awarded to a single person in Tuesday’s 11 p.m. ET drawing.
Of course, any lucky winner–or winners–can choose either the cash or annuity option. The lump sum payment from the $1.6 billion is nearly $905 million. If the cash option was its own drawing, it would be the third largest lottery jackpot in history. The lump sum would drop to less than $700 million after taxes, with the precise amount depending on the state where the winner lives. The annuity route would provide pre-tax payouts of about $53 million over 30 years.
Despite the cash option potentially making one lucky winner close to a billionaire, you probably couldn’t parlay a win into ownership of an NFL team, for example. Thanks in part to the growing popularity of sports betting and its subsequent proliferation, franchise values have skyrocketed in recent years. Winning the Mega Millions wouldn’t give you enough wealth to purchase the Cleveland Browns, valued at nearly $2 billion, according to Forbes.
Carnival game odds
Common wisdom says that 10-figure jackpots make the lottery a fun social activity, despite the astronomical odds. There are many incredibly rare events that seem almost inevitable occurrences when compared to odds of one in 302 million.
As the Daily Beast pointed out, dying from a vending machine accident is close to three times more likely than winning the Mega Millions. Still, the game offers more generous odds than contests that award mind-boggling sums for a perfect March Madness bracket. Depending on the year, the odds of perfection in the NCAA tournament are about one in two billion, per FiveThirtyEight. Billionaire investor Warren Buffet once offered up $1 billion for a flawless bracket. Correctly picking every game through the first four rounds is roughly equivalent to winning Mega Millions.
For those familiar with the World Series of Poker, you’d stand a much better chance at winning the main event back-to-back (about one in 61 million) than hitting the Mega Millions.
With so many people playing, the odds of Mega Millions being hit by at least one person have grown significantly in recent days. Carole Gentry, spokeswoman for Maryland Lottery and Gaming, told the Associated Press that, based on sales projections, 75 percent of the possible combinations will be chosen for Tuesday’s drawing, up from nearly 60 percent on Friday. About 280 million tickets were sold prior to Friday’s drawing, though many were duplicates. Fifteen of those missed the $1 billion jackpot by one number, each awarding the player with a seven-figure prize as consolation.
The huge volume of tickets was thanks to the staggering speed at which they are bought. In California last week, sales reportedly were roughly 200 tickets per second during the lunchtime rush.
Some states allow lottery winners to shield their identities from the public, but only if you don’t make a costly mistake.
Early this year, a woman in New Hampshire, who had signed the back of her winning $560 million Powerball ticket, sought to remain anonymous. The state lottery pushed back against her request citing “integrity of the lottery,” but in March a court ruled that “Jane Doe” could protect her identity thanks to “strong privacy interest.” Only her hometown was made public. The gambler could have put the name of a trust on the back of the winning ticket. She later said she had made a mistake putting her name on it.
In the $1.58 billion Powerball drawing from 2016, which was hit in three states, the winners gradually came forward. A couple from California waited over six months before claiming their share and making their identities public. It’s unlikely that a captivated public will know right away who won the record Mega Millions drawing, assuming it’s hit on Tuesday. The jackpot could pass the $2-billion mark for a potential drawing on Friday evening.
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