Powerball dropped revamp that gave better odds to win
IOWA CITY, Iowa -- The group that runs the Powerball lottery game approved, then abandoned, changes that would have given ticket buyers more bang for their two bucks than the redesign recently implemented, The Associated Press has learned.
Powerball managers changed the game's odds in October to build bigger jackpots and revive lagging player interest. Jackpots became far harder to win, but smaller cash prizes are easier to attain. The strategy quickly paid massive dividends for state lotteries, leading to soaring ticket sales for what grew to a record $1.6 billion jackpot last month.
But internal documents obtained by The AP show a different Powerball overhaul initially was planned that would have triggered larger jackpots while also providing players with more value. The group that runs Powerball, the Multi-State Lottery Association, voted for the plan in September 2014 and planned to roll it out in April 2015. But the group later shelved the concept amid concerns that it was too complicated and replaced it with the more straightforward changes in October.
Compared to the current game, the abandoned proposal would have given players better odds to win the jackpot (1 in 286 million, instead of 292 million) and $1 million prizes (1 in 9.2 million, instead of 11.7 million). Under the old system, the odds were 1 in 175 million for the big jackpot and 1 in 5.2 million for the $1 million prize. Players would have had similar odds of winning $100 and smaller prizes. And those winnings would have been multiplied by 2 to 10 times under a key change that would have embedded the "Power Play" option - which currently costs $1 extra -- into the $2 base ticket price.
For an extra dollar, players could have bought a new "Power Plus" feature in which they would enter a second drawing for a $10 million jackpot and smaller prizes. The odds of winning any prize would have been 1 in 15 for "Power Plus" players, compared to 1 in 25 for the current game.
The plan was touted for doubling a player's odds of winning prizes and adding more life-changing jackpots, according to a February 2015 report summarizing extensive polling and focus groups testing it out on players and retailers. The report, labeled "restricted confidential," was inadvertently posted on the public portion of a website for association members and downloaded by The AP.
Among three redesigns surveyed, the plan was the top preference among players, the report said. Most caught on quickly to the game, which they thought made Powerball more winnable, fun and interesting. The research concluded that the "slightly higher perceived complexity should not impact" Powerball's popularity.
But the report indicates the plan hit a snag after the failure of the highly touted Monopoly Millionaires' Club jackpot game, which was quickly abandoned by lotteries in 2014 following dismal ticket sales and confusion among players. Lottery directors worried that the Powerball changes would similarly be too complex, turning off players and damaging the lucrative brand.
Texas Lottery executive director Gary Grief, chairman of the association's Powerball group, said the concept was one of many considered to make the game more appealing, adding that finding consensus among the association's 37 member lotteries "takes significant time and effort."
Ultimately, the association voted to increase the number of white balls to 69 from 59 and cut the number of red Powerballs to 26 from 35 to make the jackpot harder to win and smaller prizes easier. (The abandoned plan called for 66 white and 32 red.) The approved changes increased the third prize level from $10,000 to $50,000, kept a modified "Power Play" for an extra $1 and scrapped the "Power Plus" idea.
Grief said the recent jackpot frenzy showed the association made the right call.
"The litmus test for any game change, regardless of the research that may be conducted in advance, lies in acceptance by the playing public," he said. "Our players speak with our dollars."
The changes have been delivering huge jackpots, which reset to start at $40 million after someone wins. After nobody won Saturday's drawing, the prize for Wednesday night is $236 million.
Meanwhile, winners of last month's $1.6 billion Powerball jackpot have begun coming forward.
Last week, David Kaltschmidt, 55, and Maureen Smith, 70, of Melbourne Beach, Florida, attended a news conference at the Florida Lottery headquarters in Tallahassee.
They represented a trust that chose to receive the winnings in a one-time, lump-sum payment of over $327 million. The payout would have been more than $528 million if the trust had chosen to collect the prize in installments.
Neither watched the nighttime drawing for the winning numbers, and Kaltschmidt said at a news conference he didn't believe it when he looked at the ticket the next day.
"I checked the ticket, and everything matched up, so I thought she was messing with me," Kaltschmidt said.
Kaltschmidt said that they didn't inform family members until last week that they won.
Kaltschmidt said he would retire from Northrop Grumman Corp., where he's worked as a manufacturing engineer for 34 years. Smith described herself as a homemaker.
The winning ticket was purchased at a Publix grocery store in Melbourne Beach. The other two winning tickets for the Jan. 13 drawing were bought in Munford, Tennessee, and Chino Hills, California.
John and Lisa Robertson of Munford cashed in their ticket last month, also taking a lump sum total of about $327 million. Munford is about 25 miles north of Memphis.