Why do lottery jackpots keep getting so big?
MINNEAPOLIS — Lottery fever is spreading. After no big winner last night, the Powerball jackpot now tops $1.2 billion.
Eight out of 10 of the largest lottery prizes have occurred just since 2021. So why are jackpots getting so big? Good Question.
Luck is in the air at Winner Gas in Roseville.
When asked what she would do with a billion dollars, Jacques Wilson said, "Try to take my business up a little further than what it is and help out my family as much as I could."
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Kimberly Palmer is a personal finance expert with NerdWallet.
"There have been some rule changes in how the big lotteries are run," she said.
In 2015, Powerball increased its pool of white balls from 59 to 69, while its pool of red balls shrunk from 35 to 26.
This dropped the chance of winning the jackpot from 1 in 175 million to 1 in 292 million.
"I had no idea that they change any rules," said Louis Johnson of New Brighton.
Mega Millions made a similar change in 2017. Players used to pick numbers between 1 and 75 and a Mega number between 1 and 15. Now they pick between 1 and 70 and 1 and 25.
This shrunk the jackpot odds from 1 in 259 million to 1 in 302 million.
"They made it harder to win, and when it is harder to win, that means the pool just continues to grow," Palmer said.
Ticket prices then went up from $1 to $2.
Interest rates also factor into the advertised jackpot amount, which is based on annuities.
"Because we've seen interest rates rising, it means those payments will be higher," Palmer said. "And so that's been a factor, you're basically earning more interest on your payout."
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Then there's psychology.
"There's just more excitement around lotteries and the chance of winning when the prize is so big," Palmer said.
Besides the winner, states also benefit from lottery revenue. In Minnesota, 60% goes to the general fund for things like transportation and education. The other 40% funds the environment and natural resources programs.
