Powerball gamble pays off big — for lottery
By Jason Cato
Published: Wednesday, Nov. 28, 2012, 12:01 a.m.
Throngs of people coast to coast clamoring for a chance to win half a billion dollars pushed Wednesday's Powerball jackpot closer to a U.S. lottery record.
It's exactly what national lottery officials envisioned when they doubled ticket prices in January.
“This was the plan,” said Clyde Barrow, director of the University of Massachusetts-Dartmouth's Center for Policy Analysis and a lottery expert. “You kind of think of this as an upside-down pyramid when it comes to the number of people who play. The higher the jackpot, the more people play and office pools kick in.”
Mission accomplished, judging by the fervor with which players in Pennsylvania and all but eight states snapped up tickets for the drawing, estimated at more than $500 million — the second largest in U.S. lottery history.
Pennsylvanians spent more than $64 million on Powerball tickets through noon Tuesday for this pot, which started growing on Oct. 6, lottery spokesman Gary Miller said. At midday, sales were about $6,700 per minute, he said.
“Longer Powerball jackpot runs mean larger jackpots, which translates into higher sales,” he said.
And that translates into longer lines and hopefully more business for retailers.
“Saturday was big, ($425 million) but now I think we will get more customers because of a bigger jackpot,” said Bilal Ahmad, 23, manager of Cash and Carry convenience store in Plum. “It's close to Mega Millions.”
Only the Mega Millions' $656 million prize in May was bigger.
“Because it's been increasing, sales have been booming,” said Jessica Lacava, 21, a clerk at the Daily Grind locations in Penn Hills and Plum. “It's been out of the roof, really.”
Barrow said that if no one wins the jackpot on Wednesday, “It will go up to $600 million easily.”
Until this week, Mega Millions held the top three record jackpots in U.S. lottery history.
Powerball officials on Jan. 15 doubled the cost per ticket to $2 and the initial jackpots to $40 million.
They also improved the odds from 1 in 192 million to 1 in 175 million, according to the Multi-State Lottery Association, the Iowa-based group that manages Powerball for 42 states. To win, a player must match numbers of five balls drawn at random and a single “Power” ball drawn from a second set of numbers.
Officials designed the Powerball changes to increase the number of secondary million-dollar winners and bolster average jackpots to $255 million from $141 million. The association reported a 27 percent increase in ticket sales since the price hike.
“Regular players want smaller jackpots, but people pay with their pocketbooks,” said Terry Rich, director of the Iowa Lottery and a spokesman for the Multi-State Lottery Association. “The casual player and office pools come into play with higher jackpots. It does ramp up.”
In Pennsylvania, Powerball sales are up 28 percent to $109.7 million in the first four months of the fiscal year that started July 1, compared to the same four months last year, Miller said.
Lottery proceeds in Pennsylvania pay for services for older state residents.
“Considering about 30 cents of each dollar spent on lottery is dedicated to programs benefiting older Pennsylvanians,” Miller said, “this Powerball run has already generated more than $19.2 million for the lottery fund.”
Pennsylvania raised a record $3.2 billion last year in lottery sales, which produced $960 million for senior programs, according to state figures.
State officials expect the number of Pennsylvanians older than 60 to increase from about 18 percent of the state's population of 12.7 million today to nearly a quarter by 2030, said State Department spokeswoman Elizabeth Brassell.
“Lottery revenue must grow to support increased demand for senior programs,” she said.
In addition to looking for ways to draw more money from games such as Powerball, Pennsylvania lottery officials are looking at adding Keno games and perhaps turning over operations to a private management company.
The next wave of lottery sales likely will involve the Internet, said Bill Thompson, a gambling expert and professor emeritus at the University of Nevada Las Vegas.
Illinois in May became the first state to offer such sales. Thompson predicted four or five other states could do the same within a year.
“And that's when it will hit the tipping point, and we will see it in every state,” Thompson said. “Anything to boost sales, and the Internet certainly will do that.”
Jason Cato is a staff writer for Trib Total Media. He can be reached at 412-320-7936 or email@example.com.
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