If you're tired of hearing about the record-breaking Powerball jackpot, buckle-in because it's not going anywhere.
The Powerball format changed in October 2015, and its new rules are precisely why we're in $1.5 billion territory right now.
Under the previous system, players had to choose five numbers between 1 and 59, and one "Powerball" number between 1 and 35. The odds of winning were 1 in 175 million.
However, with the new format, the first pool of numbers jumped to 69 and the second "Powerball" numbers decreased to 26. Now the odds of taking home a jackpot are 1 in 292 million.
FiveThirtyEight's Walt Hickey wrote about the proposed rule change back in July 2015, and his predictions of an increase in Powerball jackpot totals was spot on. The reason why the rules meant an increased likelihood of billion-dollar cash prizes is simple: The longer a single Powerball goes without a winner, the higher the jackpot total rises. Lotteries are directly tied to ticket sales, so the more tickets are sold, the more money someone has a tiny chance of winning.
Matt Bailey, associate professor at the Bucknell University School of Management, said in a Tuesday press release: "Under the new odds, you are roughly 1.7 times less likely to win than under the old system. This was manufactured to create large jackpots and more ticket sales even though this is actually worse for the players."
If you're reading this, and currently in possession of a lottery ticket you wouldn't have normally purchased, you are precisely the type of person the Powerball system was hoping to engage. According to Bailey, "The craze we’re seeing is a quirk of our flawed psychology of decision-making. The lottery’s recent change in the odds was done to exploit this. It’s very clever."
Regardless of whether the odds are in your favor, you may be daydreaming about what you could do with your winnings. Just make sure you know exactly how much you'll actually receive, and the best way to handle your winnings.
