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Powerball sales skid hurts lottery profits

PowerballPowerball: Powerball sales skid hurts lottery profits

Major changes in the game in August should lure players who want bigger jackpots.

Powerball players got lucky during the past 12 months, winning lots of smaller multistate jackpots but dampening overall enthusiasm by reducing the number of huge payoffs in the $200 million to $300 million range.

"The players are just beating the game," Iowa Lottery President Edward Stanek said Monday. "We had 11 Powerball jackpot winners the year before, and we have had more than a 50 percent increase for the fiscal year just ended."

Powerball sales in Iowa declined by 17 percent for the state budget year that ended June 30, contributing to an 8 percent overall drop in Iowa Lottery profits. Sales for all types of Iowa Lottery games rose by 1 percent to a record $211 million for the past 12 months, but the other games had lower profit margins, Stanek told the Iowa Lottery Board.

Iowa Lottery profits are deposited into the state's general fund, where they pay for a variety of programs. Some programs that receive money include education, natural resources, health and family services, and public safety. Overall state revenues have increased, so no state programs are being cut because of the drop in lottery profits.

Sales of instant-scratch tickets, the lottery's longtime sales leader, led again in the recent budget year with sales of $103.3 million. Hot Lotto had the biggest increase among traditional lottery products, up nearly 23 percent to more than $2 million.

Powerball is played in 27 states, plus the District of Columbia and U.S. Virgin Islands. As more states have added Powerball, more people have begun buying tickets, which increases the chances someone will win a jackpot. However, none of the jackpot winners during the past 12 months has been an Iowa resident.

One of the problems with many Powerball winners is that the average size of winning jackpots becomes smaller. That makes the game less attractive to many players. There was one winner in the $200 million to $300 million range in the past 12 months.

Randy Inman of Altoona, a heavy equipment operator who occasionally plays Powerball, said he would buy Powerball tickets more often if there was a more frequent opportunity for super-sized jackpots worth $200 million to $300 million.

"Oh, yeah, I am sure I would be playing for that if I could win that much for a buck," he said.

Major changes are coming for Powerball next month that are intended to lure more players who want bigger jackpots.

"The overall odds will be going from about 1 in 122 million to 1 in 146 million," Stanek said. "The goal is to have the average jackpot somewhere above $90 million when won, and to achieve jackpots in the range of $200 million to $300 million more often."

Reducing the chances of winning the jackpots, however, risks the potential of alienating some other lottery players.

John Tolson, a sanitation worker for the city of Des Moines, said he spends about $2 on Powerball tickets for each of the twice-weekly drawings. He said he doesn't play more often because his chances of winning aren't good.

"I wish the odds were a bit better, and I wish somebody from here in town would win sometimes," Tolson said.

Starting Aug. 28, the guaranteed starting jackpot will increase from $10 million to $15 million. Another change will double the prize to $200,000 for players who match the first five numbers.

Two white balls will be added to the first pool of numbers in Powerball drawings, meaning players will choose five from 55. The Powerball pool will remain at 42.

Another factor that cut into lottery profits was a $2 million expense of equipping 350 Casey's General Stores to sell lottery products for the first time in a decade, Stanek said.

"All of that cost fell into one fiscal year, but the long-term benefits to the state will more than offset that," he said.

Strategic planning continues for newer Iowa Lottery games, Stanek said.

The latest product, an electronic game card known as "Quarter Play," sold strongly in a market test that began in October. Statewide sales began in May.

Some Iowans said the state doesn't need any more lottery games.

"Gambling upsets me a lot," said Bob McConnell, a postal worker from Altoona. "I think the Iowa Lottery is stealing from poor people ... even though they say they are giving it back to the community."

Des Moines Register

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36 comments. Last comment 11 years ago by CASH Only.
Page 1 of 3

United States
Member #16612
June 2, 2005
3493 Posts
Offline
Posted: July 26, 2005, 8:06 pm - IP Logged

I hope sales in PB increase because I'm happy that there are 55 white balls to choose from instead of 53. However, I'm disappointed that the number of red powerballs are still at 42 when I had demanded 45.

    Avatar
    New Member
    CT
    United States
    Member #17320
    June 16, 2005
    5 Posts
    Offline
    Posted: July 26, 2005, 8:09 pm - IP Logged

    I don't understand how the players supposedly "beat the game" when the state takes half the winnings everytime...

      Avatar
      New Mexico
      United States
      Member #12305
      March 10, 2005
      2984 Posts
      Offline
      Posted: July 26, 2005, 8:10 pm - IP Logged

      I hope sales in PB increase because I'm happy that there are 55 white balls to choose from instead of 53. However, I'm disappointed that the number of red powerballs are still at 42 when I had demanded 45.

      Maybe they didn't realize it was a demand you made.  Maybe they mistook it for a request.

      Try putting it all in caps next time.

      Jack

        Avatar
        Englewood, Colorado
        United States
        Member #19108
        July 25, 2005
        51 Posts
        Offline
        Posted: July 26, 2005, 8:29 pm - IP Logged

        I've only been a member for a few days, but I have never seen such inane comments as those being stated about the new Powerball format. I can't actually believe people would get worked up over the fact that Powerball jackpots are seldom reaching the astronomical $200 million to $300 million dollar range, although there was a recent $220 million winner in Idaho.

        Would you really be upset if you only won, let's say, $150 million? Give me a break! But even more astonishing is the ranting of the guy who supposedly demanded 45 red balls instead of the current 42. I guess he's not happy that the odds are an astronomical 140 million to one. He must think he'd have a better shot with higher odds. Let's face it, there's only a couple of hundred people in the world who will ever win a jackpot anyway.

        Get a life!! 

         

          Avatar

          United States
          Member #119
          February 19, 2002
          527 Posts
          Offline
          Posted: July 26, 2005, 8:41 pm - IP Logged

          Once again the PB powers that be are sticking it to us by increasing the already near impossible odds all under the guise of increasing jackpots because some people are not happy with winning thirty to seventy million dollars.  Come on people--  give me a break!  $30,000,000 isn't enough when you make $35,000 - $90,000 a year????

          I think I'm gonna "retire" from Powerball and play games with much better odds. You can have the PB and the MM game.  I'm not gonna participate in somebody's delusion that it's a winnable game.  Oh sure,  there ARE winners, but don't confuse the fact of winners with using strategies to beat the odds of this game.

          If I were King of the World I'd change the PB and MM games to a twice weekly $25,000,000 Cash Jackpot EXEMPT from ALL taxes and limit the number pool to 5/45 and 1/25.  That would be MUCH more fun.

          Anybody for 5/39?

          :-)

            Avatar
            New Mexico
            United States
            Member #12305
            March 10, 2005
            2984 Posts
            Offline
            Posted: July 26, 2005, 8:44 pm - IP Logged

            I've only been a member for a few days, but I have never seen such inane comments as those being stated about the new Powerball format. I can't actually believe people would get worked up over the fact that Powerball jackpots are seldom reaching the astronomical $200 million to $300 million dollar range, although there was a recent $220 million winner in Idaho.

            Would you really be upset if you only won, let's say, $150 million? Give me a break! But even more astonishing is the ranting of the guy who supposedly demanded 45 red balls instead of the current 42. I guess he's not happy that the odds are an astronomical 140 million to one. He must think he'd have a better shot with higher odds. Let's face it, there's only a couple of hundred people in the world who will ever win a jackpot anyway.

            Get a life!! 

             

             

            Lessee.  You took the time and trouble to read  these posts, to digest them, to feel superior, and then to tell the people who posted to get a life?  You have an extra one you'd care to sell, or are you just trying to find one and don't know where to look?

            I agree.  We all make a lot of inane comments.  Including the particularly inane one you posted a little while ago.  I even agree that the comment about 'demanding' this and that, and not having the demand satisfied struck me as absurd.  But so did yours.  So do a lot of my own, occasionally.

            I'm not going to suggest you get a life.  Sounds as though the one you have is about all you can handle.

            Jack

             

             

              Avatar
              New Mexico
              United States
              Member #12305
              March 10, 2005
              2984 Posts
              Offline
              Posted: July 26, 2005, 8:47 pm - IP Logged

              Once again the PB powers that be are sticking it to us by increasing the already near impossible odds all under the guise of increasing jackpots because some people are not happy with winning thirty to seventy million dollars.  Come on people--  give me a break!  $30,000,000 isn't enough when you make $35,000 - $90,000 a year????

              I think I'm gonna "retire" from Powerball and play games with much better odds. You can have the PB and the MM game.  I'm not gonna participate in somebody's delusion that it's a winnable game.  Oh sure,  there ARE winners, but don't confuse the fact of winners with using strategies to beat the odds of this game.

              If I were King of the World I'd change the PB and MM games to a twice weekly $25,000,000 Cash Jackpot EXEMPT from ALL taxes and limit the number pool to 5/45 and 1/25.  That would be MUCH more fun.

              Anybody for 5/39?

              :-)

              I hope you get to be king of the world.  I think the last idea's a middling good one.  It's a bit difficult to dovetail it with the first part of the post, but making sense all the way through three paragraphs isn't something anyone's come to expect in most forums.

              Jack

                Avatar

                United States
                Member #1826
                July 11, 2003
                2645 Posts
                Offline
                Posted: July 26, 2005, 9:47 pm - IP Logged

                Once again the PB powers that be are sticking it to us by increasing the already near impossible odds all under the guise of increasing jackpots because some people are not happy with winning thirty to seventy million dollars.  Come on people--  give me a break!  $30,000,000 isn't enough when you make $35,000 - $90,000 a year????

                I think I'm gonna "retire" from Powerball and play games with much better odds. You can have the PB and the MM game.  I'm not gonna participate in somebody's delusion that it's a winnable game.  Oh sure,  there ARE winners, but don't confuse the fact of winners with using strategies to beat the odds of this game.

                If I were King of the World I'd change the PB and MM games to a twice weekly $25,000,000 Cash Jackpot EXEMPT from ALL taxes and limit the number pool to 5/45 and 1/25.  That would be MUCH more fun.

                Anybody for 5/39?

                :-)

                Impossible odds to impossible payouts? The lottery would have to have a payout around 80% for that kind of prize, and the jackpot would be the only prize. I take it you have no idea how lottery payouts work, or at least need to find yourself a odds calculator. Otherwise the king of the world might find himself bankrupt from being too generous with prizes.

                (insert signature here)

                  Bradly_60's avatar - disney37
                  Atlantic Mine, Michigan
                  United States
                  Member #416
                  June 23, 2002
                  1614 Posts
                  Offline
                  Posted: July 26, 2005, 11:12 pm - IP Logged

                  I know that longer odds seem bad to the players.  But put your feet in their shoes.  When jackpots range from 10-50 million they sell about an average of $10 million in tickets (this is all lotteries totaled)  If the jackpot is won in this range sales become lack luster.  Now we know if we raise the odds longer jackpot runs will become more common.  When jackpots get to the $150-$200 million dollar range lotteries sell around $40-$50 million in tickets.  Now if it was your job to maximize profits to support education, elders, or whatever your lottery supports what would you do?  Would you want smaller jackpots when only normal players buy tickets (We all could live off of these jackpots I will agree) or would you want large jackpots as seen before in the $200-$300 million range where the whole nation seems to be buying tickets. 

                  Brad

                    Todd's avatar - Cylon 2.gif
                    Chief Bottle Washer
                    New Jersey
                    United States
                    Member #1
                    May 31, 2000
                    23261 Posts
                    Offline
                    Posted: July 26, 2005, 11:20 pm - IP Logged

                    I trust Chuck Strutt, who is one of the most capable lottery executives in the business.  You go, Chuck.  Thumbs Up

                     

                    Check the State Lottery Report Card
                    What grade did your lottery earn?

                     

                    Sign the Petition for True Lottery Drawings
                    Help eliminate computerized drawings!

                      dvdiva's avatar - 8ball

                      United States
                      Member #2338
                      September 17, 2003
                      2063 Posts
                      Offline
                      Posted: July 26, 2005, 11:33 pm - IP Logged

                      The same people complaining about the matrix change are the same people not buying tickets when the jackpot is low. It's not a wonder that Powerball's sales are in a slump. On a federal level I would like to see state lottery winnings being tax free like in Europe so state games would have an edge over online or indian casinos but I doubt anyone at the federal level has the intellegence to pass something like that.

                        Drywall1's avatar - dogfood
                        New Member
                        San Marcos, CA
                        United States
                        Member #19173
                        July 26, 2005
                        5 Posts
                        Offline
                        Posted: July 26, 2005, 11:56 pm - IP Logged

                        I'm new to this, but the bigger jackpots got my attention.  I prefer no jackpot winners and the impossible odds so I can sleep at night knowing it more than likely rolled over if I didn't win the big one.

                        Now all we need is a merger with MM taking over PB for a super duper mega power billion $ jackpot at odds at least equal to the national population.  Now that would be a lottery.

                        BArry, still playing California'd SL and now MM!

                        Thumbs Up Have fun with these impossible games!

                          Avatar
                          New Mexico
                          United States
                          Member #12305
                          March 10, 2005
                          2984 Posts
                          Offline
                          Posted: July 27, 2005, 12:10 am - IP Logged

                          I know that longer odds seem bad to the players.  But put your feet in their shoes.  When jackpots range from 10-50 million they sell about an average of $10 million in tickets (this is all lotteries totaled)  If the jackpot is won in this range sales become lack luster.  Now we know if we raise the odds longer jackpot runs will become more common.  When jackpots get to the $150-$200 million dollar range lotteries sell around $40-$50 million in tickets.  Now if it was your job to maximize profits to support education, elders, or whatever your lottery supports what would you do?  Would you want smaller jackpots when only normal players buy tickets (We all could live off of these jackpots I will agree) or would you want large jackpots as seen before in the $200-$300 million range where the whole nation seems to be buying tickets. 

                          Brad

                          Nice post, well thought out comment.

                          Any thoughts on the CT discussions about withdrawal?

                          Any thoughts about whether the PB participating States ought to be consulted about changes in the game (and approve them) as part of the process before decisions are made to make the changes?

                          I'd be interested in seeing your views.

                          Jack

                            Avatar
                            Louisville, KY
                            United States
                            Member #15734
                            May 20, 2005
                            203 Posts
                            Offline
                            Posted: July 27, 2005, 3:54 am - IP Logged

                            Here's my thoughts:

                            1. If CT decides to drop Powerball, it would be a blow to the MUSL, because, IMHO,  they are already suffering due to the popularity of MM. Implementing a matrix change now for no other reason than higher jackpots (and a higher 1st prize, also like MM) just looks like copying, and CT should drop it. This is the only reason MUSL is citing for a change, and if CT doesn't like it, sever the ties and drop out. Of course, get voter approval first, or they'll likely piss a lot of people off!

                            2. All participating jurisdictions have already agreed to have the game run by the MUSL, so why not let the MUSL decide on how to run it? Because it creates control issues. PB should be like MM and have every lottery agree on any change to the game and NOT be run by one entity, rather all the work should be shared. This would alleviate some of the recent fiascos about "certifications" that ticket sales have stopped, thereby delaying the drawing - MM has never had this problem in nine years, PB has had it twice to my recollection in less than 5 months.

                            I just think MM is better than PB, with 2 exceptions:

                            1- The "Halogen" drawing machines that PB has are beautiful (See them at www.smartplay.com)

                            2- ALL OF MM NEEDS A MEGAPLIER, NOT JUST TEXAS!!!!

                            Of course, I've never hit above $150 on MM, but I still like playing it.