The Powerball jackpot for Saturday's drawing — $200 million — has once again grown large enough to draw new or infrequent players to ticket counters.
The most popular lottery games are normally the $1 and $5 games that offer chances at prizes ranging from a few bucks to $1 million. Those are the heavy hitters for most state lotteries, generating as much as half of total sales.
The customers start to change, though, when the multi-state Powerball game starts touting jackpots approaching $200 million. A review of sales data for 2007 shows that Powerball sells better in places where people make more money.
Consider the top 10 ZIP codes in North Carolina for Powerball sales, found in urban areas in Greensboro, Charlotte, Wilmington and Raleigh. The median incomes ranged from $26,655 to $53,517.
Then consider the top 10 ZIP codes for scratch-off games, found in Rocky Mount, Lumberton, Reidsville and Morganton. The median incomes ranged from $26,655 to $40,546.
Such figures are, at best, a rough measure of who plays the lottery. Analyzing ZIP codes only shows where tickets are bought, not necessarily who's buying them. The method also doesn't necessarily account for how many stores sell lottery tickets in a given ZIP code or how many interstates or major thoroughfares run through a ZIP code. And the census data on median income is nearly 10 years old.
But the idea that big jackpot games such as Powerball sell among people who are already financially comfortable is generally true of lotteries, said Philip Cook, a Duke University professor who has studied the lottery industry.
One theory as to why, Cook said, is that it takes a lot more money to get someone who already makes a decent living to dream about instant riches.
"The game has, of course, a jackpot that is big enough to inspire excitement among people who are already comfortable," Cook said. "That's something that the instant games don't do."
Lottery players have a magic number — how much would it take to retire, Cook said.
For Mike Anthony, 31, a pharmaceutical salesman, that number was right around Wednesday's jackpot of $173 million. Anthony rarely buys lottery tickets of any kind, but he stopped by the Fiddle Stix Citgo on U.S. 64 near Interstate 540 Tuesday to buy $10 worth of Powerball tickets.
"The pot gets high enough, it's worth a shot," Anthony said.
The odds of winning the big jackpot are one in 146 million. The odds for winning top prizes in instant games are generally better, but still stacked heavily against the player.
After Anthony left, the next customers to buy tickets at the store — both are meter readers by profession — bought scratch-off tickets and said they don't play Powerball much.
But it's hard to typecast a lottery player at a store such as the Fiddle Stix, which sits on major roads and highways, and is on the way home for a lot of people.
"It's not just one type of person," said Ann Lomison, the store's manager. Usually the only absolute is that players wait until the day of the drawing to buy tickets.
The lottery doesn't study the people who play its games, said Tom Shaheen, the lottery's director. He said the lottery hasn't picked up on major trends in players, other than they are almost always employed.
In Charlotte, Dipak Desai manages the Ballantyne Amoco. When the Powerball jackpot reaches six figures, he said, the lottery clientele changes.
In August, the last time the jackpot spiked, Desai's store had the 11th highest sales in the state — $32,794.
His regular lottery players are working-class customers, clerks and delivery crews and people with tool belts. When there's a big jackpot, he said, the suits come in to play.
"When the jackpot gets bigger," Desai said, "everybody becomes a player."
I hate to admit it... but I do get very angry when joe schmoe comes in and buys one ticket (because the jackpot is "high enough now") and wins after I have been playing for years on a regular basis.
I know, I know.... that's called gambling.
"Lottery players have a magic number — how much would it take to retire, Cook said.
For Mike Anthony, 31, a pharmaceutical salesman, that number was right around Wednesday's jackpot of $173 million."
Yeah, it would be so very difficult to retire on the after-tax cash from a jackpot of only $50 million.
Right on, KY Floyd! It boggles my mind why even $10 Million wouldn't be enough to satisfy anybody.
Sure $200 Million is incredible, but the logic of why it doesn't make sense to wager at lower levels escapes me. I'd be happy with any jackpot.
In the case of Powerball it's a minimum of $15 Million. Yeah, I could be OK with that.
I know. I don't understand how people feel they can't retire on jackpots unless they are higher then $150 million.
ITS a funny thing here on City Island in the Bronx..when Powerball has a higher jackpot the I95 northbound to CT and New England is bumper tp bumper on the day of the drawning..
Really? I don't think I'd say that. I live in Westchester and am on 287 and I-95 all the time, there's traffic, but I don't credit it to Powerball. I don't think you see the long lines you once saw 7 or 8 years ago either. Like everyone's been saying, some people won't even play unless it hits 200 million, but to be honest, I think it would take a 400+ million dollar jackpot to see lines out doors.
Wow 200 Million! A person can fullfill their dreams and then some. glta
I have a question...I'm from NY, but lets say I go to CT to buy tickets and win, do I pay CT lottery taxes, or NY?
In general, any taxable income is taxed in the state in which the income was generated. If you earn or win money in Connecticut, CT has the right to collect income tax on it, and they will (assuming they know about it). Your state of residence also has the right to tax your incoem, regardless of where it comes from. The good news is that the tax you pay to another state will be credited against the taxes you pay to other states. The bad news is that with a jackpot win your tax rate in NY would be higher than the rate in CT. That means the net effect is that you'd pay the same amount as if you only paid NY taxes, though some of the money would go to CT instead of NY. If you lived in the city, you'd also pay the NYC tax. As always, if you were to find yourself in a position where the answer really mattered it would be a good idea to consult with a tax professional
The logic behind only playing for higher jackpots is really simple. The odds are exactly the same for a $15 million jackpot as they are for a $50 million, $100 million, or $500 million (if it ever gets that high) jackpot. If you aren't going to play regularly the sensible strategy would be to make your occasional plays when the jackpot is high. Even for a regular player, the sensible choice would be to concentrate your plays on higher jackpots. If you're going to spend $100 on 100 chances at a jackpot, would you rather spend it on 100 chances at $15 to $25 million, or 100 chances at $50 to $100 million?
Regardless of the jackpot size, you CANNOT WIN if you don't play. Would you be unhappy if you only won $15 Million?
And while the odds are the same regardkless of the jackpot, there are more tickets wagered at the higher jackpots thus diminishing your chances of holding the winning ticket.
I know I wouldn't be unhappy to win $15 million. I'd would take winning that amount in a heartbeat.
In general a wiser gambler pays close attention to the "expectation value" which is the ratio of potential reward to odds and risk.
Powerball only approaches casino odds when it reaches $200 million. (Right now the Powerball expectation value, adjusting for the probability of multiple winners) is about 0.86.
I usually buy a ticket when it's small, for the hell of it, but I play more when the jackpots are larger.
On a few occassions both Powerball and Megamillion have exceeded expectation values of 1, but only on the largest historical jackpots.
KY Floyd: If you aren't going to play regularly the sensible strategy would be to make your occasional plays when the jackpot is high. Even for a regular player, the sensible choice would be to concentrate your plays on higher jackpots.
I just did a thought-provoking calculation. It's based on the Pick 3, but applies to any lottery.
Your chance of winning is better if you buy 10 tickets for a single drawing than if you spend the same money buying a single ticket for each of 10 drawings. So, in terms of maximizing your money's potential, it makes more economic sense to save your money until the jackpot reaches a desired expectation value and spend it all at once.
lmatlaw: there are more tickets wagered at the higher jackpots thus diminishing your chances of holding the winning ticket.
As I think lmatlaw is saying here: this does not, however, take into account the possibility you might have to share the jackpot with someone else. As more tickets are bought, the odds of this increase. I don't know how to take this factor into account. Does anyone?
I won't play anything but blackjack or poker in a casino. I like to say I'm not a gambler. But maybe I am, just a little. Despite this analysis, I just can't imagine there being any chance to win millions and staying out of it. Just that itty-bitty chance adds so much spice to life.
Will go to at least $350 million until I hit it. I will not play again until the second prize goes up to like $2 million or whatever it is. What level does it need to get in order for that to happen? What is the record? Thought like $300 million something.
My rule for Powerball is I only play myself when it hits $100 million. My only reason for that rule is I don't want to spend too much on the lottery. The lottery pool I run at work plays every week, so I also participate through that.
I hope you meant to say that your chances of having the only winning ticket are diminshed. That's true, but even for jackpots at or near record levels the chance of multiple winners is fairly low. For jackpots in the 50 to 150 million range the chance is much less than the chance of a single winner. Even for the recent $275 million MM jackpot there was only 1 winning ticket despite all of the numbers being birthday numbers. Even if there had been 4 winners (I think the record for MM or PB is 3) that would have been almost $69 million each. Last time I checked, that's nearly 3 times as much as what you'd get as the only winner of a $25 million jackpot.
The only thing illogical about spending your entire ticket budget on jackpots of $100 million or more is that the most likely outcome will always be that you lose more than you win.
I don't think that is a bad idea. Sometimes I play when the jackpot is low and sometimes I play when it's high. It really depends on my budget for the week/month.
Thank you. Since I already participate in a pool, which costs me $4 every 2 weeks/payday, I don't think it's worth it to spend more to play myself. I don't want to go overboard with it. Sometimes, I might buy a Powerball on a whim even if it's below $100 million. Sometimes I just feel lucky so I buy one, but I haven't been yet.
Todd:
What is the rule on roll-over for PowerBall? Something to do with a pervious maximum, then it only goes up a small percentage?
The best place to go for information about Powerball — including that question — is USA Mega.
That question is answered on the Powerball FAQ page there. You'll see it if you scroll to the bottom. (Plus check out the other info!)
While continuing to be educated ... when will that magic maximum number be reached?
Just win it Mylollipop, just win it!
In some ways I would rather the $15 million than $100 million or more. Then you won't see me on world news today. $15 million after a record jackpot win would be even better.
What makes me "angry" is that it is idiots like this who have no concept of the true value of money who win. I could retire on $1 million easily, especially in my current area.
I could retire on less than $150 million easily.
I agree, on could retire on a million if they aren't going to try to live like millionaires.
A million after taxes put into a standard Money Market account bringing in a measley 5% per year would still give you a yearly income of around $50,000.00 before taxe... I'd say that's enough as long as you don't live anywhere with a high standard of living. Personally I would have to put it in to the stock market where it would not only earn atleast 8% per yea, but you would also be bringing in dividends (rolled over or not)... $1million sounds real good...