The Billion Dollar Prize – a Carny’s Dream

The Powerball jackpot has passed out of our atmosphere into the stratosphere – the realm of billion dollar prizes. “Step right up Ladies and Gentlemen! Get your Powerball ticket here! Win a billion dollars! A ticket is your pass to unbelievable wealth, the answer to your troubles and the fulfillment of all of your dreams. A mere two dollars buys you a chance for happiness and a heavenly life. Get your tickets before it is too late – a billion dollars is waiting for you!” No carnival barker ever had anything more exciting to tout, but as good as that prize is, it will not be enough forever. Every carny knew that he needed one of two things to continue to attract crowds to his show; he needed a new audience for every show or a bigger prize, or both.

The Billion-Dollar Powerball jackpot started in November at $40 million. Every week there are two Powerball drawings, one on Wednesday and one on Saturday. Each time there is no winner, the jackpot increases. On New Years’ Eve it had reached $330 million. That is an important number, the point at which sales began to accelerate noticeably. A week later the jackpot hit $500 million driving sales even more and attracting the attention of the national media. Each time the jackpot amount was raised, it elevated the sales and the media attention. It went from $500 to $675 to $700 to $800 to $900 to $1 billion. It is over a billion dollars and growing, the largest jackpot in the history of gambling. Hourly ticket sales surpass weekly volumes in normal times. It is more than a feeding frenzy, it is a mania.

$334 MILLION: Powerball jackpot rolls into the new year; December 31, 2015
$400 MILLION: Powerball jackpot surges on rollover; 1-3-16
$450 MILLION: Powerball sales bonanza sparks early jackpot increase; 1-5-16
$500 MILLION: Powerball jackpot explodes in ticket-buying frenzy; 1-6-16
$675 MILLION: All-Time Lottery Jackpot Record; 1-7-16
$700 MILLION: Powerball jackpot raised just hours after initial estimate; 1-7-16
$800 MILLION: Powerball jackpot approaches billion-dollar range; 1-8-16
$900 MILLION: Powerball jackpot to create unimaginable wealth; 1-9-16
$1 BILLION: Powerball Creates World’s First Billion-Dollar Jackpot; 1-10-16
$1.5 BILLION: Powerball record jackpot still rising; 1-12-16

Powerball and Mega Millions were designed to feed on the excitement generated by really big jackpots and it has worked. But their success is also their challenge. Each time the jackpot reaches record territory, it raises the dollar amount which triggers the national mania. The real intensity associated with this jackpot did not begin in earnest until it hit $500 million; five years ago $200 million produced the same affect. As the carnival barker knew, it takes a bigger and bigger prize each time. That is not always possible; it has been nearly three years since a jackpot went over $500 million. As exciting as this jackpot is, it is also a warning of things to come. For the last two years lottery directors – and governors – have blamed the lack of giant Powerball jackpot for their lackluster revenues. Lotteries have come to depend on those jackpots to drive sales, without a major jackpot lottery sales languish in every state.

The other element that can keep the level of excitement high is a new audience. Carnivals simply picked up and moved to a new town when the show lost its excitement. A national lottery network has no place to move to. If it has done nothing else, the billion dollar jackpot has united the country around a single purpose – buying a Powerball ticket. There are very few people any place in the country who do not have a ticket. The people who do not live in one of the 44 states where Powerball is legal, drive across the state line into a neighboring state to buy tickets. People who live in Hawaii or Alaska and can’t drive to buy a ticket, send money with someone who is going to a Powerball state, or buy tickets through a friend or relative who has access to Powerball.

This jackpot is likely a tipping point for the multi-state lotteries. Neither Powerball nor Mega Millions will disappear any time soon. But they will lose their ability to generate the level of excitement this first billion dollar jackpot did. To the casino industry it is a well-know phenomenon. We saw the same thing happen with progressive slot machines. When progressives were first introduced, a $10,000 jackpot was exciting, but the excitement did not last. To restart the excitement, IGT introduced Megabucks and the linked progressives. With those linked systems jackpots grew into the millions of dollars – the biggest one was $39 million hit in 2003.

In the beginning Megabucks generated the same kind of excitement and intense activity that Powerball is experiencing. People who never went to a casino pooled their money with fellow employees, neighbors or family. One person would go to a casino and play for the group. People in Oregon, Washington and California did the same thing. What happened one might ask? Lotteries happened; for years lottery directors have been searching for new and attractive options and just like slot manufacturers hit on the progressive jackpot as the answer. The lottery jackpots stole the thunder of the slot progressives because they were much larger. However, those jackpots experienced the same lifecycle as slot progressives. In time, they simply didn’t do the job. Then, just as IGT had done by linking slot machines in different casinos all around Nevada, lotteries began to link together to create the ultimate solution – a jackpot bigger than all jackpots ever known. At least it was the ultimate jackpot and the solution until it reached its mathematical and population limitations.

So what does a lottery director do when he can’t grow the jackpot even bigger and there is no new audience? Maybe they could pray that some outlier event will come along, hell the odds cannot be any worse than the one-292-million of any single Powerball ticket hitting the big one. But we all know it will hit, don’t we? Not wishing to be left out, I joined a group of five in the purchase of $100 in Powerball tickets. So, while the rest of the country morns its loss, I am planning on moving to a Pacific island and painting the native girls with my one/fifth share of the billion and half dollars.


1 Response to “The Billion Dollar Prize – a Carny’s Dream”

  1. 1 ennyl ekrub January 13, 2016 at 2:19 pm

    I hope you win.

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