The Powerball ‘Tipping Point’: What Size Jackpot Excites People?

Posted: Tuesday, Sep 17,2019 | Time: 06:45 am | Edited by: The Lottery Lab Staff

Last week, when Powerball reached $750 million, you probably drove to your nearest gas station or lottery retailer store to buy a ticket. Maybe you found yourself looking at the ticket kiosk thinking “What the heck?”.  If so, you got caught up in lottery fever.  This behavior is exactly what lottery commissions strive for because ticket sales rise and people who normally don’t play the lottery start thinking that trading $2 in exchange for hundreds of millions of dollars does not seem so bad. This can be the Powerball 'tipping point'.

An Example

Let’s take a look at how the lottery commissions operate as a business.  For simplicity, let's just focus on Powerball. Every time Powerball announces a jackpot winner, the jackpot prize resets to $40 million. According to data released by MUSL, only die-hard Powerball player buy lottery tickets when the jackpot is below $100 million, which is the shortest milestone. Once the jackpot crosses $100 million, ticket sales begin to rise quickly. But the real ‘tipping point’ according to MUSL, occurs around $250 million when office workers start pooling cash and people start doing crazy things to win the big cash prize.

At this point, ticket sales blow up to over 200 million Powerball Tickets per drawing. According to a lottery retail store clerk, “there is definitely a ‘sweet-spot’ for the jackpot size when it comes to motivating players. It used to be in the $200 million range, but now players seem to really engage when a jackpot reaches $300 million or above.” With the increasing jackpot range, the lottery has become big business. According to MUSL, in 2016, Americans spent about $72.6 billion on lottery games. An average American spends about $223.04 annually.

Bonus read: Calculating the Outrageous Tax Bill for the $768 Million Powerball Jackpot

The main reason behind the enormous jackpot is the huge odds which makes it nearly impossible for an individual to win the lottery jackpot. However, when people keep reading headlines about ‘record-breaking’ jackpots, they feel compelled to try their luck! Every time, the Powerball jackpot crosses $300 million or $500 million, you can see billboards and news articles with the headline announcing the huge jackpot.  This media barrage is compelling enough to motivate people to buy a ticket and create Powerball 'tipping point'.

Conclusion

So, the question is: Will you buy a Powerball ticket? Sure, the chances are 1 in 292 million for winning the jackpot. But if you don’t buy a ticket, you don’t stand a chance of winning.  And for some people, that is even worse!

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