Powerball Goes to War With Sports Betting Industry
September 2, 2021
With the proliferation of sports betting throughout America, pressure is being brought to bear on other forms of retail and online gambling. That includes the Powerball lottery that has seen a slight decrease in activity over the last couple of years. The decrease is being attributed to the COVID19 pandemic and the redirection of gambling funds into the sports betting market.
Officials in charge of the Powerball Lottery have made a decision to up the ante in the battle for available gambling dollars. To do so, they have added a third day during the week in which drawings will be held. Starting on August 23, Powerball drawings will be held every Monday, Wednesday, and Saturday.
According to May Scheve Reardon, Powerball product group chair and Missouri Lottery executive director (in a press release):
“This is the first time in Powerball’s 29-year history that drawings will be offered three nights a week. Players will still have the same odds and base ticket price, just more chances to get into the game.”
Looking to Boost Jackpots
Lottery officials believe that boosting potential winnings is the best way to get more Americans to play the lottery more frequently. They believe that the best form of advertising they can get is for prospective lottery players to see opportunities to claim billion-dollar jackpots.
Throughout the history of large lotteries in the U.S., there have been three occasions in which the cumulative jackpot has exceeded $1.0 billion. The highest mark was achieved in 2016 when the winning Powerball numbers produced a jackpot of $1.58 billion.
Even with three billion dollar payouts, lotteries have yet to produce the first billionaire. The largest individual win came in 2018 when one lucky winner stepped forward to claim $877.7 million, which they won when they purchased a Mega Millions ticket sold in South Carolina.
Realistically, a jackpot would have to reach in excess of $2.0 billion in order to produce a legitimate billionaire. Why? Assuming the winner would take a discounted lump sum payment and have to pay statutory federal and state taxes, it would take that kind of jackpot to make a lottery player into an instant billionaire.
The Battle Begins
Currently, there are 48 states that allow residents to participate in the Powerball lottery. About half of those states also have legalized sports betting and in many cases, allow residents to bet on sports and play casino games via the internet. As a reminder, some U.S. states do allow residents to purchase lottery tickets over the same internet.
In addition to adding another day, Powerball is also promoting a new option called “double play”. With this new option, players can simultaneously participate in a side drawing for another $10 million. The investment in the side option is only $1 more dollar per number combination. Currently, 13 states have signed on to allow residents access to this extra jackpot.
In the future, it will be interesting to see how other lotteries react to diminishing revenue due to the proliferation of sports betting.