Powerball used to have a jackpot limit. Then it exploded


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The Powerball jackpot is expected to reach $1.9 billion for Monday’s drawing, making it the largest lottery prize ever.

But in 1987, when Lotto America, Powerball’s predecessor, was introduced, organizers banned jackpots worth more than $80 million.

“There were concerns about what you could do with that money — like buy a small country or something,” Ed Stanek, director of Lotto America, said at the time.

The lottery craze took off in the 1980s as more states introduced lotteries to raise revenue for education and welfare programs, but some smaller states’ jackpots couldn’t keep up with more populous states.

Oregon, for example, was losing players from Washington and California, which offered jackpots of up to $20 million.

So officials in Rhode Island, Oregon, Missouri, Iowa, Kansas, West Virginia and Washington joined together to create Lotto America as a way to pool money and offer bigger prizes. They also hoped the bigger pots would attract first-time players.

“Our motivation is to offer Oregonians a chance to play in games that they could play in any of the major states,” Oregon Lottery Director James Davey said at the time.

The Interstate Lottery is modeled after those in Canada and the US Virgin Islands.

Officials had hoped that Lotto America would offer average weekly jackpots of $3 million to $5 million, with the possibility of higher prizes in a year or two. The costs of running the drawings and the profits from the sale of tickets were distributed among the jurisdictions in proportion to the sales of tickets for each state or territory.

“This is a whole new ball game,” Lotto America spokesman Jack Rattigan said at the time.

Lotto America originally offered players a chance to pick seven numbers from a field of 40 for a minimum bet of $1.

Players whose numbers match those selected in the weekly drawing will win a jackpot determined by the total number of tickets sold.

The odds of winning the jackpot were about 1 in 19 million, compared with odds of about 1 in 8 million in most state lotteries, officials said.

A bankrupt Iowa farmer was the first Lotto America winner in 1988. He said he would use the $3 million prize to save his family’s farm.

A year later, Lotto America switched to picking six numbers from a field of 54. That year, it offered a $20 million jackpot, and in 1991, the pot reached $50 million.

By 1992, Lotto America had grown to fifteen states.

The game was renamed Powerball in an attempt to give players a better chance of winning smaller prizes.

“What we’re hearing is that people like the big prize but want a better chance to win smaller prizes,” said Oregon Lottery Director James Davey.

Powerball soon offered a $100 million jackpot.

By the 1990s, however, players began to experience “jackpot fatigue,” and Powerball required larger and larger prizes to maintain interest, said Jonathan D. Cohen, author of “For a Dollar and a Dream: State Lotteries in modern America’. Meanwhile, instant scratch games grew in popularity and became a major form of lottery play.

In 2010, in an effort to attract more players and increase jackpot sizes, Powerball and Mega Millions, the two largest multistate lotteries, agreed to allow retailers to cross-sell both games for the first time.

A year later, the cost of a Powerball ticket increased from $1 to $2, and the initial jackpots doubled. The game is now available in 45 states, Washington, Puerto Rico and the US Virgin Islands.

These changes resulted in increased Powerball jackpots. The five largest Powerball jackpots have come in the last six years. The odds of winning the jackpot are now 1 in 292 million.

Lotteries are regressive, meaning that lower income groups spend more of their budgets on lottery games than higher income groups.

Powerball tends to be the least regressive lottery game, Cohen said, because wealthier people tend to buy tickets when jackpots jump.

But for most of the year, “there is a slow burn of disproportionately poorer people putting money into smaller prizes.”

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