Finally -- some terrific news has come out of the world of lotteries. For too long, the news has mostly been bad, as I've reported previously:
The good news is that Powerball payouts are increasing. The jackpot currently begins at $10 million, but by the end of the summer, it will rise to $15 million, with each subsequent drawing hiking the jackpot by at least $5 million. The second prize is being doubled, from $100,000 to $200,000. Powerball is a multi-state affair, with some 29 states participating and offering residents the chance to play twice a week.
Not only are the payouts increasing, but so are the number of little white balls. That's right -- there will soon be 55 of them instead of 53. Wait a second, though... more balls means more numbers to choose from, which means the odds of winning are growing more remote. Your likelihood of winning the jackpot is going from 1 in 120.5 million to 1 in 146.1 million. Hmm.
Think about it like this:
- Imagine that you're in a room with 120 million people. That's more than the populations of South Africa, Italy, Cambodia, and Armenia combined. (It will have to be a big room.) To imagine the odds of your Powerball ticket winning the jackpot, imagine being randomly chosen out of all those people. Now, imagine that the entire population of Malaysia enters the room. You've got close to 146 million people in this room now (and it's getting a little warm). Imagine being the one person randomly selected out of all of them.
- Another way to think about it is that 146 million is very close to the entire population of Russia. Imagine picking one name out of all of Russia's phone books.
- 146 million is also close to half of the population of the United States. The odds of winning the Powerball jackpot are like picking two people randomly out of all of America, all 50 states. If you think you have a good chance of being one of those two people, then go buy a lottery ticket.
- 146 million years ago was roughly the Jurassic period, when dinosaurs roamed the earth. Mars is roughly 140 million miles from Earth. A typical number of hairs on a human head is about 130,000 -- so to get to 146 million, imagine 1,123 people and then imagine choosing one hair on one of their heads.
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FedEx (NYSE:FDX) delivers more than 6 million shipments for express, ground, freight, and expedited delivery services each day, so 146 million represents some 24 days' worth. Imagine all the packages that FedEx delivers in 24 days, and then imagine the odds of your picking the one package among them that has a jackpot in it.
- I've read that you're more likely to die in a car crash on your way to buy lottery tickets than you are to win a Powerball jackpot.
So why are these lottery changes being made? Well, bigger jackpots tend to draw more players. And more players means more money in the system. Remember, lotteries don't exist to reward gamblers, they exist to raise revenues. From gamblers.
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.
