Some lucky individual or individuals will eventually win the tremendous Powerball jackpot, currently estimated at $500 million for tonight’s drawing. But the real winners are the state governments and good causes that will benefit from the sales frenzy.
The game’s record jackpot means that the extraordinary year most lotteries had in fiscal 2012 – 32 set new sales records – will be followed up by another strong year. You see, that’s the challenge of jackpot games driven by the luck of the draw. Record jackpots trigger record sales, but the games run the risk of sagging the next year or two, often making lotteries look bad when in fact they are doing everything right.
And fiscal 2012 was always going to be a tough act to follow. Not counting the casino-style gaming run by some lotteries, sales of traditional lottery products in the United States approached $61 billion in fiscal 2012, up 8.7 percent from the previous year. Net revenues to good causes were $19.5 billion, although that figure includes net proceeds from the casino games offered by eight lotteries. These numbers and more can be found in the November issue of Lottery Insights, the official publication of the North American Association of State and Provincial Lotteries.
Sales were driven in no small part by a record Mega Millions jackpot last March, at $656 million currently the largest lottery prize in history. With a somewhat stronger brand identity, a $500 million Powerball jackpot should do even better for the 44 participating lotteries. And if it rolls again after the winning numbers are drawn tonight, you will likely see a new world record set for the next drawing on Saturday.
Critics have plenty to say about lotteries, but they often miss the point. For hundreds of years, lotteries have been used as a way to raise public funds. They aren’t designed as gambling games that pay back 90 to 95 percent of revenue (or even more) to players. They aren’t skill games like poker and even horse racing that appeal to a small segment of the population. They are a way to effectively raise money while giving the broadest possible audience a chance to win big prizes. It’s fun to dream. I’ll be dreaming with a Powerball ticket or two in my hand tonight.