Pricey picks: Powerball tickets doubling to $2
Monday, January 2, 2012
Powerball lottery organizers are betting that bigger jackpots will entice more people to play, but gamblers are going to have to dig deeper into their wallets to try their luck.
Tickets for the multistate game are doubling in price to $2 beginning Jan 15. While the odds of winning one of the game's giant jackpots also are improving, those in charge of the lottery are gambling that people are willing to pay more for the hope of becoming a millionaire in a down economy.
"With the price of everything else going up, there's not much you can get for a dollar anymore," said 28-year-old Ryan Raker, of Des Moines, Iowa, who buys a ticket once a month. He says he'll probably play less frequently now.
Lotteries have long sold regular people on the hope of becoming rich quick by simply picking a lucky combination of numbers. Some play loved ones' birthdays or anniversaries in the hope that fate may point them in the direction of a jackpot. Selling that hope is easy; less so is predicting consumers' sensitivity to price changes.
Powerball's move follows the model of scratch ticket games, which once were all $1 but now are offered at higher prices with the chance for bigger prizes.
The evolution of scratch tickets and the creation of families of games that offer tickets at different prices has proven successful across the country, said Rebecca Hargrove, president of the Tennessee Lottery. Scratch games like Win for Life in Illinois, Jumbo Bucks in Tennessee and the Crosswords game in Iowa have all been successful, Hargrove said.
"The more choices you gave players the higher the sales were," Hargrove said. "A family of games at multiple price points created the most excitement. Once those kinds of games were introduced we saw a dramatic increase in sales."
For example, in Iowa, scratch ticket sales increased from $125 million in 2007 to $165.3 million in 2011, state lottery officials said.
Lottery officials believe increasing the price of the game will make it more attractive to players, said Terry Rich, spokesman for the West Des Moines-based Multistate Lottery Association, which runs Powerball.
"People like variety," Rich said. "We're repackaging and freshening up the product and enriching the product."
Powerball is the big fish of the various lottery games states offer, and typically has some of the biggest payouts. There are nine ways to win the game, from a $3 prize for matching the Power Ball number to various payouts for different combinations of winning numbers.
Odds of winning are improving because of changes the game is making in the numbers players can choose. The number of Power Ball numbers to choose from will decrease from 39 to 35. That will raise the odds of winning from 1 in 192 million to 1 in 175 million.
Picking the right numbers will have a bigger payoff: The starting jackpot is rising from $20 to $40 million. The amount won for matching all five numbers but not the Power Ball will increase from $200,000 to $1 million.
The move is a strategy to differentiate the game from Mega Millions, the other big money, multi-state lottery game that is sold for $1 a ticket. Both games are sold in 42 states, plus the U.S. Virgin Islands and Washington D.C. Each game has drawings twice a week.
It could pay off, because consumers often get more excited about larger jackpots and play more. Clyde Barrow, a gambling expert at the University of Massachusetts-Dartmouth, said larger jackpots should attract more players, even at the higher price.
"As prizes escalate more people tend to enter the game," he said. "The big draw will be the size of the jackpot. The idea is that at $12 million people don't get too excited but when it crosses $140 million, more people will play and by increasing the price level of tickets you will reach that prize level much faster."
Rich said sales may dip at first but likely would climb as jackpots soar. Half of ticket sales are returned to the states where Powerball is played to help fund government programs.
"We wouldn't be doing it if we didn't think more money would be coming back to the states and help them with revenues during these tough economic times," Rich said.
Hargrove, the Tennessee lottery executive, said many players already pay an extra dollar to play an option called the Power Play, which can multiply winnings for prizes below the jackpot level.
In Oklahoma, 40 percent of players already are paying $2 for a Powerball ticket with the Power Play option. In Tennessee, nearly 30 percent pay to play the Power Play option. The option will continue to be offered for an extra dollar with the new changes, Hargrove said.
Still, the game may have work to do to win over players hesitant to fork over an extra dollar. Many say they'll simply play half as much, or switch to the less expensive Mega Millions.
Irwin Weitz, who owns an Atlanta home improvement business, said he buys five to 10 tickets each time the Powerball jackpot reaches $100 million. The 57-year-old said he's not swayed by promises of higher, faster-growing jackpots and will buy half as many Powerball tickets.
"I don't see the argument," Weitz said. "The reality is when the odds are so high, you're just gambling on a dream of becoming rich quick."
Katie Langel, manager of the Freedom Value Center convenience store and gas station in Sioux Falls, S.D., didn't like the idea, either.
"Say I've been buying (tickets) for years," she said. "I may just go to Mega Millions. I just don't really see why it has to go up to $2."
At the Navarro Pharmacy in Miami's Little Havana area, retired nursing home worker Maria Fernandez, 67, said playing the Powerball every week has given her hope. Fernandez, who lives off a small pension, said she can't afford more than the $5 a week she now spends so will have to play less.
"Poor people will not have as many chances to win," she said.
Zach Levy, a 23-year-old salesman from Atlanta, said he'll buy fewer Powerball tickets but won't give up altogether.
"I won't play as eagerly as I did before, but I still want to win," he said. "I would finally move out of my parents' basement."
Associated Press writers Christine Armario in Miami, Greg Bluestein in Atlanta and Kristi Eaton in Sioux Falls, S.D., contributed to this report.
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