Investing

Is a $1 Billion Lottery Jackpot Possible?

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Beginning in October, the rules governing the multi-state Powerball lottery are changing, and the already-long odds of winning are going to get even longer. The good news: the jackpots will get significantly larger, and the first $1 billion prize is not really a question of “if” any more, but of “when.”

The odds of winning the current Powerball lottery jackpot are 1 in 175,223,510. In October the odds rise to 1 in 292,201,338. It will get a little easier to win a $4 prize, as the odds there drop from 1 in 111 to 1 in 92.

In the current Powerball game, players choose five numbers from one set of 59 numbers and one number from a set of 26 additional numbers. Under the new rules effective in October, the first number set will increase to 69 numbers and the second number set will increase to 35.

As Powerball jackpots get larger, more tickets are sold. That means that chances improve that someone will win just because there are more tickets out in the wild. But the change in odds makes a huge difference in the possibility of a $1 billion jackpot.

Walt Hickey of FiveThirtyEight has done the math:

Based on a basic model I built that simulates Powerball jackpots over the next five years of play, the odds change makes a huge, huge difference. Under the old (1 in 175,223,510) odds, there was a billion-dollar lottery in only 8.5 percent of the simulated five-year periods. But under the new (1 in 292,201,338) odds, there was a billion-dollar lottery in 63.4 percent of the simulated five-year periods.

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Based on another model that Hickey built, he ran a simulation that projected that a lottery in which there was no winner for 16 consecutive drawings would lead to a $1 billion prize for the 17th drawing. Using the current odds, there is a 94% chance that someone will win the 16th drawing, compared with an 82% someone will win under the new odds.

That $1 billion prize just gets closer, and our recommendations on what not to do if you win could come in mighty handy.

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