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New York - Record Powerball Jackpot Boosted To $500M

Published on: November 27, 2012 12:47 PM
By: AP
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Alma Villaseno (R) helps customers at a Valero gas station in Dallas, Texas, USA, 27 November 2012. The Powerball drawing on 28 November, was boosted today to $500M EPA/LARRY W. SMITHAlma Villaseno (R) helps customers at a Valero gas station in Dallas, Texas, USA, 27 November 2012. The Powerball drawing on 28 November, was boosted today to $500M EPA/LARRY W. SMITH

New York - The historic Powerball jackpot boosted to $500 million on Tuesday was all part of a plan lottery officials put in place early this year to build jackpots faster, drive sales and generate more money for states that run the game.

Their plan appears to be working.

Powerball tickets doubled in price in January to $2, and while the number of tickets sold initially dropped, sales revenue has increased by about 35 percent over 2011.

Sales for Powerball reached a record $3.96 billion in fiscal 2012 and are expected to reach $5 billion this year, said Chuck Strutt, executive director of the Des Moines, Iowa-based Multi-State Lottery Association, the group that runs the Powerball game.

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There has been no Powerball winner since Oct. 6, and the jackpot already has reached a record level for the game. It was first posted at $425 million but revised upward to $500 million when brisk sales increased the payout. It’s the second highest jackpot in lottery history, behind only the $656 million Mega Millions prize in March.

It took nine weeks for the Mega Millions jackpot to get that high, before three winners — from Kansas, Illinois and Maryland — hit the right numbers, each collecting $218.6 million for their share of the split.

With soaring jackpots come soaring sales, and for the states playing the game, that means higher revenue.

“The purpose for the lottery is to generate revenue for the respective states and their beneficiary programs,” said Norm Lingle, chairman of the Powerball Game Group. “High jackpots certainly help the lottery achieve those goals.”

Of the $2 cost of a Powerball ticket, $1 goes to the prizes and the other dollar is kept by the state lottery organization, said Lingle, who also is executive director of the South Dakota Lottery. After administrative overhead is paid, the remaining amount goes to that state’s beneficiary programs.

Some states designate specific expenditures such as education, while others deposit the money in their general fund to help supplement tax revenue.

The federal government keeps 25 percent of the jackpot for federal taxes.

Most states withhold between 5 percent and 7 percent. There’s no withholding in states without a state income tax such as Delaware, Pennsylvania, South Dakota, and Texas. A New York City winner would pay more than 12 percent since the state takes 8.97 percent and the city keeps 3.6 percent.

Powerball and Mega Millions games are seeing jackpots grow faster and higher in part because the states that play both games agreed in 2010 to sell to one another.

Both games are now played in 42 states, Washington, D.C., and the Virgin Islands. The larger pool of players means jackpots roll over to higher numbers faster, which tends to increase the buzz about the jackpots which increases sales. It all can result in higher jackpots sooner.

“It really happened with both of these games became national games,” said Terry Rich, CEO of the Iowa Lottery.

Still, just seven of the top 25 jackpots occurred after January 2010 when the cross-selling began. That just points to the unpredictability of games of chance like lotteries. It still comes down to the luck of the numbers, Rich said.

It has been proven that once the jackpot reaches a certain threshold more players buy.

Between $20 and $30 million in tickets were sold between Wednesday and Saturday drawings for most of October. Once the jackpot hit $100 million on Oct. 27, nearly $38 million worth of tickets were sold by Oct. 31. As the jackpot grew to more than $200 million on Nov. 17, sales surged by nearly $70 million by the next Wednesday. Then the jackpot reached over $300 million on Nov. 24 and ticket sales over the next four days surpassed $140 million.

“Somewhere around $100 million those occasional players seem to come back into the stores in droves,” said Rich, the Iowa Lottery CEO. The lottery also notices a significant increase in workers and other groups joining together in pools to combine resources to buy numbers, he said.

Trina Small, manager at the convenience store in Bondurant, Iowa, where a couple bought a $202 million ticket on Sept. 26, said sales have been heavy. She said Monday night Powerball sales were at about $800, at least $200 more than normal. She expects Tuesday and Wednesday sales to be even more.

“It’s kind of like Black Friday all over again,” she said.

Small doesn’t usually play the lottery herself but said she may buy a chance at the record jackpot. She’s just trying to decide if her chances are better buying it elsewhere since a jackpot ticket was sold at her store just two months ago — the old adage about lightning striking twice.

“The odds are against you anyway but I’m pretty sure they’re more against you getting one from this store,” she joked.

Powerball has posted sales exceeding $714 million in the current jackpot run since early October and it’s possible more than $1 billion in tickets will have been sold by the end of Wednesday when the next drawing is held.

A single winner choosing the cash option would take home more than $327 million before taxes.

Strutt said the chance of getting a winner this Wednesday is approaching 60 percent.


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1

 Nov 27, 2012 at 01:05 PM neezoogshoin Says:

I wouldn't want, nor would know what to do with so much mon.....

Who am I kidding lol. Bring it on!

2

 Nov 27, 2012 at 01:30 PM yaakov doe Says:

I'm in it to win it since Sunday. The tzedakas in Brooklyn will rejoice!

3

 Nov 27, 2012 at 06:38 PM Hatzolhack Says:

It will sure help with such a jackpot to be able to afford the prices of gas, game on

4

 Nov 27, 2012 at 05:53 PM anonymous Says:

Reply to #2  
yaakov doe Says:

I'm in it to win it since Sunday. The tzedakas in Brooklyn will rejoice!

and you'll get to reconnect with all those distant relatives who haven't been in touch with the family for 50 years (and who, coincidentally, are a little short of money this month)

5

 Nov 27, 2012 at 07:00 PM Please Remember Us Says:

If anyone out there wins, please don't forget the hurricane victims. Even if you don't win, please don't forget us. Thank you.

6

 Nov 27, 2012 at 09:12 PM TexasJew Says:

I predict no one will win this Weds. and it will reach 770M on Sat. with one winning ticket bought in Crown Heights. (Hopefully by a Lubavitcher).

7

 Nov 27, 2012 at 09:13 PM me-myself-my-shadow-and-I Says:

Reply to #5  
Please Remember Us Says:

If anyone out there wins, please don't forget the hurricane victims. Even if you don't win, please don't forget us. Thank you.

there are federal grants for that. leave my money alone. If I win - it's my win. my money has nothing to do with some houses being torn away in a neglected part of Brooklyn who always saw themselves as an elite breed living secluded on the waterfront.
If you had the money to buy property in ocean view communities, then you could probably afford to rebuild your houses. Not every loss should become a burden on society as a whole.
as a side-note, I'm just wondering how much money was donated from Seagate/Farackaway to Katrina victims. Only now that they're screwed do they beg everyone to help them. Did MBD sing for other victims too, or only when his basement and studio is flooded does he use his vocal chords for free?

8

 Nov 28, 2012 at 02:21 AM trachtgut2 Says:

Reply to #7  
me-myself-my-shadow-and-I Says:

there are federal grants for that. leave my money alone. If I win - it's my win. my money has nothing to do with some houses being torn away in a neglected part of Brooklyn who always saw themselves as an elite breed living secluded on the waterfront.
If you had the money to buy property in ocean view communities, then you could probably afford to rebuild your houses. Not every loss should become a burden on society as a whole.
as a side-note, I'm just wondering how much money was donated from Seagate/Farackaway to Katrina victims. Only now that they're screwed do they beg everyone to help them. Did MBD sing for other victims too, or only when his basement and studio is flooded does he use his vocal chords for free?

wow bitter much?? or jealous much! not everyone who lost everything is filthy rich! and wow what do you have against MBD?? Jewish musicians don't have money! This isn't hollywood! Half of they're cds don't get sold because people copy them! they're lucky if they scrape even! and by the way! do your research! i felt the same way about sea gate at first but turns out that not all the houses are on the beach and may of the houses that got damaged do not belong to well to do people. (Think is though, the rich ones will get the government help and the donations and the poor wont get a thing... just saying... its a mazal thing apparental or knowing how to do things the non straight way...)

9

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