Barb Caffrey's Blog

Writing the Elfyverse . . . and beyond

Powerball Execs Stupidly Raise Price to $2 per Line — Hello, Bad Economy, Anyone?

with 28 comments

Remember how I said a few days ago that I was having trouble coming up with meaningful blog subjects?

Well, forget that, because today’s blog subject is so easy I’m surprised no one else has taken a whack at it.

Put succinctly: who came up with the idea that Powerball should cost $2 per line rather than $1 in this terrible economy?  And why hasn’t that person been fired by now due to this atrocious idea, rather than Powerball being about to institute their new $2-per-line “fee schedule” on January 15, 2012?

As of that date, Powerball will raise its opening jackpot to $40 million (meaning you can never win less than this if you take the multi-year option prize) and will guarantee that you’ll win $1,000,000 if you match five of five numbers (rather than the current $200,000).  And they’re touting that the “overall odds” to win a prize will be better — I don’t see it, but whatever — which must be the reasoning they used.

But that is not enough to justify raising the price from $1 to $2 per line, especially as the popular “multiplier” feature is not included — it’s still separate.  So if you want to “multiply” your prize, you’ll now have to pay $3 per line rather than $2.  While this isn’t as big a jump — because the multiplier feature has remained the same at $1 per line — this is still a jump and most people won’t bother.

Now, as to the reality of why people play Powerball and other lottery games of chance?  It’s because we all want to hope for better, and Powerball plays off that in its advertising.  The typical Powerball ad says, “With one dollar, you can buy a ticket — and a dream.”  And that’s pretty much what you’re buying with regards to Powerball, as the overall odds aren’t that great (view current odds here).

Anyone with half a brain knows that playing the lottery is a fool’s game.  You’re better off, really, to bury your dollar in the backyard than you are to play the lottery, yet many people — including myself — do play the lottery mostly because they want to dream about something better.  And hey, there’s lots of ways to waste a dollar — so why not?

But when you’re talking about putting $2 down for each ticket rather than only $1, things change.  Suddenly, you’re having to pay double the amount of money and that doesn’t seem reasonable — especially as the economy remains awful in many parts of the country, including my own Wisconsin.

Which is why this is such a stupid idea that I really don’t understand why anyone would want to roll this out just past the New Year, especially considering how many people are struggling just to pay for the basics, much less optional luxuries like a lottery ticket.

Here’s what’s likely to happen with regards to Powerball as of 1/15/2012; sales will plummet.  Those who have a dollar and a dream will play MegaMillions instead (which draws on Tuesdays and Fridays in many states and has kept its price, sensibly, at $1 per line), or will play their own state’s lottery, or will maybe just save it and bury it in the backyard.

And the reason Powerball sales will plummet is this: the economy is bad.  It is brutal.  And in the Midwest, where money is at a premium, lottery sales have already gone down — so why do the Powerball execs want to make it even worse?

So if I can see this new “fee schedule” as a non-starter as a regular lottery player who’s spent more than her share of cash on the Powerball over the years, why can’t the Powerball execs?

Oh, yeah.  They must not have been hit by the horrible economy, so they actually think there’s enough money out there to do something like this.

I have news for you, Powerball execs: think again.  Or watch your business go south.  Way south.

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28 Responses

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  1. YES! you nailed it! how stupid are they. they think they have increasedf the odds by getting rid of a few balls (36 instead of 39). but as a sometimes player, my odds just doubled for the worse. $2 used to buy two chances. now it only buys one. that pretty much cuts my chances in half!

    kenny

    January 17, 2012 at 1:35 pm

    • Thanks, Kenny, for reading my blog and for commenting (and appreciating what I said, too).

      I agree with you. Technically, every single chance we have in Powerball, mathematically speaking, is one single chance, period — but if you double the amount it takes to play, that means Powerball players can’t play as many lines, which makes us feel like we have a better chance.

      Personally, I plan to play MegaMillions and my Wisconsin state lottery instead; even if the PB jackpot goes astronomical, it’s unlikely I’m going to be playing it any time too soon.

      I’ll be interested to see how long it takes them to reverse this disastrous policy. (If they want to make money, they’ll reverse it within a few weeks. If they honestly don’t care, well, it might take months.)

      Barb Caffrey

      January 17, 2012 at 5:05 pm

      • They can’t reverse it quickly, that would mean printing new play slips, etc. I will not buy any, anyway.

        steven

        January 29, 2012 at 6:27 am

      • That’s a good point, Steven. No matter how far their sales may fall — and I’ve heard nothing, not that they’re improved, not that they’re bad, just nothing at all — they must stick with this.

        Mind you, their bottom prize went from $3 with the old system to $4 now — which, while double what playing one line is without the PowerPlay (TM), is obviously less than the $3 payout for the one line before (going from 3x the payout to 2x the payout is not a step forward). I don’t know what they were thinking there, either, except that they obviously hoped that PowerBall players could not do basic math. ;-)

        Barb Caffrey

        January 29, 2012 at 8:27 pm

  2. I agree with your conclusion but only partly with the reasoning. The 2nd prize went up from 200k to 1 mil. But the odds of that prize is still so low that the incremental value added is barely 20 ¢. The other odds improvements add even less cumulative value. So, powerball players are net losers with this prize increase. I am amazed this has not been a big blog item. Thanks for bringing it up.

    Joe

    January 20, 2012 at 8:12 am

    • Thanks, Joe, for your comment.

      I am aware that the top prize went up, and perhaps I needed to be clearer about why I felt the price raising by a dollar to $2 per line wasn’t really commensurate with the better-paying “match five of five” numbers prize. I definitely agree with you that the odds-lowering is slight, at best, and it doesn’t really add to the value of a Powerball ticket, so once again, raising the price by a full dollar to double the price per line doesn’t seem fair or effective.

      Yes, we “Powerball players are net losers with this price increase.” (Very well said.) And I, for one, don’t see how the Powerball executives could possibly justify this to their higher-ups.

      I don’t know why this hasn’t been a big blog item thus far, Joe. I do think that most people don’t want to talk about gambling because it’s often been thought of as a moral failing. (I don’t share this view, at least not in moderation such as buying a single Powerball ticket.) And because they’d rather not confront the issue, they’ve maybe stayed away because they don’t want to admit they play Powerball, much less regularly as I have in the past.

      Right now, I’m boycotting Powerball. I do not approve of the price increase. I have better things to do with my money than give it to the Powerball execs. And if I wish to play lottery, I can do better, value-wise, with another game like MegaMillions or any number of state lottery games.

      Ultimately, that’s what consumers are going to have to do. But time will tell; I would assume if people continue not to buy Powerball tix due to the price increase that eventually the major media will catch on and we’ll see stories about it appearing regularly. (And you’re welcome re: bringing the subject up. Glad to do it.)

      Barb Caffrey

      January 20, 2012 at 9:53 pm

  3. With MegaMillions still at a dollar, MegaBall may have priced itself out of the market. The only people who would stick with MegaBall would be either really loyal customers, or people who really expect to hit the jackpot, thus the doubled jackpot really does make sense to them.
    I’m a casual player, I only play the lottery when it gets over 100m….but still, I would play both lotteries.
    From now on, i’m just a megamillions guy…. even if MegaMillions gets over 100 million, it costs too much to play consistently.
    I can’t drop 2 bucks for one line…. but i could drop 2 bucks for 2 lines!

    Chad

    February 15, 2012 at 8:19 am

    • Chad, that’s where I’m at also. I don’t like paying $2 per line, period. I’ll do it if the jackpot goes over $300 mil (I proved that last week and felt guilty over it), but otherwise I’d rather not.

      Right now, I play the MegaMillions and also the WI Megabucks (that’s two lines for $1). But I’m really trying my best to skip the Powerball as the only way I have to tell ‘em I don’t like this is refuse to play.

      Barb Caffrey

      February 15, 2012 at 11:43 pm

  4. I hate the fact it went up tp $2.00. I think its going to drive down sales. I used to spend $5.00 a week for five chances. Now i would have to spend $10.00. So to keep it around what i used to spend, i only buy 3 lines which still costs me $6.00. I think its a dumb idea. I wonder if the lottery has saw a decline in sales over this. They sure picked an awful time to raise ticket prices. But its just my opionion and im sure it doesnt count for much.

    kim

    March 11, 2012 at 2:17 pm

    • I am with you, Kim. I don’t think this was a smart move at all. But I’ve seen no numbers on why Powerball did this. I know that I haven’t bought very many lines on PB at all since then; just when the jackpot went up, and I used to be a regular player.

      And don’t discount your opinion. You have a right to one just like I do, or those PB execs do. I am firmly with you in that this seems like a very odd time — an awful time, just as you said — to raise their prices.

      Barb Caffrey

      March 12, 2012 at 4:06 pm

    • I see a decline in sales, already. Notice how the jackpots are going up the minimum amount(10 million) for each draw. What they should do is get rid of one game and run the other game three times a week. They should have choices for people who want to pay $1, $2 or $3 a draw and reward the $2 or $3 players with some sort of bonus prize. Our pool is doing slightly worse, since MM has a greater range with the Megaball compared to the Powerball. One person actually dropped out of the pool, even through it is way over 100 million dollars

      steven

      March 12, 2012 at 5:41 pm

      • I agree with you, Steven. I have noticed that they’re only going up 10 million now; I think for the first month they pumped more money into it, to make it look like folks are still buying the same amount of tickets as before.

        As for Mega Millions, I believe that is run by a different set of folks; they’ve “pooled” to a degree but ultimately each game is run separately. I’m still playing the same amount ($2 to $3, which is 2 to 3 picks) on Mega Millions as before; with PB, when I play at all, I now only play _one line_. So they definitely have lost money from me, as I’m no longer playing every draw, either.

        I’m sorry your pool isn’t doing as well as before. Wish I knew a solution other than for PB to reverse course.

        Barb Caffrey

        March 12, 2012 at 7:49 pm

  5. Our pool is doing worse, because we no longer hit $3 or $4 that often, no big deal.

    steven

    March 19, 2012 at 5:58 am

  6. Notice how the jackpot only goes up the minimum amour, now. I wonder who is going to foot another 40 million starting jackpot, each time(all the member lotteries, of course).

    Steven

    March 22, 2012 at 7:34 am

    • I have noticed it; right now the jackpot that’s climbing is the Mega Millions jackpot, where it’s still only $1 per line to play. (Coincidence? Probably not.)

      Barb Caffrey

      March 22, 2012 at 5:09 pm

  7. Powerball increased their prices to $2 and their odds of winning from 1:195,000,000 to 1:175,000,000. Whoopty-Doo! Megamillions odds of winning are 1:175,000,000 and still only $1. Statistics show that if you continue to play powerball, you are an idiot.

    scott putnam

    March 28, 2012 at 5:52 am

    • That’s basically my way of looking at it, too, Scott. (I really don’t understand why PB would want to do this, especially in a recessionary economy.)

      Barb Caffrey

      March 28, 2012 at 4:47 pm

  8. They actually told peopled why they did this. When everyone got both games, PB actually thought people would spend more money on both games. What really happened was people simply split what they spent between both games. They were too similar. so they raised the price of PB to make it a premium game that was supposed to go up faster, the problem was that it is easier to hit, so it has been hit before it can go really high. People now seem to have dumped PB and now play MM. PB claims sales are up an they were when it was 300 million. After it was hit, sales must have plunged. MM must be bringing in lots of money for their $1 tickets, the jackpot stands at $500 million dollars on 3-28.

    stevenr4472

    March 28, 2012 at 5:47 pm

    • Steven, I agree with you that people aren’t spending the money on PB. MegaMillions has gone up further, j/p wise, and it’s still a dollar — they’re advertising it exactly that way, too, which PB should’ve expected. PB didn’t lower its odds anywhere near enough to make raising the price a good move; further, the Power Play feature has been changed so there are set prizes if you play (three times the $4 play for a PB only win, to five times the regular prize to get to a $1M prize) and I don’t think that went over all that well, either. (They already had said that if you had the Power Play, you’d get the million dollar prize. But some of the other prizes have actually been lowered by this “fix.”)

      As for PB getting hit too soon to raise the j/p, that’s certainly true. But MM has also been very high during this time, and as you say, if you’re going to put money down on a lottery game right now, most people are playing MM instead.

      I hope to be able to spend my regular $2 for MegaMillions, and may spend up to $5 — that is, five bucks, as I refuse to spend more than that no matter how high the j/p goes, as I’m not in a pool of any sort — and right now, I’m not playing PB because I don’t like it that it went up to $2 during a serious recession (worse in the Midwest, where I live).

      Barb Caffrey

      March 28, 2012 at 6:23 pm

      • I am not sure on this one, but it seems that MUSL only manages the drawings and games. The member states actually vote on any changes. As for the changes, I do not know who came up with that one to vote on. I am just a regular player and I got this info from the Internet. Megamillions may be run the same way or not.

        stevenr4472

        March 28, 2012 at 6:36 pm

      • Understood. But I’ll tell you what — the people who voted to raise the price need to be fired, especially if any of them are from the Midwest. We can’t afford to pay for a $2 one-line ticket, for the most part; plus, MM is still only a dollar, which is why most people are playing _that_ instead.

        I really hope the people in the WI Lottery voted against this, even if they weren’t able to prevail; they really should’ve known better.

        Barb Caffrey

        March 28, 2012 at 9:22 pm

  9. Yes, I can just see some executive being pig headed about insisting on raising the PowerBall price. Well obviously it has backfired. People are instead putting their money into the Mega Millions.

    will

    March 29, 2012 at 2:20 pm

    • I agree. It has backfired and it has only helped Mega Millions — not Powerball.

      Barb Caffrey

      March 29, 2012 at 10:17 pm

  10. If I were able to keep all of the winnings and without uncle Sam putting his mitts on it , I’d be happy to pay 5.00 / game.

    Joe Dona

    April 5, 2012 at 6:51 pm

    • Well, to each his own . . . I know in California, they don’t take state tax on lottery winnings, so I sometimes wish I could move _there_. ;-)

      Barb Caffrey

      April 5, 2012 at 10:18 pm

  11. How come there is no information on Jackpot sales AFTER the 310 million dollar jackpot was hit? It is goping up the minium when it was 100 million dollars. I repeat 100 million dollars is a lot of money.

    stevenr4472

    May 20, 2012 at 8:03 am

    • I don’t know, Steven. I wish I did. Powerball hasn’t said much of anything about their sales figures. I just know that for the most part, I’m not buying Powerball due to the expense per line being $2 — that’s just too rich for my blood right now.

      Barb Caffrey

      May 20, 2012 at 6:11 pm

  12. Always good to find something new and interesting to learn from. Great website you’ve got here.

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    November 28, 2012 at 11:51 am


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