Powerball math: Why lotteries keep making us stupid

Millions of us lost money on the $1.6-billion Powerball jackpot. And we’ll do it all again, of course. There will be another enticing $1-billion lottery pot sooner or later.

Which is why you should know how lotteries essentially have a new experiment underway. It spotlights how irrational we get when we dream of immediate riches.

You may have heard that back in October, state lotteries enacted changes that made our already spectacularly bad odds of winning the Powerball jackpot monumentally worse. It went from 1-in-175-million to 1-in-292-million. But then, as a nation, we’ve never been particularly good at math.

The reason for doing this? It’s a way for the lotteries to increase ticket sales.

Let me repeat that with different words and in capital letters: WHEN OUR CHANCES OF WINNING GET WORSE, THEY THINK WE WILL GAMBLE MORE.

So far, it looks like they’re right.

“As we make the odds of winning astronomically lower, you have the potential for huge jackpots,” said Stephen Wade.

He’s the research and development director for the state of Washington’s lottery and a consultant for others. I stumbled upon some of his projections in an industry trade journal, where he predicted the revised Powerball odds will cause its national sales this year to increase 20 percent over what they would have been otherwise.

Follow the dominoes: The worse the chances of winning, the more likely that no one will win the jackpot in each drawing. Which means the jackpot will get bigger. Which will get more people excited about playing. Which will attract more media attention. Which will bring in even more players who usually sit on the sidelines. Which means the lotteries should rake in more money.

(For their next trick, lotteries will prove how they can make us hit our own heads with a bat just so we can feel relieved in between each blow.)

Are we stupid?

We say we are smart enough to know we won’t win. But we play because we think we might anyway. Even when the odds get worse.

So I asked Wade: Are we stupid?

“We are all more or less some parts rational and some parts irrational,” he told me. “I haven’t met very many people who play the lottery rationally.”

But that’s part of the thrill, he said. People have the rational things they do in their lives. And then they have the lottery.

Just in Georgia, we bought 53.5 million Powerball tickets since early November to build up to the big jackpot. Nationwide, people devoured 1.59 billion tickets. (That should mean there’s enough losing tickets to make a towering papier-mache monument to our lottery ambitions.)

Of course, even as people dream of winning, they worry about what happens if they actually do score fabulous riches. In a column I wondered whether stunned new winners say to themselves, “Oh, crud. What have I done?

I recently visited the home of a guy who landed a $1 million prize. At first, someone in the home denied that the person I was looking for lived there. Later, it became clear that they were afraid criminals would find out they had come into money.

I suppose that’s why State Sen. Josh McKoon, R-Columbus, proposed legislation that would allow Georgia lottery winners to remain anonymous if they agree to “donate” 25 percent of their winnings to the HOPE scholarship fund.

Does that sound like a government shakedown capitalizing on the fears of Georgia’s citizens? Asked about the proposal on a national TV morning news show, ABC “Shark Tank” on-air investor Barbara Corcoran suggested that the legislator “should be examined” or jailed.

McKoon tweeted recently that he plans to drop the fee for anonymity in Senate Bill 179. (He didn’t return my repeated calls and emails seeking comment.)

Six states — Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina – already allow Powerball winners to remain secret. Several others sometimes restrict disclosures about lottery winners or are thinking about new limits.

A splash of sunlight

I’m not convinced it’s wise to allow lotteries to dole out hundreds of millions or even a billion dollars in public funds without disclosing who gets it. Without the splash of sunlight, it sounds like an invitation for fraud.

Georgia Lottery Corp spokesperson Tandi Reddick emailed me that sharing the names of winners “validates the integrity of our offerings and demonstrates that real people are winning our games.”

Lottery marketers want to share our names. It’s part of how they convince us that people like us really do win.

We are, though, getting increasingly treasure numb when it comes to the big games.

Wade, the lottery executive from Washington state, told me a decade ago jackpots of $100 million or more would cause a spike in lottery sales. Then $300 million became the new frenzy point. Now, in a post-$1-billion-jackpot world, Wade is convinced it will take even more money to get us jazzed.

Don’t sweat it too much, though. Powerball apparently is harvesting a new crop of young players thanks to the last massive payout.

Texas Lottery executive director and Powerball Group chairman Gary Grief told a gaming news site that “20 and 30 something’s were ‘discovering’ the Powerball brand and game…. The attractive jackpot taught them how to play, when to play, and forever impressed them with the ‘power’ of the Powerball brand.”

I suppose it also taught them not to worry about math and statistics.

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Matt Kempner’s email: mkempner@ajc.com Follow him on Twitter: @MattKempner and Facebook: AJC Unofficial Business columnist Matt Kempner ( https://www.facebook.com/mattkempnercolumnist )

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