Mega Millions and other lottery jackpots: How consumers are being played

Americans love to play the odds -- especially when the jackpot's huge and the odds are slim. 

The officials who market state lotteries and nationwide games like Mega Millions and Powerball have clued into the fact that consumers open their wallets when they dangle a huge jackpot, even if the odds of winning are so small that players are more likely to be struck by lightning. The $1.6 billion Mega Millions prize to be drawn Tuesday night could be the largest prize in U.S. history. 

It's no coincidence that lottery jackpots continue to grow larger. The previous record was set in January 2016, when Powerball held a drawing for $1.59 billion. At least six out of the 11 jackpots valued at over $500 million have occurred during the last two years. The driver behind those increases are changes by lottery officials that make it harder to win, thereby driving up the jackpots. The result: Bigger jackpots -- and higher ticket sales on slimmer odds. 

The massive Powerball drawing in January 2016 created "buzz," New Hampshire lottery officials noted in a commission meeting. Sales were "outstanding," with Powerball sales surging 1,222 percent in a week, according to committee minutes.

That marks a far cry from a decade ago when lottery ticket sales were in a slump. While about 7 in 10 Americans played the lottery in the 1980s, the number fell to fewer than half of Americans by 2007, according to Gallup, which said it wasn't clear why consumers were turning away from the game. 

That prompted lottery officials to rethink their formulas. Powerball refreshed its design in 2015, with the new rules lowering the odds of winning the jackpot by expanding the numbers that players could pick.  Mega Millions followed suit in 2017 with a similar move, and it also doubled the price of a ticket to $2. 

While the lottery may seem like a game to ticket buyers, states rely on the game to help fund everything from educational expenses to environmental protections. Yet as Washington University visiting assistant professor in statistics Liberty Vittert writes, more states are using the money on other things, substituting lottery revenue for normal appropriations. 

That means Americans may not only pay the same or more on a ticket with lower odds, but also enjoy less funding than they expected on education, the environment or other causes. Quite a game, that.