In the past five years, lottery jackpots have topped $1 billion several times. A massive jackpot can attract more people to play, which leads to higher interest rates and worse odds for winning. That means winning the jackpot is a lot harder now than it was in 2021.
How to win the jackpot lottery
If you’re thinking of buying a lottery ticket, it’s important to understand how the game works. The jackpot prize pool grows each time a player submits a base ($1 per play) play to the state’s lottery system. The total value of a jackpot is calculated based on the prize pool’s current amount, the number of plays submitted, and market interest rates.
A lottery winner has two options for receiving the prize: cash or an annuity paid over 30 years. Most winners choose the lump sum, which is a little less than the total amount of the jackpot prize pool. The New York Lottery, for example, calculates how much a lump sum would be if the prize pool were invested in treasury bonds at current market rates for three decades. Then it pays the winner that sum, plus 29 annual payments that increase each year by 5%. If the winner dies before all the payments are made, the balance passes on to his or her estate.
Super-sized jackpots drive lottery sales, and they also earn the games a windfall of free publicity on news sites and newscasts. So it’s no wonder that lottery officials want jackpots to grow to newsworthy sizes more often, even if that hurts the chances for an eventual winner.
To do that, some states have changed the odds. In a typical lottery, players must pick four numbers from 52 possible choices. In a game with fewer numbers, like 2by2 in North Dakota, the odds are 1 in 105,625. In Mega Millions, which has five winning numbers and an extra Mega Ball from 70 available options, the odds are 18,000,000:1.
The other way to increase the size of jackpots is to make it harder to win them. That means changing the prize structure or increasing the number of balls. Changing the odds, however, can lead to lower ticket sales, and jackpots will shrink over time. So, lottery officials are always balancing the interests of ticket buyers and their desire for larger prizes.
When it comes to a strategy for winning the jackpot lottery, NerdWallet’s Kim Kovach suggests trying a few simple tactics. For starters, don’t buy tickets every day or two or three times a week. That can add up to thousands in foregone savings over time, she says. And if you do plan on playing, “think of it as money you’re spending for entertainment,” Kovach says. Visit your My NerdWallet Settings page to see all the writers you’re following.