Powerball

This article is about the U.S. lottery game. For the Australian version, see Powerball (Australia). For other uses, see Powerball (disambiguation).

File:Powerballlogo.png

Powerball logo

Powerball is an American lottery game sold through U.S. lotteries as a shared jackpot pool game. It is coordinated by the Multi-State Lottery Association (MUSL), a non-profit association formed by an agreement with member lotteries. Powerball is available in 31 states, the District of Columbia, and the U.S. Virgin Islands.

Powerball drawings are held every Wednesday and Saturday at 10:59 p.m. Eastern time. The drawings are regularly held at Universal Studios in Orlando, Florida. Occasionally, drawings are held at remote locations, sometimes to promote the game's expansion to new locations. The results of drawings are not official until they are audited by the accounting firm LWBJ, LLP.

Background and History

Powerball's predecessor began in 1988; it was known as Lotto*America. The game, and name, were officially changed to Powerball on April 19, 1992. The first drawing was held on April 22, 1992.

When it was launched Powerball became the first game to use two drums as its core game. Using two drums offers more flexibility in game design, allowing for the possibility of both high jackpot odds and low odds for other prize levels. The two-drum concept was suggested by Steve Caputo of the Oregon Lottery. The two-drum concept has since been copied by Mega Millions (formerly The Big Game) in the U.S., Australia's Powerball, Thunderball in the United Kingdom, and EuroMillions.

Through 2008, Powerball drawings were held Wednesdays and Saturdays, usually at Screenscape Studios in West Des Moines, Iowa. The drawings' maine emcee was longtime Iowa radio personality Mike Pace, who had hosted MUSL drawings since the organization began in the late 1980s. In 1996, Powerball went "on the road" for the first time, holding five remote drawings at the Olympics. Ironically, weeks later, the Georgia Lottery becomes the first, and only, lottery to leave Powerball.

On November 2, 1997, the annuity was changed from 20 to 25 yearly payments, and the cash option was added. Currently the annuity consists of 30 graduated payments (increasing 4% annually) over a period of 29 years.

On March 7, 2001, an optional multiplier (called "PowerPlay") was added, allowing players to multiply non-jackpot winnings by up to 5 after paying an extra $1 per play. A wheel was introduced to select the PowerPlay multiplier for each drawing.

On October 9, 2002 the 1x was removed from the PowerPlay wheel.

Powerball is currently played in 33 jurisdictions, including District of Columbia and the U.S. Virgin Islands, compared to its rival, Mega Millions, which is played in 12 states. Arkansas was the most recent jurisdiction to join Powerball; it began selling tickets on October 31, 2009.

Game change in January 2009; Florida hosts drawings

We like to party, We like we like to partyWith the start of Powerball sales in Florida on January 4, 2009 (with its first participating drawing January 7), the matrices changed to 5/59 + 1/39 (adding four white ball numbers and dropping three red balls). This change has worsened the jackpot probability from 1:146 million to 1:195 million, the overall probability dropped to 1:35.

Based on statistical projections, the average jackpot won increases from $95 million to $141 million. Over 3.5 million additional prizes are expected to be won yearly (based on the same sales level) due to the drop in overall probability. The starting jackpot has increased to $20 million. The jackpot contribution has increased from 30.3% to 32.5% of total sales.

The PowerPlay option, available for an extra $1 charge per play, continues to multiply lower-tier prizes by either 2×, 3×, 4× or 5× with an equal chance of each multiplier, except that the Match 5+0 prize of $200,000 automatically has a multiplier of 5× for PowerPlay wagers, making the Match 5+0 prize $1 million, paid in a lump sum.

The special rules allowing for a Match 5+0 bonus second prize if the jackpot exceeds its previous record by $25 million, triggered only twice, continue.

The conditions for Florida joining Powerball included a relocation of the live drawings from West Des Moines, Iowa, to Universal Studios in Orlando, Florida. The three hosts rotating announcing duties from Universal Studios are Tracy Wiu, Elizabeth Hart, and Scott Adams. (MUSL headquarters remain in Iowa; its other games, except for its Ca$hola (video lottery), continue to be drawn there.)

The wheel that was used to determine the PowerPlay multiplier has been retired; a random number generator (RNG) is used for the Florida drawings.

Playing the game

Basic Game

Currently Powerball costs $1 per ticket. For each ticket they purchase players must select five numbers from a set of 59 (white balls) and one number from a set of 39 (The PowerBall). Players can select their numbers on their own, or, they can elect to have the lottery computer randomly select one or more of their numbers (called "quick pick", "easy pick", etc. depending on the Powerball jurisdiction. For each drawing, the winning numbers are selected in the same fashion using two ball machines; one contains white balls numbered 1 through 59, and the second is the Powerball machine containing the red balls numbered 1 through 39. Five balls are drawn from the first machine, and one from the Powerball machine; these become the official winning numbers. Tickets which match at least three white balls and/or the red Powerball are winners.

Two identical machines are used for each drawing, randomly selected from a total of four machines. The model of machine used is the Halogen, manufactured by Smartplay International of Edgewater Park, New Jersey. There are eight numbered sets of balls (four white, four red); one set of each color to be used for the drawing are also selected. The balls are mixed by a turntable at the bottom of the machine that propels the balls around the chamber. When the machine selects a ball, the turntable slows to catch it, sends it up the shaft, and then down the rail to the display.

Over the years the draw matrix has varied:

Starting date	Pick 5 out of	Pick 1 out of	Odds to win Jackpot	PowerPlay multipliers
April 22, 1992	45	45	1:54,979,155	none
November 5, 1997	49	42	1:80,089,128	none
March 7, 2001	49	42	1:80,089,128	1x, 2x, 3x, 4x, 5x
October 9, 2002	53	42	1:120,526,770	2x, 3x, 4x, 5x
August 28, 2005	55	42	1:146,107,962	2x, 3x, 4x, 5x
January 7, 2009	59	39	1:195,249,054	2x, 3x, 4x, 5x

PowerPlay

For an additional $1 per ticket, the player may activate the optional PowerPlay feature, which applies a multiplier drawn by random number generator, to all prizes except the jackpot. Depending on the PowerPlay number, players may multiply non-jackpot prizes by 2x to 5x. The multiplier for the 5+0 (second prize) is guaranteed to be 5x.

A promotion from March 2 through March 29, 2006, replaced one of the four 5× slots, (when the multiplier was selected using a wheel), on the PowerPlay wheel with 10x. The 10× multiplier was drawn once, on March 11, 2006. The 10× multiplier returned in April 2007; again, it came up one time. The 10× space came back on April 2, 2008, with the ball finding the 10× space twice for the first time in a 10× promotional period. During each promotion, MUSL guaranteed that the ball would land in the 10× "space" least once, extending the promotion into a second month, and beyond that, if necessary.

PowerPlay's success has led to similar multipliers in some other games, such as the tripler in MUSL's smaller Hot Lotto, called Sizzler (Triple Sizzler in North Dakota), and Megaplier (exclusive to Texas) for Mega Millions. The Florida Lottery added Xtra to its Florida Lotto game October 14, 2009.

Payout and Odds

Payouts (on the base $1 play) are according to the following:

Matches	Prize	Current probability of winning
Zero numbers, plus Powerball	$ 3	1:61.74
1 number, plus Powerball	$ 4	1:123.48
2 numbers, plus Powerball	$ 7	1:787.17
3 numbers, no Powerball	$ 7	1:359.06
3 numbers, plus Powerball	$ 100	1:13,644.24
4 numbers, no Powerball	$ 100	1:19,030.12
4 numbers, plus Powerball	$ 10,000	1:723,144.64
All 5 numbers, no Powerball	$ 200,000	1:5,138,133.00
All 5 numbers, plus Powerball	Jackpot	1 in 195,249,054.00

Overall probability of winning a prize is 1 in 35.11. All non-jackpot prizes are fixed amounts, although they may be reduced and paid on a parimutuel basis if the number of winners at each prize level exceeds the funds in the prize pool for that drawing.

Some may notice that the odds of matching only the Powerball (1-39) are 1:62, instead of 1:39. This is because there is a chance of matching at least one white ball in addition to the Powerball. Additionally, some may calculate the jackpot odds at 1:17 billion versus the actual 1:~195 million. This is due to the lottery being concerned with combinations rather than permutations.

To put these odds in perspective, in the US in 2008 there were 1.03 deaths per 100 million vehicle miles traveled. A person living one mile from a retailer selling Powerball tickets is four times as likely to die in an accident traveling to and from that store (two miles) than winning the Powerball jackpot on a $1 play. (Jackpot odds = 1 in 195 million; chance of death from vehicle accident= 2 miles * 1.03 deaths / 100 million miles); 1 jackpot = 2 * 1.03 * 195 million / 100 million = 4.02 deaths.

Jackpot Accumulation and Payment Options

Jackpot winners have the option of receiving their prize as a single lump sum payment or as a graduated annuity paid in 30 installments over 29 years. Each annuity payment is 4% higher than in the previous year to adjust for inflation over the length of the annuity.

The advertised estimated jackpot represents the total payments that would be paid out to a jackpot winner should they accept the 30-installment option. This estimate is based on the current funds accumulated in the jackpot prize pool rolled over from prior drawings, expected sales for the current sales cycle, and current market interest rates for the securities that would be used to fund the annuity. The estimated Jackpot is usually

32.5% of the (non-Powerplay) revenue of every ticket sold is submitted by MUSL members to accumulate into a prize pool to fund the jackpot prize for each drawing. If no ticket wins the jackpot in a particular drawing, the prize pool carries over to the next drawing and continues to accumulate until someone wins. This prize pool is exactly the cash value that would be paid to a Jackpot winner if they elect to take the lump sum. If the winner chooses the annuity option current market rates are used to calculate the graduated payment schedule and the initial installment is paid. The remaining funds in the prize pool then invested to generate the income required to fund the remaining installments. If there are multiple tickets sold with the winning combination for a drawing, the jackpot prize pool will be equally divided for each of the winning tickets.

MUSL and its members accept all investment risk and are contractually obligated and liable to the winner to make all scheduled payments to jackpot winners. If a jackpot winning ticket fails to be redeemed, the funds in the prize pool will be returned to members in proportion to the amounts they contributed to the prize pool. Different Powerball jurisdictions have different laws regulating how unclaimed funds must be used.

When the Powerball jackpot is won, the next jackpot is guaranteed to be at least $20 million (annuity). When the top prize is not won, the next jackpot is guaranteed to be at least $5 million higher than the prior drawing. The lump sum prize is guaranteed to be at least the current value of the annuity prize. If revenue from ticket sales fails to accumulate enough into the prize pool to equal the current value of the guaranteed annuity, MUSL members must contribute additional funds to the jackpot pool to cover the shortage. The most likely situation in which there would be a shortage in the jackpot pool is there are jackpot winners in consecutive drawings. Usually by the third drawing in a rollover series the jackpot pool is increased by more than the minimum $5 million.

When the Powerball jackpot reaches a new record, the annuity jackpot amount is capped at $25 million more than the prior drawing. If revenue from ticket sales for that drawing exceed the amount required to fund the $25 million increase to the annuity jackpot, the excess accumulates into a bonus prize pool. This is shared and paid in a lump sum to all tickets that match 5+0 if during the same drawing at least one ticket wins the jackpot. Otherwise, the amount accumulated in the bonus pool rolls over to the following drawing's bonus pool until the jackpot prize pool is won. If, unexpectedly, the bonus prize pool is to be awarded but there are no 5+0 tickets, the bonus prize pool is to be divided among all 4+1 winners. The bonus prize is in addition to the regular prize earned by the 5+0 or 4+1 ticket. Bonus prize pool funds for winning tickets that expire unclaimed are returned to the members in proportion they contributed to the prize pool for those drawings.

Generally, Powerball jackpot winners do not have to choose cash or annuity until after claiming (then they usually have 60 days to do so). However, in Florida and Missouri, the 60-day "clock" starts with the drawing, so a jackpot winner who wishes to take the cash option needs to make immediate plans to claim their prize. (In Idaho, winners have only 30 days after claiming to make the choice.) Powerball winners, including the jackpot, must claim their prizes within a period ranging from 90 days to one year, depending on the rules of the MUSL member where the ticket was bought.

Secondary Prizes

Unlike the jackpot pool, the secondary and PowerPlay prizes are the responsibility and liability of each participating MUSL member. All revenues for Powerball ticket sales not earmarked for the jackpot pool, including the PowerPlay revenue, are retained by each member and none of this revenue is shared across participating lotteries. Members are liable only for the payment of secondary prizes sold in their jurisdiction.

Since the secondary prizes are defined in fixed amounts, on rare occasions, if the number of winning tickets at a prize level exceed the funds in the prize pool for that level, the amount of the prize may be reduced and the prize pool be distributed on a parimutuel basis and result in a prize lower that the fixed amounts given in the prize tables. Because the secondary prize pools are calculated independently, it is possible the prize may be lower in one jurisdiction, yet remain at their advertised level in the other Powerball jurisdictions.

Winning expectation

Because the quoted jackpot amount is paid as an annuity over 29 years, its immediate cash value to the winner is close to, but less than, half the advertised amount of the prize. The actual ratio depends on projected interest rates and other factors. MUSL starts with the cash value, built from a percentage of sales (currently 30%) and then calculates the advertised Jackpot amount from that value based on the average costs of the three best securities bids.

When the actual Jackpot is $200 million, a player's winning expectation is $0.68 if no one else is playing. This is the best scenario for the player because the winning will not be diluted in sharing. The expectation of 0.68 means that the player will lose about 32 cents on a $1 ticket, on average. The player will lose more in reality because others are also playing.

The player's expectation gets better when the jackpot becomes higher. If the jackpot is $400M, a player's winning expectation becomes $1.19 before tax. If the jackpot is $20M, a player's winning expectation becomes $0.22. The break even point is for the jackpot to be $323M, in which case the player loses no more than the tax paid. All these numbers are based on the best scenario in which no other players are sharing the prize.

With the jackpot at various levels, if a player pays $1, the net expectation is shown in the following table:

Jackpot (approximate)	Cash Value	Winnings per Dollar Spent
$20M	$15M	$0.22
$50M	$25M	$0.30
$100M	$50M	$0.43
$200M	$100M	$0.68
$300M	$150M	$0.94
$323M	$161.5M	$1.00
$350M	$175M	$1.07
$400M	$200M	$1.19

It should be noted, however, that since the jackpot is shared in the case of multiple winning tickets, the high interest (and ticket sales) created by large jackpots reduces the expected value of the jackpot, and thus the real-world expected return under these conditions are lower than those stated on the table.

Largest payoffs

The largest Powerball jackpot of $365 million occurred on February 18, 2006 and was won by a single ticket in Nebraska. It was shared by eight persons who worked for a Conagra meatpacking plant. They elected to receive their winnings as a lump sum in the amount of $177,270,519.67.

A grand prize won on October 19, 2005 worth $340 million was awarded to the West family of Jacksonville, Oregon. The family won less than two months after the rules were changed to promote larger jackpots. Steve West, who purchased the winner, paid $20 of his money for tickets, along with $20 from his in-laws. The family planned to split the prize among themselves.

Prior to the $340 million winner, Jack Whittaker of West Virginia was the claimant to the biggest one-ticket jackpot. He won almost $315 million on Christmas Day, 2002.

On August 25, 2007, a jackpot worth $314 million was won by a retired auto worker from Ohio; that ticket was bought in Richmond, Indiana, a community that has sold two jackpot-winning tickets of at least $200 million each.

Fortune cookie payout

The Powerball drawing on March 30, 2005 game produced an unprecedented 110 second-prize winners, all of whom picked the five white balls correctly, but not also the Powerball number. The total payout to 5+0 winners was $19.4 million; 89 tickets won $100,000, and the other 21 tickets won $500,000 due to the Power Play option.

Powerball officials initially suspected a reporting error or fraud, but it turned out that all the winners received their numbers from fortune cookies made by Wonton Food Inc., a fortune cookie factory in Long Island City, Queens, New York. The factory had printed the five regular numbers (22, 28, 32, 33, and 39) on thousands of fortunes. The sixth number in the fortune, 40, did not match the Powerball number, 42. None of the employees of Wonton Food played those numbers.

Powerball participants

U.S. jurisdictions with Powerball, as of October 30, 2009; note: Arkansas, the District of Columbia, and the U.S. Virgin Islands also participate

• Arizona (joined MUSL in 1994)
• Arkansas (began on October 31, 2009)
• California (future)
• Colorado (2001)
• Connecticut (1995)
• Delaware (1991)
• District of Columbia (1988)
• Florida (2009)
• Idaho (1990)
• Indiana (1990)
• Iowa (1988)
• Kansas (1988)
• Kentucky (1991)
• Louisiana (1995)
• Maine (2004; see note below)
• Maryland (future)
• Massachusetts (future)
• Minnesota (1990)
• Missouri (1988)
• Montana (1989)
• Nebraska (1994)
• New Hampshire (1995)
• New Jersey (future)
• New Mexico (1996)
• North Carolina (2006)
• North Dakota (2004)
• Oklahoma (2006)
• Oregon (1988)
• Pennsylvania (2002)
• Rhode Island (1988)
• South Carolina (2002)
• South Dakota (1990)
• Tennessee (2004)
• Texas (Rumored)
• U.S. Virgin Islands (2002)
• Vermont (2003)
• Washington (future)
• West Virginia (1988)
• Wisconsin (1989)

Powerball jurisdictions that joined MUSL before April 1992 also participated in Lotto*America.

Maine joined MUSL in 1990, dropping out when Powerball began; it did not rejoin MUSL until summer 2004.

The minimum age to play Powerball is 18, except in Nebraska, where it is 19, and in Arizona, Iowa, and Louisiana, where it is 21.

Powerball winnings are exempt from local income taxes in Delaware, Pennsylvania, South Dakota, and the District of Columbia. There is no state income tax in Florida or South Dakota, and only on interest and dividends in New Hampshire and Tennessee. . Winnings from tickets purchased across state lines may be subject to tax from the location of purchase (with possible credit for taxes paid to one's own jurisdiction, or vice versa).

Georgia, in August 1996, joined the then-new The Big Game (now Mega Millions), the other major US lottery group. It planned to sell tickets for both games for the remainder of that year; however, within a few days, Georgia was forcibly removed from MUSL, and has not returned. (The agreement between Mega Millions and MUSL allows all US lotteries, including Georgia's, to offer both games.)

In 1998, Florida was given permission by its government to participate in a multi-state game. It was set to offer Powerball; however, in early 1999, the new governor, Jeb Bush, prevented Florida from joining, since he believed Powerball would hurt the existing Florida Lottery games. In 2008 Gov. Charlie Crist reversed the policy and Florida joined MUSL in 2009. Lotto and Lotto Plus sales immediately tumbled forcing the Florida Lottery to terminate Lotto Plus in October 2009. In its place the Florida Lottery introduced Lotto Xtra, which is nearly identical to PowerPlay.

California had no intention of offering Powerball; however, it joined MUSL in hopes of offering an "international" lottery game that did not come to fruition. It joined Mega Millions in 2005.

The Arkansas Scholarship Lottery began to sell Powerball tickets on October 31, 2009 .

In October 2009, MUSL accepted the Massachusetts Lottery request to join Powerball . As Massachusetts already sells Mega Millions tickets, this would make it one of the first to sell both major lottery games. The Maryland Lottery, another Mega Millions member, has also reached a similar agreement with MUSL to sell Powerball .

Some MUSL members have requested to join Mega Millions; likewise, some lotteries with Mega Millions have shown interest in adding Powerball. In March 2009, it was reported that New Jersey, already a Mega Millions member, would seek permission to join Powerball. Shortly after New Jersey announced its desire to sell both games, discussions were revealed about possibly allowing each U.S. lottery to sell tickets for both Mega Millions and Powerball. [3] On October 13, 2009 the "Mega Millions consortium and Multi-State Lottery Association (MUSL) have reached an agreement in principle to cross-sell Mega Millions and Powerball in all U.S. lottery jurisdictions", possibly as early as 2010.Georgia is now eligible to join Powerball again without losing Mega Millions.

Powerball becoming a worldwide lottery game?

MUSL has begun preliminary discussions with European lotteries, such as United Kingdom's Camelot, regarding a potential global lottery game that would feature jackpots of £250 million. One possibility is Powerball combining with EuroMillions. The proposed game would begin in 2011.

Licensed products

In 2006 WMS Gaming released a range of slot machines under the Powerball brand name.

Windows Sidebar Gadgets

In 2007 the Oregon Lottery released a new Windows Vista Sidebar gadget which relays the winning numbers for Powerball in live time. The gadget also provides large jackpot announcements.

In November 2007, the Lottery Post website released the Lottery Results Gadget for Windows Vista, providing near real-time winning numbers for Powerball, in addition to results for every other lottery game offered in each state. Likewise, new jackpots are pushed to the Windows Sidebar gadget after they are announced.

External links

• Official Powerball site
• Map of Jackpot Winning Locations - Check on the map where the Jackpot winning tickets were sold (since 2003)