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‘Jackpot fatigue’ cutting lottery ticket sales, shrinking prize amounts

Recent changes will make it tougher for prize pools to grow to larger-than-life amounts

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Top states for buying lotto tickets

Here are the top five states for lottery spending, according to the 24/7 Wall Street analysis.

Mega-sized lottery jackpots may be a thing of the past – at least for now – as falling ticket sales combined with recent changes make sky-high prize pot growth less likely.

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Mega Millions ticket sales have been declining since a $1.5 billion jackpot was hit two years ago – falling 40% in the 12 months that followed, according to Gordon Medenica, lead director of the Mega Millions Consortium and director of Maryland Lottery and Gaming.

“Sales are down another 10% this year, which we attribute to general ‘jackpot fatigue,’” Medenica said. “Importantly, ‘media fatigue’ is also a factor, as the games don’t receive the publicity and general media coverage they once did.”

Since October 2018, when the game saw nearly $2 billion in monthly sales, sales have not surpassed $409 million – and were at $197 million in September.

A spokesperson for the Powerball Product Group said that while sales this year have rebounded from March, they are still 20% below pre-pandemic levels.

Not only do declining sales means overall jackpots will be lower, but recent changes made to minimum starting amounts mean smaller prize pots, too.

Both Powerball and Mega Millions announced during the coronavirus pandemic that they would no longer reset to a minimum prize pool amount following a jackpot, instead amounts would be based on game sales and interest rates.

Both also did away with minimum increases between drawings where there is no winner.

Those changes were made to ensure that games sales would be enough to support jackpot sizes and lower cash prize amounts.

“Many states and cities have asked their residents to stay at home, which has affected normal consumer behaviors and the reduced sales of both games,” according to game officials. “In response to the public health crisis, interest rates have been reduced. As a result, more sales are necessary to fund comparable jackpot amounts.”

Medenica said the Mega Million Consortium is reviewing the effects of changes made to the minimum during the pandemic.

Tuesday’s Mega Millions jackpot is $86 million, while Wednesday’s Powerball jackpot is $91 million.

Recent changes will make it tougher for prize pools to grow to larger-than-life amounts.

Lotteries see decline in ticket sales

By comparison, 2019 was a record year for lottery organizations across the country, with billion dollar jackpots in games like Powerball and Mega Millions. In 2020, though, those big winnings took a dramatic turn.

“For us, we were hit pretty hard. We offer video lottery at bars and restaurants throughout the state and by far that’s our highest revenue product and literally overnight when bars and restaurants shut down, that revenue line went to zero,” said Matt Shelby with Oregon Lottery.

Shelby says they were shut down for more than a month. Oregon normally brings in $20 million a week on video lottery games and it goes to some crucial state programs.

“Things like schools, parks, natural resources, watershed development, most recently veterans’ services and then we also fund problem gambling and treatment across the state. When our revenue goes down, we feel it first because we operate like any other business, but those state programs that rely on our dollars will feel that crunch in the next budget cycle,” said Shelby.

In Vermont, government-mandated shut downs prompted lottery ticket sales to plummet by about 30 percent. All of that money goes to fund education.

Gary Kessler, the Deputy Commissioner of Liquor and Lottery for the State of Vermont, says they’re now encouraging people to buy lottery tickets in advance to help boost sales.

Kessler said, “they could buy them out 20 draws in advance. So, they could be safe and stay in the game at the same time. That was really our message that we tried to get out to our players and players really did respond. We saw quite an increase in our subscription services, which is where you can buy for six months or for an entire year and know that those numbers are set.”

While most lottery departments have been established for decades, that’s not the case in Mississippi.

“We hadn’t been up and running for a year. We’re still in the building process and we have layers to complete. When COVID-19 hit we had about half of a business continuity plan and it hadn’t been completed,” said Mississippi Lottery President Tom Shaheen.

While the Mississippi Lottery saw an initial drop in sales, in April things started to pick back up. Mississippi Lottery was still able to contribute more than $71 million to projects in its first seven months of operation.

“It helps fund roads, bridges and education, which was set by the legislature in the Lottery Act and approved by the Governor,” said Shaheen.

And while lottery officials across the country understand the current economy may keep some from buying lottery tickets, they hope the programs the lotteries fund aren’t impacted too severely. After all, the local businesses that sell lottery tickets benefit, as well. They receive a percentage of winnings and even a jackpot of their own if they sell a winning ticket.

Oregon Lottery thinks lotteries will recover just fine.

“I think long term we will, but like a lot of other things, I don’t think we’re ever going back to the way things were in January,” said Shelby.

By comparison, 2019 was a record year for lottery organizations across the country, with billion dollar jackpots in games like Powerball and Mega Millions. In 2020, though, those big winnings took a dramatic turn. ]]>