Why huge Mega Millions jackpots are more common now
Huge winnings – $2.04 billion, $1.337 billion! — make for captivating headlines. However, despite the fact that the word "jackpot" could suggest a bank account full of money just waiting for a lucky winner, this is not the case.
The prizes for lotteries are based on annuities, which are based on interest rates.
Two of the biggest lottery jackpots ever were won in 2022, which can be attributed in part to the rise in interest rates. But other elements are also in play.
Three significant changes to lotteries over the last ten years have decreased the rarity of mega-jackpots.
Lotteries capitalise on people's capacity for grandiose dreams. However, humans are adept at generating a gut-level understanding of how likely risks and rewards are based on their own experience.
A large jackpot alters the population, luring ticket buyers from a variety of socioeconomic backgrounds.
This has the effect of making lotteries with huge jackpots "a more progressive lottery ticket option than most of the things that we generally see being marketed by lotteries," according to Matheson.
In comparison to a Mega Millions ticket with a huge jackpot, "the excitement really isn't there, and the thinking about what you would do [if you won] isn't there with a scratch-off ticket."