DES MOINES, Iowa — The cost of buying a Mega Millions jackpot dream will soon more than double, but lottery officials said they are confident players won’t mind paying more after changes that will lead to higher prices and more often winners.
Lottery officials announced Monday that starting in April, it will cost $5 to play Mega Millions, up from the current $2 per ticket. The price increase will be one of several changes officials say Mega Millions will bring improved jackpot oddsmore frequent huge prizes and even bigger payouts.
“Spending five dollars to become a millionaire or billionaire is pretty good,” said Joshua Johnston, director of the Washington Lottery and chief executive of the group that oversees Mega Millions.
Mega Millions and its lottery compatriot Powerball are sold in 45 statesas well as Washington, DC and the US Virgin Islands. Powerball is also sold in Puerto Rico.
Powerball officials said they have no plans to change that game’s odds or the $2 price for most tickets.
Mega Millions’ hope is that by increasing ticket revenue and changing the odds (now set at 1 in 302.6 million) to something less stratospheric, more people will win jackpots even if the prizes become extraordinarily high, some more players attracts. The aim is to increase revenues and provide more money to state lotteries, which in turn spend it on a variety of government services.
Mega Millions will be introducing changes at a time when fewer people are buying tickets and the jackpots have to reach higher and higher numbers before sporadic players take notice and choose to buy a ticket or two. Where a $500 million jackpot once caused queues at the supermarket, top prizes of $1 billion now often attract a more muted reaction.
Those much-hyped jackpot numbers can also take a beating as interest rates fall. That’s because state lotteries on billboards or other advertisements emphasize the annuity payout for jackpots, spread over decades from an investment fund. Because interest rates have been high, annuity jackpots have more than doubled the cash prizes that winners almost always choose.
With interest rates expected to drop, the annuity jackpot figures will drop so the advertised jackpot won’t seem as large.
Johnston said expected rate cuts were not a factor in the coming changes.
The biggest motivation was to differentiate Mega Millions from Powerball and attract customers who could now pass on both games, Johnston said.
More than doubling the ticket price is a big step, but Johnston said research shows people feel comfortable spending at least $5 when they buy scratch-off tickets or take a chance on drawing games like Mega Millions. It is the second price increase since the game was created in 2002.
“You pay five dollars for your Starbucks,” Johnston noted.
Lottery officials will announce more details about the changes in the coming months, he said.
