U.S. lottery jackpots used to never reach $1 billion. They’ve done it 12 times in the last 5 years

Powerball play slips are seen Friday, Aug. 29, 2025, in Nashville, Tenn. (AP Photo/George Walker IV)

Wednesday night’s Powerball drawing went without a jackpot winner, pushing the top prize to an estimated US$1 billion for Saturday. It’s the second largest of this year, lagging only the $1.787 billion Powerball jackpot in September, claimed by two winners in Missouri and Texas.

If it seems like jackpots have been getting larger over the past few years, they have. The first U.S. lottery jackpot over $1 billion came in 2016, when winners in Florida, California and Tennessee split a $1.586 billion Powerball prize. The current Powerball jackpot will be the 14th ever top US lottery prize of at least $1 billion, and the 12th since January 2021.

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Powerball and Mega Millions, the two largest lottery games in the United States, have been trying to garner larger jackpots. Here’s how:

Higher ticket prices

Powerball and Mega Millions ticket prices have crept up over the last 13 years. A portion of sales goes to the prize pool, and the jackpot rolls over to subsequent drawings – and grows with additional sales – until it is won. Higher prices naturally lead to higher jackpots.

Powerball tickets rose in price in 2012 from $1 to $2, where they have remained since.

Mega Millions hiked up prices twice in its history. In 2017, the game followed Powerball in raising prices from $1 to $2, but this year its tickets jumped to $5. It’s part of a greater effort that ensures larger and faster-growing jackpots, according to Mega Millions.

Changing the odds

The odds for winning the jackpot have always been steep, but they’ve gotten intentionally steeper in the last decade.

To win a Powerball jackpot, a ticket holder must match all six drawn balls – five white and one red. In 2015, Powerball changed its prize odds by increasing the number range for its white balls and decreasing the range for the red ones.

What that did was improve the odds of winning any prize, including those as low as $4, but worsened the odds of winning the jackpot from 1 in 175.2 million to 1 in 292.2 million.

“Mathematically, by changing the number of balls you draw and the number of balls you draw from, you can create a lottery with any odds you want, essentially,” Victor Matheson, professor of economics at the College of the Holy Cross, said Thursday.

Lotteries have used steeper odds as part of a strategy to drive jackpots higher. Jackpots that are won less often will roll over more often.

“Basically, the lottery associations figured out that no one buys a Powerball ticket to win $10. No one buys a Powerball ticket to win $100. They buy a Powerball ticket to become a billionaire,” Matheson said. “So … more of the money going into large jackpots, which means, again, the jackpot grows more quickly.”

Mega Millions lengthened its odds of a jackpot win in 2017 from 1 in 258.9 million to 1 in 302.6 million. Like Powerball, it did so by changing the ranges of its drawing numbers.

This year, Mega Millions slightly improved the odds of winning the jackpot to 1 in 290.5 million. But that coincided with the change in ticket price from $2 to $5.

Higher interest rates

Interest rates also impact how large jackpots are advertised to amass.

There are two ways that Powerball or Mega Millions jackpot winners can take their payout: an annuitized prize of 30 yearly payments that increase over time, or an immediate lump sum.

The jackpot that the lotteries publicize most prominently is the annuitized prize – in Saturday’s case, an estimated $1 billion. For those who want a lump sum? That is always smaller. Saturday’s lump sum is an estimated $461.3 million.

The annuitized plan takes interest rates into account, allowing the lottery association to invest the money and promising larger returns in the future, Matheson said.

And on the whole, interest rates have been higher in recent years. The Federal Reserve raised its benchmark rate from 2022 to 2023. That has been dropping since last year, but it still is above where it was in early 2022. Higher interest rates allow for higher annuitized jackpot prizes.

Lotteries take that annuitized figure and run with it in advertising, despite it not being what most people choose to walk home with.

“Everyone always takes the (lump sum) cash in Powerball and in Mega Millions,” Matheson said.

Expanding the games nearly nationwide

For years, Powerball and Mega Millions were available only in different sets of states, meaning people would have to cross state lines to buy tickets for certain games. Only 12 states carried Mega Millions before a 2010 deal between the two games, which allowed participating states to sell both.

Mega Millions and Powerball are now available in nearly all states, as well as in Washington, DC, and the US Virgin Islands, according to the Multi-State Lottery Association.

But there are some outliers: Alabama, Alaska, Nevada, Hawaii and Utah don’t have lotteries, and Puerto Rico offers Powerball but not Mega Millions.

Letting more people play allowed for larger cash prizes to accumulate, and it didn’t take long for this to happen. In 2012, Mega Millions had its biggest jackpot at the time: $656 million, split between three winners who bought tickets in Kansas, Illinois and Maryland.

Saturday’s Powerball drawing will take place at 10:59 p.m. ET.

By Toni Odejimi, CNN