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Powerball generates excitement, but will it bring California cash?

April 08, 2013|By Matt Stevens and Kate Mather

Last November, America got Powerball fever and California felt left out.

The jackpot for the multi-state game had reached $587.5-million and ticket sales skyrocketed. But California was one of only eight states without Powerball, forcing residents to ask relatives in other states to buy them tickets or even drive to the Arizona border.

On Monday, Powerball finally came to California, and with long lines. Powerball is the lottery’s first new game in nearly a decade, and at $2 a pop is also the most expensive jackpot to enter. Officials are hoping Powerball can do for California what the game has done elsewhere: Generate more excitement around the lottery and attract a new generation of players.

Powerball marks a further effort by the lottery to go beyond Scratchers to larger games with much higher jackpots. Last year, the state lottery got a taste of possibilities when its Mega Millions multi-state game grew to a $656-million pot. That game alone added $300 million in sales for the lottery over a two-month period, resulting in a 27% increase in total revenues for the year.

Powerball is even larger than Mega Millions, with a starting jackpot that is more than three times as large. The games are similar – requiring players to match up to six “winning” numbers – and the odds of hitting the jackpot in each of the games are almost exactly the same: 1 in about 175 million.

“It sounds ridiculous to say, but if the jackpot is $56 million, it just doesn’t motivate people the way a $656 million jackpot does,” said Alex Traverso, a spokesman for the lottery.

The typical lottery player is loyal and plays as part of a routine. With their huge jackpots that generate news and online buzz, Powerball and Mega Millions can draw both lottery regulars as well as huge numbers of people who rarely play.

Lottery revenues flattened at the start of the recession. But last year, sales jumped from $3.4 billion to $4.4 billion, with much of the increase due to new customers who came for that $656 million jackpot. The lottery sent $1.2 billion of that revenue to California schools, as is required by law.

The arrival of Powerball in California came with an $8.4-million marketing campaign and even “launch events” at The Grove in Los Angeles and the Embarcadero Center in San Francisco. But it also sparked new criticism from those who believe the government should not be in the gambling business.

While Powerball generates bigger jackpots, critics say multi-state lotteries are even harder to win. They also expressed concern about the $2-per-ticket price, which requires players to fork over double the money compared with Mega Millions.

Upping the odds

Powerball becomes the latest lottery game to play in California. How it compares:

Powerball Mega Millions SuperLotto Plus Odds of winning top prize 1 in 175,223,510 1 in 175,711,536 1 in 41,416,353 Odds of winning any prize 1 in 31.85 1 in 39.89 1 in 23 Drawing days Wed., Sat. Tues., Fri. Wed., Sat. Minimum ticket prize $2 $1 $1 Participating locations 43 states, plus D.C.
and Virgin Islands 42 states, plus D.C.
and Virgin Islands California only Minimum jackpot $40 million $12 million $7 million Lottery ticket sales

Sources: California Lottery, Powerball, Mega Millions. Note: Lottery ticket sales chart for fiscal years.

Graphics reporting by Scott J. Wilson

“Expanding the lottery is bad for individuals,” said the Rev. James B. Butler of the California Coalition Against Gambling Expansion, adding that many of the customers are lower-income people looking to hit it big. “It will exploit those who can afford it least.”

Still, registers rang nearly nonstop Monday at Bluebird Liquor, a Hawthorne store considered a hot spot by lottery regulars. “Powerball to the people,” read the headline of one of the newspapers sold outside.
The store began selling Powerball tickets at 7 a.m. and by noon, employee Eduardo Duran said, about 8,000 had been purchased. “As far as business, you can see it’s good,” he said, gesturing to a line that snaked out the door.

As Duran and two others tried to help customers quickly, the phone rang. “Thank you for calling the lucky Bluebird,” Duran answered.

A woman asked how long the wait was to buy a ticket.

“All day,” Duran told her. “We’re going to have a line all day.”

John Apodaca, 62, of Hawthorne, was part of that line. The veteran said that after he returned from Vietnam, a woman read his palm and said he would be a rich man – which is why he goes to the store every day at the same time and plays the same numbers. He’s there so often that Duran welcomed him with a salute.

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