New Powerball system means more billion-dollar jackpots are coming

Plagued by Powerball fever economist buys lottery ticket    8:32 AM ET Thu, 14 Jan 2016 | 01:56

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• 01:56

  Plagued by Powerball fever economist buys lottery ticket   

  8:32 AM ET Thu, 14 Jan 2016
• 00:28

  Powerball winners in Calif., Florida, Tennessee   

  12:19 PM ET Thu, 14 Jan 2016
• 01:42

  At least 3 Powerball winners share jackpot   

  7:28 AM ET Thu, 14 Jan 2016

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OK, so you didn't win the massive Powerball. Don't worry. The $1.5 billion dollar jackpot wasn't a fluke.

Here are the three things to know:
1) Powerball had been losing a lot of money, so they juiced up the game to make it harder to win.
2) That's what makes it possible for a billion-dollar jackpot to happen.
3) More billions are coming; it's a matter of math and being patient.

Changes made to the Powerball system late last year increased the likelihood of bigger payouts. At the same time, your chances of winning the jackpot declined — from 1 in 175,223,510 to 1 in 292,201,338. So it's less likely that you'll score the big money, but if you do you'll get a whole lot more.

Before October, there were only 59 choices for the white balls. And then they added 10 more, giving a full 69 choices. That's why it's harder to win everything.

And that's why these jackpots will keep getting bigger and bigger. It's exactly what the bosses wanted, and it's exactly what they are getting. This isn't a fluke or an accident, but a desired effect of design.

But the organization's customer research told them that people wanted to at least have a better chance of winning something. That's why they reduced the number of red "powerballs" — down to 26 from 35. That makes it easier to win some smaller prize, even if it's just $4.

The odds of winning different levels of prizes adjusted accordingly:

In case you missed it: Powerball works by randomly selecting five white balls from a bin and one red ball from a separate bin. If the numbers on your $2 ticket matches all six numbers drawn, you get a lot of money. How much money is exactly the issue. The minimum jackpot is $40 million. And it goes up from there when nobody wins.

Most people don't play when jackpots are that relatively small. As we saw in the past few weeks, ordinary people get hyped up about billion-dollar prizes, but for typical numbers under $300 million, there just isn't a lot of interest.

A lot of the money in the lottery comes from the hype surrounding (what used to be considered) a big jackpot drawing. Before the media flurry this week, "Powerball" was Googled most in October 2012, when the jackpot reached $587 million.

But run-of-the-mill $20 million jackpots don't generate headlines. It's what almost killed the game. Revenues were down a ton and that's why they made the change.

Powerball revenues had dropped a long way in the last two years. But this one jackpot alone brought in as much money as a typical fiscal year. More jackpots like this, and the game will be a consistent winner for their state governments.

What it means for you: Keep waiting and you'll see more billions in the future.

Since you may not have any winnings to count, here's something to consider with your free time: Will this event start a jackpot bubble, where people get less and less interested in jackpots unless they are bigger and bigger, like $2 billion and $3 billion? Powerball has changed its game several times before. This probably won't be the last time it makes an adjustment.