For years, winning the lottery had become the new American dream. Paying $2 for a lottery ticket and winning untold millions of dollars just has a lot more allure than a lifetime of hard work. Yet, the recession is crushing the lottery along with everything else. Buying a lottery ticket may have become a luxury expense, now that over 26 million American workers have filed for unemployment in the past month or so.

The current Mega Millions drawing for Friday, April 24, is up at $174 million jackpot and prize payout in its annuity value. That is still empire-building money, but it could be quite some time before a lottery pot is this high again. The lottery jackpot process has undergone some serious changes that could act to lower some of those previous pools that had been well into the hundreds of millions of dollars.

Lottery players hoping to become lottery winners had been excited about playing the lottery for years and years. After all, jackpots in the hundreds of millions of dollars became very enticing to the public. So what if the odds of winning the lottery are lower than being struck by lightning on a sunny day. Now there have been changes made for the Mega Millions and Powerball lotteries.

The two groups did not say they were losing their shirts based on the old rules, but it’s obvious that lottery sales have plummeted now that people are clenching every dollar they can. The changes also may have an impact on lump sum payments.

Both the Mega Millions and the Powerball lotteries have changed how they are calculating the initial jackpots. The chance of winning is still rather low, but the two have also announced changes to the incremental jackpot gains each time the lottery drawings produce no jackpot winner(s).

Before the recession and massive job losses started hurting lottery sales, the Mega Millions jackpot started out at $40 million. The minimum increase was $5 million for each roll, if there was no jackpot winner, but those increments could rise depending on how many of the $2 lotto tickets were acquired. That’s history for now.

Looking ahead, the new method for the starting Mega Millions jackpots and the rate at which the jackpot increases for Mega Millions will be established based on game sales and interest rates. There also will be no fixed minimum amount, and the level will be determined and announced ahead of each drawing.

You can directly blame the recession for this. That’s what the Mega Millions announcement did, even noting that typical lottery sales patterns already have been altered due to so many people staying at home. An April 3 announcement specified:

The Mega Millions Consortium has adjusted the game’s starting jackpot and will determine the amounts of subsequent starting jackpots and jackpot increases on a drawing-by-drawing basis.  The changes are in direct response to slowing sales during the current global pandemic.

America’s next Powerball lottery drawing is set for Saturday, April 25, and that jackpot is currently $37 million. Powerball also has said that game sales and interest rates would determine the advertised jackpot amounts going forward. The old guaranteed starting jackpot amount and minimum jackpot increases have been eliminated.

Earlier in April, the Powerball Product Group indicated that future jackpot increases will be determined and announced prior to each drawing. Powerball jackpots had previously started with a $40 million annuity value, and if no winner was announced then the jackpot would roll up by a minimum of $10 million for each successive drawing. Even before announcing the formal changes based on participation, the starting jackpot had been reduced to a $20 million annuity value with minimum jackpot increases of $2 million between drawings.

The new changes are likely to create even less excitement and interest at the start of each lottery. The Powerball announcement on April 2 said:

These changes are necessary to ensure that ticket sales can support the Powerball jackpot and other lower-tier cash prizes. Our number one priority is making sure that the Powerball game can continue to assist lotteries in raising proceeds for their beneficiaries… Since last week, more states and cities have asked their residents to stay at home, which has affected normal consumer behaviors and Powerball game sales. In response to the public health crisis, interest rates have declined. As a result, additional game sales are necessary to fund comparable jackpot amounts.

24/7 Wall St. has covered many aspects of the lottery over the years. In particular, the 12 things not to do if you win the lottery has been the biggest focus.

It seemed like nothing could kill the “new American dream.” The COVID-19 recession and stay-at-home orders changed all that, and the current economic pain might make all those $300 million and $500 million jackpot winnings seem as far away as the Dow at 30,000 in the stock market.

Winning the lottery, of course, still will always appeal to the public. Yet, it seems rather obvious that lotto ticket buyers will be much less excited about buying lotto tickets if they don’t know the size of a jackpot or if the increments are much lower. Of course, the winners still get to pay taxes and have to try to avoid catching the coronavirus just like everyone else.

It also has become much harder for the public to buy up endless amounts of $2 lotto tickets if they are unemployed or worried that they will be unemployed very soon.

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