The Margin: Lottery expert: Here are possible reasons for the Powerball problems


What went wrong with Powerball?

It’s the question a lot of people have been asking after the results of Monday’s drawing, with a record $2 billion jackpot, were delayed by 10 hours because of what was described as a security-protocol issue. Officials with the Multi-State Lottery Association, the organization behind Powerball, finally revealed the winning numbers on Tuesday morning and later announced that a single ticket-holder in California had won the jackpot.

To get a better understanding of the situation, MarketWatch spoke with Peter Sullivan, founder and chief executive of Jackpocket, a lottery app that allows players to purchase tickets for Powerball and other games in select states where such sales are permitted. He offered some clues as to what may have happened and to what it could mean for lottery sales going forward. 

What could have led to the problem

Officials with the Multi-State Lottery State Association said the delay was “due to a participating lottery needing extra time to complete the required security protocols. Powerball has strict security requirements that must be met by all 48 lotteries before a drawing can occur.” (There are 45 states that participate in Powerball, plus Washington, D.C., the U.S. Virgin Islands and Puerto Rico.)

As Sullivan explained, in Powerball, each participating lottery reports sales into a central system and everything must be perfectly aligned. Meaning when a jurisdiction reports a ticket sold with a specific combination of numbers, the central system must show the same. Any discrepancy can cause a delay.

Sullivan can’t say for certain, but he thinks the sheer volume of sales leading up to the drawing increased the chances for that kind of discrepancy to occur. At the very least, Sullivan said, “It didn’t make it simpler.”

Any other possible culprits?

Adding to the complexity of the Powerball system and the potential for problems, Sullivan said, is that three different companies help operate the individual jurisdiction lotteries. In other words, it’s not quite done the same way across the board among jurisdictions. And some jurisdictions add online sales into the mix — yet another layer of complexity. 

Let’s also not forget that Powerball added a weekly Monday drawing last year — previously, the game was held only on Wednesday and Saturday. And that means the Monday drawing happens just two days after the previous drawing. The close timing can add to the logistical issues, Sullivan said.

But the system usually works, yes?

Generally speaking, things run smoothly. Though as Sullivan and others have pointed out, there have been delays in the past — most recently with a drawing on Oct. 19. 

How will the situation affect lottery sales in the long term?

Sullivan said it’s possible the 10-hour delay could cause some people to lose faith in lotteries. In turn, that could have a negative impact on sales going forward. “We live in a world where conspiracy theories run wild,” he said. 

At the same time, Sullivan said the fact that lottery officials took the time to fix the issue, even knowing the uproar the delay would create, speaks to how carefully they manage things. After all, it would be much worse if a drawing was held and a problem was discovered after the fact. Lottery officials “wanted to make sure they didn’t screw this up,” Sullivan said.

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