MegaMillions and Powerball may join forces for national lottery

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Do you think that your state runs its lottery? If so, guess again: Most of America's lotteries are run by either Mega Millions or the Multi-State Lottery Association (known as MUSL), two massive non-profits that control games in 44 states and territories.

Now these two behemoths are talking about joining forces to create a national lottery -- a move that can be both a boon and a bane to avid players.

Mega Millions, which was originally known as "The Big Game," operates in twelve states and, on March 6, 2007, two of its players split a $390 million jackpot, the largest in North American history. The company gives 35 percent of ticket revenue to the state where each ticket is purchased. Fifty percent of revenue goes to prizes, and the remaining 15 percent covers the company's operating expenses and commissions to ticket sellers.
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While MUSL's biggest jackpot was $365 million, $15 million less than Mega Millions', it is a much larger organization. The lottery company, which is based in Iowa, operates in 30 states, as well as the District of Columbia and the U.S. Virgin Islands. Its most popular program is Powerball, but it offers a variety of games, including Hot Lotto, Wildcard 2, and Ca$hola. Since 2007, it has even offered a multi-state scratch game, Midwest Millions. Like Mega Millions, MUSL pays out half its revenues in prizes; the other half, however, goes directly to the member states. MUSL gets its operating income from earnings on its lottery accounts, bond swaps, and licensing fees.

On Tuesday, these two behemoths announced their plans to cross-sell their tickets. This move, which they hope to launch in early 2010, would enable players in 44 states or territories to play either game, and could provide a major boost to both sales and jackpots. To put it another way, a player in Arizona, which currently has only Powerball, could buy tickets for both Powerball and Mega Millions.

The two companies are also working together to create a national lottery, which would cover the same 44 states. Launching as early as fall 2010, tickets would probably be in the $2 to $5 price range, and the game would be independent of the Powerball and MegaMillions cross-selling program.

And if a national lottery isn't impressive enough, MUSL is also working with Camelot, a British lottery company, to set up a worldwide lottery. Carrying payouts along the lines of £250 million, or over $394 million, the game would have a weekly draw, and unclaimed jackpots would roll over to create world-record jackpots. Like America's regional lotteries, much of the money raised by the world lotto would help fund schools, highways, or other public programs. While many details of the world lotto program still need to be ironed out, Camelot is hoping to launch it as soon as 2011.

If MUSL and Mega Millions work together to set up a single national lottery, they will likely be able to massively increase their jackpots. What they are less likely to increase is the chance of winning. As the popular comparison states, you have a much greater (almost seven times greater, to be exact) chance of being struck by lightning. However, to offer a few more colorful examples, you are 18 times more likely to be killed by flesh-eating bacteria than to win the lottery, and 288 times more likely to be legally executed. On the other hand, you are probably five percent less likely to be elected President.

Gotta say, I like those odds.

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