The 1st ever lotto add-on: Are You Insured?

"Are you in good hands?";"Nationwide is on your side"; "Did the little piggy cry wee-wee-wee all the way home?"; and other insurance slogans. Though for the purposes of this article, insurance is not a contract one signs entitling them to money if things go wrong with their car, provided they pay their premiums. Rather, it's what the Rhode Island Lottery called the first add-on to a lotto game in America; introduced in Februrary 1981 as a part of their 4/40 Jackpot game. 4/40 Jackpot was itself a pioneer of sorts, a true rarity at the time: a computerized jackpot game. As far as I know, New Jersey's Pick-6 Lotto was the only other game of that kind in 1981 (New York's Lotto, I believe, was only partially computerized at the time).

Anyway, back to this add-on: the "insurance" feature. You see, 4/40 Jackpot tickets were, like pretty much every lottery game back then, $1 apiece. There was a bit of a catch to this game, though; if you bought a one dollar 4/40 ticket and did not match all four numbers, you won nothing! Zilch! Notta! Goose Eggs! All of the prize money raised from a $1 ticket went to the jackpot, leaving nothing for smaller prizes like most games. Presumbably realizing a backlash against a game with so few prize winners, those in control added something called "insurance", an extra dollar bet one made to give them a shot at smaller prizes; and while it didn't insure a win as the name suggested, it still helped out your odds quite a bit. Quite simply, plunking down an extra dollar gave you chance to win two additional prizes: $300 for matching 3 out of 4; and a free ticket (with insurance) for matching two. So, to recap: $1 buys you a chance at the jackpot; but you need another dollar to qualify for the other two prizes. Quite frankly, this all sounds like a bait and switch. It's almost like a car dealer selling you a car, only to tell you you have to buy the engine and tires separately.

Players didn't mind though; the game was successful and like most successful lotto games, they started adding numbers to make it harder to win. 4/40 Jackpot became 4/47 Jackpot in August 1983; in doing so raising the 3 of 4 insurance prize to $447, and adding a feature that turns the jackpot into an annuity if the jackpot reached $200,000. That in turn was replaced by Lot-O-Bucks in 1985; a 5/40 which kept both the insurance and annuity rule. The latter rule was a big reason why Lot-O-Bucks frequently had jackpots around $1,000,000. As for the insurance feature, it was still required to win non-jackpot prizes: four numbers won $450, three won $20, two still won a free ticket with insurance.

Lot-O-Bucks would run unchanged for another decade; then in 1995 it was replaced with a 5/30 called Rhody Cash, and unlike the games that came before it, you didn't need an extra dollar to win smaller prizes. The era of "insurance" was over; an era that no other state experienced. It could be said though that "insurance" would pave the way for the add-ons like Power Play and Megaplier we see today. You don't have to buy those add-ons in order to win a smaller prize (like you once did in Rhode Island), but it does increase those smaller prizes. You could say that they're spiritual successors to "insurance", successors that don't quite make you feel like a sucker.

Bonus: here are some newspaper ads heralding the 4/40 and 4/47 games upon their release. Look how big a deal they make quick-picks and multi-draws. Retroriffic! Warning: Big Files!

New England Lucky For Life changes. Everybody loves a (near) winner.

It been a little more than a year since Lucky For Life launched, the realization of a decades-long push for a New England-wide lottery game (beginning with talks of pushing Tri-State Megabucks into CT, MA, and RI in the 80's). It seems to be reasonably popular, I saw a few LfL tickets being bought when I was in Providence a while back; and there's already plans for a second New England game (possibly a merger of Tri-State Megabucks, Mass. Megabucks, and CT Lotto).

In the meantime, changes are afoot for the young game, with those changes coming on line September 17th. The game will have three more balls in the white ball field, and twenty-two more lucky balls; giving the game 43 numbers in each field. As a result, the game is about to get harder to win; overall odds being increased modestly to about 1 in 8, but top prize odds going up almost threefold to about 1 in 41 million (up from about 1 in 14 mil).

What are these changes for? Bigger lower tier prizes? Maybe $1,000,000/year for life? Odds like this could support such a prize.

No, that'd be too obvious. All of these extra numbers are being added for big increases to the second prize. That's right, not the lower tier prizes, not the jackpot, the second prize. It will go up from $25,000 cash, to $25,000 cash per year for life. A few other prizes are getting modest increases to compensate for the longer odds (new prize amounts are underlined):

Match	Prize	Odds
Match 5+1	$7,000/week/life	1:41,391,714
Match 5+0	$25,000/year/life	1:985,517
Match 4+1	$3,000 (from $2K)	1:217,851.13
Match 4+0	$150 (from $100)	1:5,186.93
Match 3+1	$100 (up from $50)	1:5,887.87
Match 3+0	$10	1:140.19
Match 2+1	$20 (up from $15)	1:490.66
Match 2+0	$2	1:11.68
Match 1+1	$5	1:112.15
Match 0+1	$4	1:82.46
Overall Odds: 1 in 8.607

Yeah, that second prize is getting a big boost; but very few other prizes are going up that much. The top prize and four of the bottom five prizes aren't going up at all. The prize for matching just the Lucky Ball is staying pat at $4, despite being twice as hard to win; and as I mentioned before winning the grand-a-day-for-life is getting almost three times harder to win. You can see just how much emphasis is being put on this new runner-up prize by comparing the percentages of sales that go towards each prize:

Prize Level	Old	New
Match 5+1	27.81%	10.27%
Match 5+0	1.81%	27.90%
Match 4+1	1.27%	0.69%
Match 4+0	1.27%	1.45%
Match 3+1	1.08%	0.85%
Match 3+0	4.31%	3.57%
Match 2+1	3.55%	2.04%
Match 2+0	9.47%	8.56%
Match 1+1	4.74%	2.23%
Match 0+1	4.7%	2.43%

If you're not good with numbers, let me break that down. Nearly half of the prize pool (60% of sales) is going to the second prize. Second prizes have usually been the most neglected when it comes to dividing the take. Powerball turned that around last year by putting almost a fifth of the prize pool into the $1,000,000 second prize. That may not be as much of the pool as the jackpot gets, but it's way more than the other prizes get. LfL has now decided that even the top prize should take a back seat to the second prize; and about that prize, $25,000 per year is not that much money, especially after Uncle Sam gets his cut. They sacrificed every other prize category so they could do this. Granted, you can get a lump-sum in this version which you couldn't before; but that's doesn't help much because despite increased odds, the other prizes are pretty much staying where they are. Solid A game, about to go down a whole letter grade. I give this new LfL is a B-.