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Lotto Max Jackpot Progression and Bonus Jackpots
March 6, 2012
The Lotto Max game was launched in September 2009. Like Super 7, the game that Lotto Max replaced, it has a structured jackpot progression. That is, the jackpot starts at a set minimum and if the jackpot is not won, increases each draw by a set minimum. Only once ticket sales push the jackpot levels higher than the set minimums, do the jackpots increase solely based on sales. This is unlike the Lotto 649 game, where the jackpots are based solely on ticket sales.
At the launch of Lotto Max the starting jackpot was set at $10 million and increased by a minimum of $5 million per draw if the jackpot was not won. This jackpot progression stayed in place from September 2009 until August 2011. During that time, there were 8 draws where the jackpot was won and was underfunded by sales. That is, sales had not yet caught up to the predetermined jackpot minimums. The money used to fund these jackpots comes from the bonus prize fund. The bonus prize fund is used to boost underfunded jackpots and support bonus jackpot campaigns. The bonus prize fund comes partially from sales but mostly from unclaimed prizes.
In the 8 draws where underfunded jackpot was won, a total of $18.5 million was added to the jackpots. The largest single amount was $4.5 million which was added to the starting $10 million jackpot for the March 12, 2010 draw. Sales were very low for that draw at only $19.9 million and contributed only $5.5 million to the jackpot. Even though $18.5 appears to be a large sum to have added to the 8 jackpots, it represented only 0.5% of total sales during that two year period.
In August 2011, the Lotto Max jackpot progression was changed. The starting jackpot remained at $10 million but the jackpot increased by $10 million in each draw where the jackpot was not won. The change in the jackpot progression was probably in response to a record 16 draws in a row where the jackpot never reached $50 million. Prior to this streak, there was a $50 million jackpot, on average, once every 4 weeks. Even with the new jackpot progression, the jackpot was won two more times before finally reaching $50 million pushing the record to 24 consecutive draws without a $50 million jackpot.
That is almost 6 months without a $50 million jackpot to boost sales. The reason for a a jackpot progression strategy is to boost sales. The trick is to balance an aggressive jackpot schedule against the possibility of spending too much money on underfunded jackpots that are won.
A new jackpot progression feature was introduced in December 2011 that can be best described as bonus jackpots. When the jackpot reached $30 million and was not won, the next jackpot went straight to $50 million with an additional 2 Maxmillions prizes. The next jackpot level was $50 million plus 10 Maxmillions prizes. Unlike previous draws with Maxmillions prizes where the number of $1 million prizes were directly supported by sales, these draws with 2 and 10 Maxmillions prizes were minimum numbers. That is, they were drawn regardless of sales.
The main reason for the bonus jackpots in December 2011 was to get the jackpot to $50 million for the December 23 draw. Lottery sales are usually higher than average before Christmas and this was an effort to further boost sales. With the normal jackpot progression schedule, the jackpot would have been only $40 million on December 23 and of course, no Maxmillions prizes.
The bonus jackpots in December did not require any extra funding of the jackpots since, by the time the jackpot was won, sales had caught up with the jackpot and extra Maxmillions prizes. And because the bonus jackpots in December were a break even proposition, a second set of bonus jackpots were introduced again in January 2012. The $30 million jackpot on January 20 was not won and the next two jackpots were $50 million plus 2 and 10 Maxmillions prizes respectively.
In the second series of bonus draws, extra funding was required. A total of $6 million was added with $5.7 million for one draw alone - breaking the previous record funding for a single draw. This brought the total amount of extra jackpot funding since the launch of the game to $36 million which represents only 0.75% of total sales to date.
The bonus draw feature was not repeated in March 2012 when the jackpot again reached $30 million and was not won. The normal jackpot progression was followed and the next jackpot was $40 million.