Why 'fix' a Powerball that wasn’t broken?
Worse odds, more hooks and a smaller guarantee — and the people paying for it are not the people it pays.
Tonight, Powerball is drawn from 14 balls for the first time. Lotto NZ has spent months selling the change as “a gamechanger” — more winners, bigger prizes, same price. The 10-ball game it replaces had just delivered a record $434 million for community grants and, a year later, the second-highest return in Lotto NZ’s history.
Which invites an obvious question. Why change something that isn’t broken — and replace it with a game that has worse odds in every existing division, more of the small, frequent wins that keep people playing, and a lower legal guarantee of what goes back to players? On Lotto NZ’s own documents, the answer is that the old game was working for players, but not hard enough for sales.
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Nothing was broken
By Lotto NZ’s own measure, Powerball was thriving.
An unprecedented $1.71 billion of sales in the year to June 2024 produced a record $434 million for community grants, a result chief executive Jason Delamore attributed to a run of high Powerball jackpots. The following year returned $395 million, the second-highest figure in Lotto NZ’s history, with $878 million paid out in prizes. Delamore said it was pleasing to have surpassed forecasts.
Powerball is the engine behind those numbers. In its 2020 briefing to the incoming Minister of Internal Affairs, Lotto NZ described the Powerball jackpot as its main driver of sales and profit.
The game did not need rescuing.
So why change it?
Lotto NZ’s public explanation is relevance.
Delamore says lotteries refresh their games in response to population growth, customer expectations and inflation, and that Lotto NZ faces increasing competition from other gambling operators at home and offshore.
The less public explanation is growth. When the proposal first surfaced, Lotto NZ told the NZ Herald it was reviewing Powerball’s structure to ensure it would continue to drive sales. Lotto games, headed by Powerball, account for about 84 percent of Lotto NZ’s revenue, and the Herald reported in March that the revenue figure — $1.22 billion in 2024 — is budgeted to reach $1.8 billion by 2029. Lotto NZ’s Statement of Performance Expectations, according to Hapai Te Hauora, records that sales begin to increase exponentially once the jackpot passes $20 million.
Put those together and the design brief writes itself. Make the jackpot harder to win, so it rolls over for longer. Raise the ceiling, so it climbs higher. Add a small, frequent prize, so more people feel like winners on the way.
The old game was not failing players. It was failing a growth target.
Worse odds in every division
Four extra balls lengthen the odds of Division 1 from about 1 in 38.4 million to about 1 in 53.7 million per line — 40 percent worse, for the same ticket price. Every other existing Powerball division lengthens by the same 40 percent.
Hapai Te Hauora reports that Lotto NZ is forecasting around 9,000 fewer winners across Divisions 1 to 7 each week.
The trade-off is a bigger number to dream about. The starting jackpot rises from $4 million to $5 million, and the Must Be Won ceiling from $50 million to $60 million. Lotto NZ has projected a $60 million Must Be Won draw every two to two-and-a-half years, and Delamore has been upfront that Division 1 will be won less frequently. That is not a side effect. It is the mechanism.
Lotto NZ still promises 30 percent more weekly winners, from about 47,000 to 62,000. Run its figures against the odds and they only reconcile if about 13 percent more Powerball lines are sold each week. At existing sales, the new odds would produce roughly 55,000 winners, not 62,000.
Lotto NZ’s “more winners” forecast only works if New Zealanders buy about 13 percent more Powerball lines.
Built to keep people playing
The new Division 8 pays a fixed $12 for matching two Lotto numbers, the bonus ball and the Powerball.
Calculated from that definition, the odds are about 1 in 657 a line, which makes it close to four in every ten Powerball wins. On the ten-line $15 ticket Lotto NZ uses in its own examples, a $12 win is a $3 loss that feels like a prize.
Gambling researchers have studied that feeling closely. University of Waterloo psychologists coined the term “losses disguised as wins” in 2010 after finding such outcomes on slot machines were as physiologically arousing as genuine wins. Player-tracking research from Norway notes that gamblers tend to prefer games with more frequent, smaller wins. At the other end of the scale, experimental work has found that large rolling jackpots encourage bigger bets, echoing the rollover effect first documented in lotteries.
Lotto is not the pokies, and Hapai is careful to say so: it is less harmful, but not harmless. The point is that Lotto NZ has chosen to strengthen, at both ends of the game, the features research associates with sustained play. It knows what large jackpots do. During a $35 million jackpot in July, it emailed gambling-harm service providers acknowledging that jackpots at that level may increase the risk of harm for some customers.
The new game is designed to reach those levels more often.
Who pays
Lotto NZ’s answer is everyone, a little.
Delamore describes big-jackpot sales as coming from occasional or casual players, in line with a strategy of encouraging many New Zealanders to play but spend only a little.
The evidence is less comforting. Data Lotto NZ supplied to RNZ showed just under 70 percent of retail sales came from outlets in the poorest half of the country, with Henderson-Massey and Otara-Papatoetoe among the highest-spending areas. Lotto NZ products are the second most common primary gambling mode among people receiving treatment for gambling harm, behind only pokies, at about 12 percent of clients in 2020–21. An Australian study of people who gamble only on lotteries found about one in eight met the criteria for moderate-risk or problem gambling.
That does not make Lotto a product built on addiction, and fairness requires setting out what cuts the other way. The RNZ figures excluded online sales, then about 45 percent of the total, and Lotto NZ’s then chief executive insisted it was predominantly a product for middle New Zealand. Research drawing on data from Québec, France and Germany found lottery spending less concentrated among heavy gamblers than any other form of gambling studied, and a Toronto study found jackpot-driven sales surges were slightly stronger in wealthier neighbourhoods, though the difference was negligible.
But a game redesigned to sell more tickets does not sell them only to the comfortable. Every extra rollover, every $60 million Must Be Won draw and every $12 near-win reaches the Otara dairy as surely as the Remuera supermarket.
For the minority already in trouble, it lands hardest.
A smaller guarantee
The one change Lotto NZ did not advertise decides how the money is split.
Under the Lotto Rules 2025, made under section 243 of the Gambling Act 2003 with ministerial approval, the Powerball prize pool had to be at least 60 percent of turnover. The Lotto Amendment Rules 2026, gazetted on 24 March — the day the gamechanger was announced — cut that floor to 55 percent. Standard Lotto stays at 60 percent.
Turnover is ticket sales less GST and lottery duty of 5.5 percent, about 65.2 cents on an 80-cent Powerball line. The guaranteed prize pool per line falls from 39.1 cents to 35.8 cents. On a ten-line $15 ticket, the combined legal minimum for Lotto and Powerball prizes falls from $7.33 to $7.01.
Lotto NZ may choose to pay more than the minimum; it returned 54 percent of revenue as prizes in 2024. Its promise that Division 2 to 6 prizes will rise by about 45 percent actually requires it to — on the amended shares and new odds, that increase needs a prize pool of roughly 63 percent of turnover. But the bigger prizes are a promise. The smaller guarantee is the rule.
Worse odds for players. A lower legal floor for prizes. More room for everything else.
Where the money goes
Every dollar not paid out in prizes goes somewhere.
In 2024, Lotto NZ’s revenue was split 54 percent to prizes, 25 percent to the Lottery Grants Board, 12 percent to taxes, duties and levies, 5 percent to operating costs and 4 percent to retailer commissions and transaction fees.
Part of that is spent persuading people to play. RNZ reported Lotto NZ spent $23 million on promotion and retail support in 2021, including a Kiwis Helping Kiwis campaign built to link buying a ticket with funding the community. Nielsen ranked Lotto NZ the 11th-biggest advertiser in the country in 2024, ahead of The Warehouse and Bunnings.
The grants do not necessarily flow back to where the tickets are bought. Hapai Te Hauora has argued since 2021 that Maori communities are more likely to contribute to lottery funds and less likely to receive the grants.
That is the redistribution this change accelerates: longer odds and a thinner prize guarantee at one end, advertising to draw in more players in the middle, and grants that skew away from the communities doing the buying at the other.
Questions that deserve answers
The Minister of Internal Affairs approved these rules.
Lotto NZ says it consulted the Ministry of Health, the Department of Internal Affairs and problem gambling experts, including people with lived experience of harm. If that work showed the redesign would not increase harm, it should be published. Hapai has asked to see it.
Lotto NZ should also explain why the Powerball floor was cut when the Lotto floor was not, what prize pool it actually intends to pay, and what sales growth sits behind its 62,000-winner forecast.
The Commerce Commission, for its part, might ask whether “more winners, bigger prizes” conveys an accurate overall impression when the same package lowered the legal minimum returned to players. The Fair Trading Act binds the Crown in so far as it trades, and, as the Commission has long said, a factually correct statement can still be misleading.
Powerball wasn’t broken. It just wasn’t taking enough.
Appendix: Old versus new, by the numbers
Every figure below is derived from the Lotto Rules 2025, the division shares and floor set by the Lotto Amendment Rules 2026, and odds calculated from the 6-from-40 Lotto matrix with the Powerball drawn from 10 (old) or 14 (new) balls. Old odds match those Lotto NZ has published for the 10-ball game.
Table 1 — Powerball, old format versus new format
Div | Match | Old odds (10 balls) | New odds (14 balls) | Old allocation | New allocation |
1 | 6 + Powerball | 1 in 38,383,800 | 1 in 53,737,320 | 94.72% of pool | 94.62% of pool |
2 | 5 + bonus + Powerball | 1 in 6,397,300 | 1 in 8,956,220 | 0.85% of pool | 0.84% of pool |
3 | 5 + Powerball | 1 in 193,858 | 1 in 271,401 | 0.90% of pool | 0.89% of pool |
4 | 4 + bonus + Powerball | 1 in 77,543 | 1 in 108,560 | 0.21% of pool | 0.21% of pool |
5 | 4 + Powerball | 1 in 4,846 | 1 in 6,785 | 1.76% of pool | 1.79% of pool |
6 | 3 + bonus + Powerball | 1 in 3,635 | 1 in 5,089 | 1.56% of pool | 1.65% of pool |
7 | 3 + Powerball | 1 in 352 | 1 in 492 | $15 fixed | $20 fixed |
8 | 2 + bonus + Powerball | — | 1 in 657 | — | $12 fixed |
Table 2 — What the rules guarantee
Legal minimum | Old rules | New rules | Change |
Powerball prize pool floor | 60% of turnover | 55% of turnover | −5 points |
Turnover per 80c Powerball line | 65.2c | 65.2c | nil |
Floor per Powerball line | 39.1c | 35.8c | −3.3c (−8.3%) |
Floor per line after maximum reserve set-aside | 31.1c | 27.8c | −3.3c (−10.5%) |
Standard Lotto floor per 70c line | 34.2c | 34.2c | nil |
Combined floor, ten lines with Powerball ($15) | $7.33 | $7.01 | −33c |
Combined floor as share of $15 ticket price | 48.9% | 46.7% | −2.2 points |
Table 3 — Lotto NZ’s claims, tested against its own rules
Lotto NZ claim | Lotto NZ figure | At flat sales / legal floor |
Weekly Powerball winners under new game | about 62,000 | about 55,000 |
Change in weekly winners, Divisions 1 to 7 | around 9,000 fewer | about 13,400 fewer |
Powerball line sales needed to reconcile | not published | about 13% higher |
Average prize increase, Divisions 2 to 6 | about 45% | about 23% at 55% floor |
Prize pool needed to deliver the 45% claim | not published | about 63% of turnover |
Division 8 odds: lines matching exactly 2 of the 6 winning numbers plus the bonus number = C(6,2) × C(33,3) = 81,840 of 3,838,380 possible lines, or 1 in 46.9; multiplied by 14 for the Powerball, 1 in 656.6.
Turnover: 80 cents less GST (10.43 cents) and lottery duty at 5.5 percent of nominal ticket value (4.4 cents) = 65.17 cents per Powerball line; 70 cents less GST (9.13 cents) and duty (3.85 cents) = 57.02 cents per Lotto line. The reserve set-aside is capped at 10 percent of ticket sales for Powerball and 5 percent for Lotto; Table 2 applies the Powerball maximum to the 80-cent gross price. Reserve fund money is not lost to players outright — the Commission may reallocate it to later prize pools — but it is not guaranteed to any particular draw.
Winner reconciliation: Lotto NZ’s “about 47,000” weekly winners under the old odds implies roughly 14.1 million Powerball lines a week. At that volume, the new odds produce about 33,600 winners in Divisions 1 to 7 and 21,400 in Division 8. Lotto NZ’s 62,000 total and 9,000-fewer figures both require about 15.9 million lines a week. Average Division 2 to 6 prizes are pool-per-line after fixed Division 7 and 8 prizes, multiplied by the combined share, divided by the combined probability; the fixed prizes cost 4.3 cents a line under the old game and 5.9 cents under the new.
Ticket prices are unchanged: 70 cents a Lotto line and 80 cents a Powerball line, $1.50 combined. The standard Lotto prize pool floor (60 percent of turnover, reserve set-aside up to 5 percent of ticket sales) is not changed by the 2026 amendment.
