The Consortium Model
Powerball and Mega Millions aren't run by the federal government or any single state. Instead, they're operated by consortiums of state lotteries that pool ticket sales to create larger jackpots than any individual state could sustain.
Powerball is managed by the Multi-State Lottery Association (MUSL), a nonprofit formed in 1987 by a group of state lotteries. Mega Millions (originally The Big Game) is operated by a separate consortium. Since 2010, a cross-selling agreement allows all participating states to sell both games.
How Money Flows
Each participating state sells tickets and retains its share of revenue (typically 50% for prizes, 30-35% to the state beneficiary, and 15-20% for operations and retailer commissions). The jackpot prize pool is funded from all participating states' contributions. When no one wins, the unclaimed jackpot portion rolls over to the next drawing, creating the massive prizes that drive "lottery fever."
Rule Changes Drive Bigger Jackpots
Both games have repeatedly adjusted their rules to make jackpots harder to win — and therefore bigger when they eventually hit. Powerball expanded from 5/45 in 1992 to the current 5/69 + 1/26 format. Mega Millions went from 5/56 + 1/46 to 5/70 + 1/25. These changes lengthened jackpot odds from roughly 1 in 80 million to over 1 in 290 million, enabling billion-dollar prizes.
Our Powerball guide and Mega Millions guide detail the current rules and all prize tiers.
Drawing Security
Powerball drawings are conducted at MUSL headquarters in Tallahassee, Florida. Mega Millions drawings are held at WSB-TV studios in Atlanta, Georgia. Both use gravity-pick machines with multiple ball sets rotated randomly. Independent auditors verify every drawing. The drawings are broadcast live and recorded for verification.
Can New States Join?
Any state with a lottery can petition to join either consortium. Recent additions have expanded both games to 45 states plus the District of Columbia, U.S. Virgin Islands, and Puerto Rico. The more states that participate, the larger the player base, and the faster jackpots grow.