Previous lottery winners have largely taken several annuitized payments over the lottery’s lump-sum option
The Powerball jackpot has climbed to an estimated $1.5billion for the next drawing on Saturday, the fifth-largest in the game’s 33-year history.
The prize swelled by $250million after no player matched all six numbers — 25, 33, 53, 62, 66, and red ball 17 — during Wednesday night’s billion-dollar drawing.
It’s now been 44 straight drawings without a grand prize winner since the jackpot was last hit on September 6 in Missouri and Texas.
The odds of winning remain a daunting 1 in 292.2million. The next Powerball drawing will be held at 11pm ET Saturday, broadcast live from the Florida Lottery studio in Tallahassee.
While the headline figure is eye-catching, lucky winners will likely take home hundreds of millions of dollars less than the giant sum lighting up billboards and gas stations nationwide.
That’s because a chunk of the $1.5billion pot goes to pay taxes.
Plus, the jackpot victor must choose between 30 annual payments or a one-time cash option, both of which affect the total payout.
The jackpot figure represents what the prize would be if the pool were invested in Treasury bonds over 30 years — which is why recent higher interest rates pushed up the headline amount.
Choosing the annuity provides one upfront payment followed by 29 annual installments that rise 5 percent each year.
Few opt for the lump-sum payment, which would be $686.5million before taxes, according to USA Mega.
After the federal government takes a 37 percent cut, the take-home drops to around $432.5million.
Since 2003, only five grand prize winners have chosen the lump sum.
Powerball tickets are sold in 45 states, the District of Columbia, Puerto Rico, and the US Virgin Islands. Winners in each state or territory can expect wildly different final sums because of local taxes.
The Powerball has jumped to the sixth-largest top prize in the game’s history
Winners in California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t pay state taxes on jackpot winnings.
Meanwhile, Maryland, New York, Oregon, New Jersey, and Washington DC winners have to pay state taxes above eight percent on their prize money.
If the winner lives in New York City, for example, they should expect $188million to hit their bank account.
A jackpot winner in Los Angeles would win $40million more at $228million.
Still, the likelihood that a player will take home that life-changing sum is like finding a needle in a haystack, experts told the Daily Mail.
Tim Chartier, a professor of mathematics and computer science at Davidson College, doesn’t bother with the Powerball or Mega Millions games. The odds are just too extreme, he says.
‘Imagine I’m going to pick one second in the last 9.2 years,’ he told the Daily Mail. ‘Now, tell me which second I picked. That’s the same odds to win.’
Lottery experts said players should only purchase a ticket if they’re not worried about losing the money they’re playing with — and that smaller-ticket games might be more fruitful.
‘The biggest thing is to treat it as entertainment,’ said Jared James, the founder of LottoEdge. ‘When the jackpot gets big like this, some people shift that mindset and think “Oh, this is life-changing money.”
‘I would say it’s more money than most people need. Don’t chase this Powerball thinking, “Hey, this is my retirement plan.” Play it for fun, because you’re most likely not going to win.’
