||Greetings Gentle Reader,
Here are the answers to the most common questions. PLEASE browse through the information below to find your answers right now. We get a lot of mail (up to one a minute during a big jackpot). By checking below, you get your answer faster and we can get to the rare new questions faster too.
If your question is one of the very few not answered here, you can click the link at the bottom of the page to send us your question.
Multi-State Lottery Association
4400 NW Urbandale Dr.
Urbandale, IA 50322
POWERBALL BECOMES A PREMIUM JACKPOT GAME
Celebrate the $2 bill and use it to play the new American premium big jackpot game. In these first draws we’ve seen a big jump in prize dollars moved to players and a big jump in dollars raised for good causes in each state. Powerball: For the benefit of Americans.
Bigger Jackpots; Fewer Numbers to Match
Red ball numbers 36, 37, 38, and 39 are gone. Sorry if they were your favorite red ball numbers, but the game is now easier to win. The odds of hitting the jackpot drop from 1 in 195 million to 1 in 175 million. Still, since we are nearly doubling the money now going to the jackpot, the average jackpot hit will jump from about $141 million to about $255 million. The guaranteed starting jackpot will double from $20 million to $40 million and the minimum jumps will now be by at least $10 million each draw (up from $5 million in the old game).
The second prize (Match5+0) has quintupled from $200,000 to $1 million cash. We know that no one plays Powerball to win $1 million, but that continues to be the most common suggestion we get: "Instead of paying out $100 million, why not give 100 people $1 million?" We know that the vast majority of players come to Powerball for the big jackpots, but we decided to try giving out lots of $1 million prizes anyway. Last year, Powerball awarded about 500 Match 5 prizes. If the game had been in place last year, those would have been $1 million prizes. All U.S. lotteries award about 1,000 $1 million prizes per year, so Powerball alone could be increasing that by half.
Better Overall Odds
Since there are now only 35 red balls in the drum, it is easier to match the red ball - and you always win a prize if you match the red ball number (either alone or with one or more white ball numbers). The overall odds of winning any prize in the game also get easier. And the lowest cash prize is now $4 (up 33% and the price of two tickets; we hope you decide to do that).
Now that Mega Millions and Powerball are available (nearly) everywhere, we wanted to give players more variety. Powerball is now the premium lotto game with higher jackpots (most of the time; Mega Millions is still a big jackpot game); a $1 million second prize (second place is no longer the "first loser"); and better overall odds. Those players who focus on spending $1 for their dream still have Mega Millions. Those players who are willing to lay out an extra 20 NICKELS for their big dream, a chance at $1 million (virtually a second big game on its own) and betters odds of doubling their spend can choose Powerball.
Power Play is changing too. The old concept was to multiply your prizes at random by 2X to 5X. There was a certain amount of fun to that with players sometimes multiplying their prizes by 5X and not so much fun when multiplying by 2X. The new Power Play is very simple. We just pay higher prizes to Power Play winners. No more math involved. With Power Play, the $1 million is ALWAYS $2 million. The lowest prizes of $4 ALWAYS triples to $12. The $7 prizes ALWAYS double to $14. The $100 prizes ALWAYS double to $200. The $10,000 prize with odds of 1 in 650,000 (how easy is that?) ALWAYS quadruples to $40,000.
MY EMAILS HAVE STOPPED; YOU NEVER RESPOND TO ME; STOP SENDING ME SPAM!!!
We do send out an email with the numbers drawn after every Wednesday and Saturday draw - but only to persons who have signed up to receive them. If you no longer want to get them, there is a link at the bottom of the message to stop them. PLEASE don’t just hit the “report spam” button. If our messages have stopped coming to you all on their own, then it is likely because your Internet provider has blocked us because too many other players have hit the “report spam” button instead of clicking our sign off link. When we are aware of an ISP blocking us, we try to work with them to whitelist us.
Our system will automatically drop your name if your provider sends us back a message identifying our emails as spam. If you are not getting our email and try to sign up again, you will either succeed in signing up again or you will be told that you are already signed up. If you can sign up again, that means that our system did drop you following a notice from your provider. If you are told that you are already signed up, then our emails are probably getting moved to a "junk mail" or "spam" folder by your provider or by your email program. Check there and mark it as "not junk". If you want to whitelist us in your program (or with your ISP) you may need to know that our emails come from "pbinfo@elists.MUSL.com"
We try to respond to every letter. If you did not get a response, it is because your Internet provider has blocked us. Our beautiful prose sent to you bounces back to us - very frustrating for us and we are helpless to respond to your complaints about us not responding.
We do not send out spam. You must sign up to receive our emails. We only send out an email with the numbers and jackpot amount after every Wednesday and Saturday draw. Every email contains a link that allows you to drop off the list. There are pond scum out there who "spoof" our email address and send out spam. We cannot stop them. These ne'er-do-wells could just as easily send out spam using your email address. The only thing that we send out are the winning numbers and jackpot amounts after every Wednesday and Saturday draw. Anything else is not from us.
WHAT ARE THE WAYS TO WIN?
You can see a chart here: http://www.powerball.com/powerball/pb_prizes.asp
DO I HAVE TO MATCH THE NUMBERS IN THE EXACT ORDER DRAWN?
No (except for the red ball number). The tickets print the white ball numbers (the first five numbers) in numerical order. You can match the first five white ball numbers drawn in any order. The red Powerball number on your ticket (the last number, often behind a "PB") must match the red Powerball number drawn. You cannot criss-cross lines to match numbers. You cannot use numbers on other tickets or the tickets of a friend or even a close relative.
WHAT DOES POWERBALL COST TO PLAY?
The new 59/35 game costs $2 for a single play for one drawing. To add the Power Play multiplier, it costs an additional $1 for each play. You can learn more at:
WHERE CAN I WATCH THE DRAWING?
Powerball draws can be seen on hundreds of TV stations nation-wide. It may also be available on cable (check WGN). And we post the draws on YouTube and on our site. Check here:
MY NUMBERS ARE: XX-XX-XX-XX-XX-XX; DID I WIN?
I can't check numbers for a million folks a week. You can check your numbers on the web site. Teach a man to fish. Please go to:
HOW DO I CLAIM MY PRIZE? CAN I CLAIM OUT OF STATE?
You can generally claim a prize of under $600 at any retailer in the state where you bought the ticket, but be advised that some retailers will not carry the cash needed to pay higher prizes. Sometimes, a convenience store that has safety concerns may not carry the cash. In a few places, there are "super retailers" that can pay up to $25,000. Look for a clerk wearing a cape and tights.
Each state lottery has its own central computer system. There are about seven different system platforms operated by three different vendors in a highly competitive market. The state lottery systems are not interconnected. As powerful and as fast as computers are, you might imagine the power and cost needed to develop a system in each state to record and store play numbers for the entire claim period for all states and that is always connected to every other state so each state is instantly aware of plays made and cashed. A system of transferring money back and forth between states would also have to be maintained as states cash each other’s tickets. While this system would be convenient for the rare player who travels, the vast majority of winning tickets are purchased by someone who is close to the lottery terminal where it was purchased. You do NOT have to cash the ticket at the same store, but you do have to cash the ticket in the same state. You can also claim any prize - and prizes over $600 - at the state lottery headquarters. You can even claim winning tickets by mail. Click on a state at the map link below to find the address and possibly a claim form:
WHERE CAN I FIND OLD NUMBERS?
You can search for a particular set of numbers over a specific period
This is useful if you buy the same numbers for a long period of time and want to see if they’ve ever won.
You just get a list of numbers here:
This is useful if you do NOT buy the same numbers each time and just
need to find the historical numbers drawn last month, last year, etc.
Look around the numbers page:
There is a lot of information available there. Click on all the links.
There is a “frequency” link and much more information. We even hide some of the more arcane information at secret little link spots.
CAN I BUY POWERBALL TICKETS THROUGH THE INTERNET?
Some lotteries do sell TO THEIR RESIDENTS through the Internet but generally, no, at least not in the way that you might hope. Powerball tickets can only legally be purchased at a state lottery sales terminal in the lottery jurisdictions that sells the Powerball game. A lottery can also legally sell tickets on the Internet, but only to persons within its own state. No one can sell lottery tickets by mail or over the Internet across state lines or the U.S. national border. No one. Not even us. No one. No, not even that web site. Or that one. You really don't need to send me questions about a specific site. Like all others, that one also cannot legally sell lottery tickets across a state border or the U.S. border. No.
Any Internet lottery site that purports to sell Powerball tickets, or “shares” of Powerball tickets to purchasers or to run a “service” for you, is operating illegally. They are not authorized by the Multi-State Lottery Association or by any U.S. lottery. There are legal Internet sales of lottery tickets in some states or countries, but only within the borders of that state/country or by agreement between nations. The United States has no agreements with any other nation to allow lottery tickets sales across the national border.
The laws of your state prohibit the purchase of another state’s lottery ticket across state lines. Federal laws also make out-of-state lottery plays across a state line illegal. You can legally travel to another state, buy a ticket, and bring it back to your home state. If it ever does become legal, we will sell tickets here. No.
CAN I PLAY POWERBALL FROM OUTSIDE THE STATE OR THE U.S.?
No. Repeat as necessary. If that changes, we will say "yes" here and tell you how.
CAN A NON-RESIDENT WIN POWERBALL?
If you legally purchase a Powerball ticket, you can play the game and you can collect prizes. You do not have to be a citizen or a resident to play the game. You can be a tourist. That said, some states do have rules that seem to imply that a winner must produce evidence of citizenship or a federal SSN, but there are other ways to hold back taxes for a winner who does not have a U.S. SSN. Occasionally, some state lawmaker talks about limiting wins to U.S. citizens, but no laws have passed so far.
IS THERE A SECRET TO IMPROVE YOUR CHANCE OF WINNING POWERBALL?
Yes. There is a way to improve your chance of winning the dual-drum games (Powerball, Mega-Millions, Hot Lotto, and Wild Card). But you have to promise to keep the secret – called THE BIG SECRET TO WINNING POWERBALL -- between you and me.
First, we need to cover some things that don’t work. Swinging a live chicken above your head while wishing for the future numbers does NOT work. There is no improvement to be had by swinging a dead chicken. Although I have not tested it, swinging a bucket of extra crispy is not likely to work either. We have had winners who played their fortune cookie numbers – on two occasions – but such things are just bound to happen sometimes. It is also no good to follow the alignment of the planets or the arrangement of tea leaves or any other such thing. Any of these ideas will win sometimes, but that is just chance working its magic and there is no guarantee.
It is obvious that buying more tickets will help, but the odds are still high and hitting the jackpot is still a question of fate. The secret to the dual-drum games is that they pay a prize for matching just one number from the second drum. There are 35 numbers in Powerball’s second drum and so, if a group buys 35 tickets in the Powerball game, each with unique red Powerball number, then you are 100% guaranteed to win the $4 prize, at least. At first, that $4 might not seem like much, but if you think about it, you can see just how special this secret can be for a group. In a regular (pick 6) lotto game, a group can buy lots of tickets and sometimes never win anything. In Powerball (and the other dual-drum games), you can buy a set of tickets that will have a winner EVERY TIME. A lottery may occasionally offer special pricing on a ticket package, but why wait for the lottery to run a limited-time promotion? With this secret you can create your own discount (a rebate really) for EVERY draw.
If you have a group playing (a little pricy for most individual players), you might consider covering all of the red balls.
ARE SUBSCRIPTIONS, FUTURE PLAYS, OR MULTI-DRAWS AVAILABLE?
Subscription plays are off-line purchases that usually include an automatic payment or repurchase option. They may be offered for up to one year. Federal law prohibits the sale of this type of purchase across a state line, since it involves automatic purchases. Several Powerball states do offer subscription sales and more are coming, but you do have to be a resident of that state (and use a local address) to buy a subscription play. You can check the web sites for those states to play by subscription.
Multi-draws can be purchased by anyone (of legal age) at the retailer terminal in the lottery jurisdiction and can be carried out of the jurisdiction (unless there is a law in your jurisdiction against possessing a lottery ticket). The number of multi-draws varies by state. Here is the most recent list that we have (note that one week is two draws). These can also change from time to time. Arizona-5 weeks; Arkansas – 10 weeks; California-10 weeks; Colorado-13 weeks; Connecticut-13 weeks; DC-10 weeks; Delaware-5 weeks; Florida-26 weeks; Georgia-13 weeks; Illinois-7 1/2 weeks; Iowa-5 weeks; Idaho-5 weeks; Indiana-5 weeks; Kansas-7 1/2 weeks; Kentucky-8 weeks; Louisiana-10 weeks; Maine-10 weeks; Massachusetts-7 1/2 weeks; Maryland-7 1/2 weeks; Michigan-30 weeks; Minnesota-14 weeks; Missouri-7 1/2 weeks; Montana-12 weeks; Nebraska-12 weeks; New Hampshire-10 weeks; New Jersey-4 weeks; New Mexico-5 weeks; New York-13 weeks; North Carolina-13 weeks; North Dakota-4 1/2 weeks; Ohio-5 weeks; Oklahoma-5 weeks; Oregon-13 weeks; Pennsylvania-13 weeks; Rhode Island-13 weeks; South Carolina-10 weeks; South Dakota-4 1/2 weeks; Tennessee-5 weeks; Texas-5 weeks; Virgin Islands-5 weeks; Virginia-13 weeks; Vermont-10 weeks; Washington-5 weeks; Wisconsin-4 weeks; West Virginia-12 weeks.
Future plays are used to make a purchase for a drawing at some time in the future - skipping draws until that future date. Futures draws are not available in all jurisdictions. Check with your local lottery. You can check the map for links to your lottery:
DO POWERBALL TICKETS EXPIRE?
Yes. The Universe is decaying and nothing lasts forever. Ticket expiration periods vary from state to state - from 90 days to one year. They may also change from time to time. The back of your ticket will often give the expiration period for your state. If it is not on the back of your ticket, you might check with your state lottery by using the map. For obvious reasons, we don't want to give you wrong information about the time frame for cashing tickets with your lottery. In rare cases, your elected officials will change the expiration period (sometimes they run out of other stuff to vote on). They may shorten it even though you may find an old brochure or old ticket stock with a longer claim period. Often the lottery will honor your ticket in such a case, but if you plan to wait longer than 90 days to claim a big prize, you might just call up the lottery or go to the online site and double check on the expiration period.
WHAT TIME AND WHERE IS THE DRAWING?
The drawing is held at 10:59 p.m. Eastern Time [9:59 Central; 8:59 p.m. Mountain; 7:59 p.m. Pacific] in Florida.
Occasionally, the multi-state lottery games go on the road and are drawn during special events around the nation. The numbers are drawn in the presence of multi-state lottery draw officials, an independent auditor and a security official. The draw equipment is kept in a double-locked alarmed vault (we can't even get into it unless the auditors are present). The balls sets are also sealed by the auditors and all events are audio and video recorded when the vault is opened. The equipment is tested regularly (measurements, X-ray and statistical tests for non-random behavior). The live drawings are also open to the public. The whole process takes about two hours, so pack a snack.
WHEN ARE SALES CUT-OFF?
Sales cut-off times vary by state - from one hour before the draw to two hours before the draw. These may change from time to time. Of course, a particular retailer may also have shorter store hours. For specific state lottery information, you can click on the state lottery web site through this map:
CAN INDIVIDUALS IN A GROUP CHOOSE CASH AND ANNUITY?
CAN INDIVIDUALS IN A GROUP DIVIDE THEIR SHARE UNEQUALLY?
An individual lottery may have rules about how they will pay a winner (how many checks; how many winners to process, etc.) but we can handle any request to divide the prize payments. We can divide the prize however the individuals in a group wish, including different requests for cash or annuity.
CAN I REMAIN ANONYMOUS WHEN I HIT THE JACKPOT?
All but five states (DE, KS, MD, ND, OH) have laws that require the lottery to release the name and city of residence to anyone who asks. Other states may offer to assist you in some way, including such things as the creation of trusts. But generally, you will want to hire an attorney to review the laws in your state to see what options you might have. Photos and press conferences are up to you for most, but not all states. Check with your state lottery to see if photos or more are required. Most of the time, it is advisable to get it over with the press so that you don't have one or more reporters following you around to get that "exclusive" interview. Even if the you can keep your identity secret from the press and the public, you will have to be known to the lottery - so they can confirm that you are eligible to play and win.
WHAT HAPPENS TO UNCLAIMED PRIZES?
Unclaimed prizes are kept by the lottery jursidiction. About half of the lotteries are required to put the money back into a game. The other half is required by law to turn the money over to the state's general fund. If a jackpot is unclaimed, The money must be returned back to all lotteries, in proportion to their sales for the draw run. The lotteries then distribute the money as they are required by law - back into other lottery games or back to the state's general fund.
WHAT HAPPENS IF AN ANNUITY PRIZE WINNER DIES?
The estate will handle the lottery prize. A lottery annuity prize is just like any other asset. You can pass any remaining annuity payments on to your heirs or to anyone else. The Powerball game will even cash out an annuity prize for an estate. This may make it easier for the estate to distribute the prize. It also may be necessary to cash out the annuity to pay Federal estate taxes. We will sell some or all of the securities at competitive bid or will even just transfer the securities to the estate. We do not charge a fee of any kind. I think that this misunderstanding may come from the response that the prize "goes to the Estate" and some people hear "goes to the State."
HOW LONG DOES IT TAKE TO GET MY MONEY?
It takes up to two weeks to collect the cash from the stores around the nation. If you go to the lottery to claim your prize after that two weeks, then, in many states, you can generally have the jackpot money (all cash or the first of the annual payments) hit your bank account the next day - maybe the following day if you come to the lottery office very late in the day. Some lotteries must work through the state system and that can delay the payment. That said, Powerball jackpot winners genneraly don't have trouble getting a little credit if you wish to buy something before the money arrives. Just mention my name - and that you are the Powerball winner.
I NEED TO CHANGE MY ADDRESS OR UNSUBSCRIBE.
Go to this link http://www.powerball.com/players/pb_club.asp
You can add yourself to our email service; delete yourself or just change your address by doing both.
I GOT AN EMAIL SAYING THAT I WON THE LOTTERY; IS IT LEGITIMATE?
NO. It is a common scam. We get over 100 emails each week asking this question. We get over 100 telephone calls each week asking this question. this has gone on for the last several years. We even get emails sent here telling us that we've won the Powerball. You never have to send money to collect a legitimate lottery prize. You should never reply to these emails. You should never send money to these people. You should never give your bank account number or your mother's maiden name to anyone. You should never run with scissors. You may even be sent a check to cover the costs and then be asked to wire back some money. But the check will bounce (sometimes not for months and then you are charged with writing bad checks). It is best not to respond or you can be put on a list to receive other scams. Progress is being made in catching these crooks (on May 23, 2006, the U.S. Justice Department announced 565 arrests in lottery and sweepstakes scams; on August 5, 2006 a scam ring leader was arrested in Nigeria), but there are many crooks still out there.
Go to this link to see some common lottery scams - your exact sample may not be there, but it is still a scam; the scammers keep changing things a bit:
If you still want to respond to these emails, consider these headlines:
Woman duped in alleged scam, Bismarck Tribune, Nov 27, 2006 - An elderly Bismarck woman reportedly has been fleeced of more than $100,000 in an apparent lottery scam.
Woman Loses $6,000 in Lottery Scam, The Buffalo News
Lottery Scam Warning, Berwickshire Today (UK)
Lottery Scams Being Run, Troy Messenger (AL)
Sunnyvale Police Search for Lottery Scam Suspects, CBS 5 (CA)
BBB Warns Seniors to be on Guard for Scams, Beaumont Journal
Harmiston Woman Worries Others Might Fall for Scam, East Oregonian
San Martin Woman Loses More Than $5,000 to Mail Scam, Gilroy Dispatch (CA)
Lottery Scam Victim: "No One Cares", Consumer Affairs
Victims lose big in lottery scam, News 14 Charlotte
Canadian Lottery Scam Hits Wilmington, WECT - Wilmington, NC,USA
If it says you've won, drop the mail in the trash, Hot Springs Village Voice
New Mexico Lottery warns of Powerball scam, BizJournals
BMW Lottery Winners Beware, SDA India Magazine - Singapore
Police warns citizens of bogus lottery,Enterprise Ledger
Lottery scam: You don’t have to play to lose, Richmond Register - Richmond, KY,USA
-- Just go to news.google.com and search on "lottery scam" for the current day's scam victims.
For a list of common Internet scams, try clicking here: http://www.powerball.com/Common-Scams.asp
You can also file a complaint with the U.S. government at: http://www.ic3.gov/
YOUR ODDS / PROBABILITIES ARE WRONG.
Are not. Sure, the odds of matching 1 red ball out of 35 are 1 in 35, but we are not giving the odds for matching a red ball. We give the odds for winning a prize for matching one red ball ALONE. If you match the red ball and one or more white balls, you win some other prize, but not this prize. The odds of matching one red ball ALONE are harder than 1 in 35 because there is some risk that you will also match one or more white ball numbers - and then win a different prize.
Some persons who enjoy statistics (they do really exist) will come up with odds of 1 in 17 billion for the jackpot prize. Remember that you don't need to match the numbers in exact order - we use combinations to determine the probabilities for the first five white balls and not permutations.
HOW COME THE ONLY JACKPOT WINNERS ARE FROM THE [EAST - WEST - NORTH - SOUTH - CITIES - RURAL AREAS]?
HOW COME ONLY [WHITE, BLACK, TALL, SKINNY, YOUNG, OLD] PEOPLE WIN?
Powerball is a random game that knows nothing about who buys a ticket or where a ticket is purchased. There really is no white/black/old/young/rich/poor, etc.] button on the machine. If one draws a box around some group of players (eg., state border, hair color, shoe size), then that group of players will win in proportion to their play. If the defined group buys 10% of the tickets, then they will win 10% of the prizes - on average and over a reasonable period of time. But that does NOT mean that you have a better chance of winning in a bigger box - you then just have more folks to play against. The Law of Large numbers explains how random expectations become truer as the number of occurrences increases. So, if players in a particular group buy 8.6754% of the tickets, then we will find, if the number of occurrences (prizes awarded) are large enough, that those players win 8.6754% of the prizes. This is definitely true for the low-tier prizes where there are large numbers of winners. With 12 to 15 jackpot winners in a year, we would expect that these percentages can get out of sync with sales from time to time, but as the number of jackpot winners continues to increase, we will find that the percentage numbers move closer and closer to being the same number. Try this experiment. Flip a coin four times. You might get 75% heads - or even 100%. You would not expect to get excited about that. With only ten flips, it can happen. But then flip it 1,000 times (no cheating). You will come much closer to the statistical expectation of 50% heads. If you hit 75% heads after 1,000 flips, then something is wrong. It really does NOT make any difference where you buy your ticket. It is you a against the draw machine.
WHICH HAS THE BETTER CHANCE OF WINNING: COMPUTER PICKS OR PLAYER PICKS?
About 70% to 80% of purchases are computer picks. About 70% to80% of winners are computer picks. Perhaps just one of those weird coincidences?
WHY IS THERE A DIFFERENCE BETWEEN THE CASH PAYOUTS IN THE POWERBALL AND MEGA MILLIONS GAMES?
A fixed percentage of every Mega Millions and Powerball ticket sold goes into its CASH jackpot. The cash jackpot is all the money that the lottery has on hand from the sale of tickets in the game. If a player chooses the cash option, then the lottery will pay the entire cash amount to the winner (less income tax withholding amounts required by federal and state laws).
The lottery also offers an ANNUITY jackpot option that can help reduce taxes and offers the winner a 100% guaranteed income stream over time. The two games offer different types of annual income streams, giving the players more options. If a winner elects the annuity option, then the lottery will invest the entire cash amount before taxes are deducted. The difference between the CASH jackpot and the ANNUITY jackpot is the interest earnings that build over time. The Powerball annuity jackpot earns more interest for two reasons.
1. The Powerball Annuity Jackpot invests more money for a longer period of time. The Powerball annuity is paid out in graduated amounts (rising by 4% per year to keep up with inflation) over 29 years (30 payments). The annual payments grow larger to keep pace with the winner’s expected cost of living. The Mega Millions annuity is paid out over 25 years (26 payments) with equal payments each year. In both cases, the first payment is an immediate cash payment.
2. The Powerball Annuity Jackpot is invested in a wider variety of securities than the Mega Millions Jackpot, allowing more interest to be earned. All of the securities used to support both games’ jackpots offer significant levels of U.S. Government backing. It is important to understand that the lottery is invested in these securities; not the winner. The winner has a contract with the states to pay the annual prize payment, no matter what happens to the securities.
Since the two games' jackpots are invested differently, if the CASH jackpots are the same, the Powerball jackpot will pay a larger ANNUITY over time than Mega Millions. If the ANNUITY value of the jackpots are the same, then Mega Millions' CASH jackpot will be larger than Powerball's CASH jackpot.
The CASH jackpot amounts present the true present-day values of the jackpots. A winner who wishes to take the CASH jackpot should compare only the CASH jackpot amounts. The ANNUITY jackpot amounts will be important for those winners who plan to select a long-term, fully guaranteed income stream.
IS THE CASH AMOUNT THE JACKPOT AMOUNT AFTER TAXES?
No. taxes generally apply to both the annuity or the cash option. When someone wins the jackpot and wants cash, we give them all of the cash in the jackpot prize pool. If the winner wants the annuity, we invest the cash to fund the annuity payments. The winner gets the cash plus the interest earned. When you see an estimated jackpot annuity prize, we are estimating both sales and what the market's prices on certain securities will be. The annuity jackpot amount and the cash jackpot amount that we announce are always estimates until sales are final and, for the annuity jackpot, until we take bids on the purchase of securities.
Federal and State Income tax apply to whatever income you actually receive in a given tax year, whether it is wages or lottery prizes. If you take the cash amount (say $50 million), then you pay income tax on $50 million) - most of it at the highest tax rate. If you take the annuity (say $100 million), then you pay income tax on the money you actually receive each year - moving more of the money to lower tax rates. Just like your wages, a withholding amount is required to be taken out immediately. The lottery will send you a W2-G form and you figure your actual tax at tax time.
CASH VS. ANNUITY - MY FINANCIAL EXPERT SAYS HE CAN EARN MORE THAN THE ANNUITY WITH THIS CASH.
Maybe. We have seen that even financial experts forget about taxes. From the example above, if the winner takes the cash, then the winner
will have to pay state and federal taxes on the cash amount. The amount of income tax will vary, but it will likely be somewhere close to half the
cash amount (counting federal and state taxes). With $50 million as a cash prize, a cash winner will have less than $30 million to invest. We don’t pay any income tax and so start out by investing the whole $50 million. You should note that current tax rates are pretty low right now and may go higher in the future. Federal rates for 2012 are at 35% (and Powerball winners end up in that maximum tax bracket).
Sometimes financial experts also do not understand how the annuity prize is paid out. We do not hold the prize for 29 years and then pay
it all out. The Powerball annuity prize is an annuity stream. The winner gets the first payment immediately and then an annual payment for the next 29 years. And this is guaranteed. It is possible to beat this income stream, but not without risk. Deciding how to take the prize can be a complicated decision, but it is an important one that deserves your attention. You have 60 days, after you claim your ticket, to make the decision. Get lots of advice and ask these kinds of questions.
I HAVE A GAME IDEA; YOU SHOULD GIVE 100 PEOPLE $1 MILLION EACH.
We do get mail from persons offering ideas that promise to double or triple our sales in the game. We also get a lot of mail that starts - "Everyone I talk to agrees that Powerball should pay more and smaller prizes, who needs $XXX million!!!" In this new game we are going to give away hundreds of $1 million prizes - but we cannot convert the jackpot to all $1 million prizes. These writers usually get extremely angry when we try to explain why their idea won't work - so we prefer to use this standard response. Please accept this response with our apologies for not recognizing how very right you are:
(1) If you are sending in a game idea with no demand for payment: Thank you for your idea and comments, we will certainly pass it on to the design team; will run it by our very expensive patent law firm for a review of other possible patent infringement ideas (so we don't get sued); and then will develop and run qualitative and quantitative research to test the concept with a mix of players.
(2) If you are sending in a game idea and demand payment: Please understand that we cannot accept game ideas. If you have faith in your idea you may consider seeking a patent on it (at least $10,000 and two years) or you can submit the idea to a state lottery's advertising agency. You can contact your local state lottery to find a contact for their advertising agency. The agency understands the process of reviewing your game design idea and can also assist you in protecting your idea.
(3) If you believe that we should pay out $1 million prizes to lots of persons: After players told us that in focus groups, we actually started that game. No one played. Lotteries need to create a variety of games that appeal to different players. Powerball is a game that appeals to those players who want to play for large jackpots. There are other games that offer better odds (and so, lower jackpot amounts). Sales for a Powerball drawing can vary from $16 million to $200 million. You might guess which jackpot levels bring the most sales. Players vote with their dollars on the jackpot levels they prefer and we must listen to our customers. Powerball is actually two games in one – a big jackpot game and a big Cash 5 game. Now, a player will win $1 million just by matching the five white ball numbers. We know folks don't really get excited about that, but it is just something we want to do. By adding the Power Play option, a player can even increase the Cash 5 part of the game to a $2 million cash prize.
YOUR QUESTION NOT HERE?
If your question is a bit more unusual (oh, let's say, "more imaginative"), it may be answered at
AND FINALLY . . .
The state lotteries have professional staffs who respond to questions. They know the state lottery operation the best and if they do not know the details of how a multi-state game works, they can get the answer from us and they will write back with a very nice response. If you like to be rude and yell at people who won't be rude back, then the state lottery is where you should write--they are professionals. We have a very small staff here with no one who has the job of responding to letters. Here, your letter will likely be answered by the top guy, who works 24/7. He will give you a complete and straight answer but he can sometimes come off as a little abrupt in email, especially when he has too little time to spend on each letter. He also thinks that he is a comedian. We apologize in advance for him. Here are some comments from actual letter writers to his responses.
If your question is not answered here, you can send your question to Letters@MUSL.com