Powerball’s jackpot has surged again, now estimated at $1.3 billion after the latest drawing on Monday.
This marks the sixth occasion when a Powerball jackpot has exceeded $1 billion and the 13th time in total for both Powerball and Mega Millions combined. Currently, this jackpot ranks as the fifth largest in Powerball history and ninth among all lottery games. It trails only the $1.326 billion jackpot won in Oregon last spring.
The biggest jackpots in the top 10, including Mega Millions
1. $2.04 billion (Powerball): November 7, 2022, California
2. $1.765 billion (Powerball): October 11, 2023, California
3. $1.62 billion (Mega Millions): August 8, 2023, Florida
4. $158.6 billion (Powerball): January 13, 2016, California, Florida, Tennessee
5. $1.537 billion (Mega Millions): October 23, 2018, South Carolina
6. $1.34 billion (Mega Millions): January 13, 2023, Maine
7. $1.337 billion (Mega Millions): July 29, 2022, Illinois
8. $1.326 billion (Powerball): April 6, 2024, Oregon
9. $1.3 billion (current Powerball Jackpot)
10. $1.269 billion (Mega Millions): December 27, 2924, California
Even though the jackpot has crossed such a significant milestone, the winner from Wednesday’s drawing won’t actually walk away as a billionaire. The largest jackpot winner to date, at $2.04 billion, also didn’t reach billionaire status due to taxes.
Taxes play a significant role here. Winners face an immediate 24% federal tax withholding, and with additional taxes, around 37% of the prize money is effectively withheld.
In states without a lottery tax, after 30 years of payments, the total annual payments could amount to approximately $820 million, according to USA Mega. Even cash options, estimated at $589 million, will yield about $371 million post-taxes after the Wednesday drawing.
According to USA Mega, in just five states—Maryland, Minnesota, New Jersey, New York, and Oregon—the total pension payments would be under $700 million, with New York sitting around $678.6 million, significantly lower than the $1.3 billion advertised jackpot.
However, pensions across the states typically offer more than what it might initially cost to secure a Powerball jackpot win.
The upcoming interactive map illustrates the projected pension and cash awards for each state based on the current Powerball jackpot.
Why the discrepancy in the amount actually received versus the advertised jackpot? It’s tied to how the game is structured.
As Carolyn Becker, an assistant director within California’s lottery division, previously noted, the $1.3 billion jackpot isn’t an actual sum available to the winner in cash. Instead, it correlates more to the lump sum payment, which is currently estimated at $589 million.
Cash values listed for the jackpot are essentially the required amount on draw day to fund the calculated jackpot, which would be distributed if the winner opted for annual payouts. To fulfill the promise of a $1.3 billion payout, the lottery would need that lump sum of $589 million.
The pension option is really tied to U.S. Treasury interest rates used to fund prize payments, which tend to yield a larger return over time. However, many jackpot winners opt for lump-sum payments, which some financial advisors caution might not be the wisest choice.
Additionally, there’s a possibility for the jackpot to grow even larger before the next drawing on Wednesday night. Just last Thursday, it was estimated at $950 million, pushing past the billion mark just before the Saturday drawing.
Powerball games are available in 45 states, Washington D.C., Puerto Rico, and the U.S. Virgin Islands. Drawings happen every Monday, Wednesday, and Saturday at 10:59 PM ET, offering a chance at winning the jackpot of 292.2 million.
