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(NEXSTAR) — The Powerball jackpot has climbed again, reaching an estimated $1.3 billion after Monday’s drawing.
This is the sixth time the Powerball jackpot has surpassed $1 billion, and the 13th time a jackpot, whether Powerball or Mega Millions, has surpassed $1 billion. The jackpot now stands as the fifth-largest in Powerball history, and the ninth-largest across both draw games. It sits just below the $1.326 billion Powerball jackpot won in Oregon last spring.
Top 10 largest Powerball, Mega Millions jackpots
- $2.04 billion (Powerball): Nov. 7, 2022; California
- $1.765 billion (Powerball): Oct. 11, 2023; California
- $1.602 billion (Mega Millions): Aug. 8, 2023; Florida
- $1.586 billion (Powerball): Jan. 13, 2016; California, Florida, Tennessee
- $1.537 billion (Mega Millions): Oct. 23, 2018; South Carolina
- $1.348 billion (Mega Millions): Jan. 13, 2023; Maine
- $1.337 billion (Mega Millions): July 29, 2022; Illinois
- $1.326 billion (Powerball): April 6, 2024; Oregon
- $1.3 billion (Current Powerball jackpot)
- $1.269 billion (Mega Millions): Dec. 27, 2924; California
Though the jackpot has crossed such a monumental benchmark after an apparent drought, a winner in Wednesday’s drawing wouldn’t walk away a billionaire. Even the winner of the largest jackpot on record, $2.04 billion, didn’t become a billionaire.
It is, of course, thanks to taxes.
No matter where you live, your prize will be subject to 24% in federal tax withholding immediately. With additional taxes, you’ll see roughly 37% of your prize money withheld, according to USA Mega.
At best, in the states without a lottery tax, your total annuitized payout — after all 30 annual payments — would be about $820.3 million, an analysis by USA Mega found. Even the cash payout, estimated at $589 million ahead of Wednesday’s drawing, would be roughly $371 million in this state.
In only five states — Maryland, Minnesota, New Jersey, New York, and Oregon — would your annuitized payout total less than $700 million, according to USA Mega. At the lowest end is New York, where your estimated jackpot would total only about $678.6 million, well below the advertised $1.3 billion.
The annuitized prize in every state would, however, reimburse you more than what it costs to ensure you win the Powerball jackpot.
The interactive map below shows the estimated annuitized payouts and cash prizes for each state for the current Powerball jackpot:
Why does the payout end up coming in well below the advertised jackpot, regardless of where you live? It has to do with the game structure.
As Carolyn Becker, deputy director of public affairs and communications for the California Lottery, previously told Nexstar, the estimated jackpot of $1.3 billion doesn’t actually exist.
“What exists is that lump sum,” she explained. That’s the cash option, which is currently estimated at $589 million.
The cash value listed for the jackpot is, generally, “the amount of money required to be in the jackpot prize pool, on the day of the drawing, to fund the estimated jackpot annuity prize,” Powerball officials explain. So to fund the advertised $1.3 billion jackpot, officials have determined $589 million is necessary to pay the winner the annual payments, if they select the annuitized option.
The annuitized option also relies on interest rates for securities, specifically U.S. Treasury bonds, which are purchased to fund the annuity prize payments.
Though the annuity option will, eventually, end up being a bigger payout than the cash option, most jackpot winners select the lump sum payments. Some financial advisers say that might be a mistake.
It’s also possible the jackpot grows again before Wednesday night’s drawing. Last Thursday, the jackpot sat at an estimated $950 million. Before Saturday night’s drawing, the jackpot had surpassed $1 billion. Only time will tell, though.
Powerball is played in 45 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Drawings are held every Monday, Wednesday, and Saturday at 10:59 p.m. ET, and your odds of landing the jackpot are 1 in 292.2 million.
