The latest Powerball jackpot is currently sitting at just over $400 million and everyone is wondering whether this could be the start of another record-breaking jackpot. Earlier this year, the Powerball lottery made history when the jackpot prize reached $1.5 billion.
This secured it the title of the largest jackpot in history.
Draws take place twice a week on a Wednesday and Saturday night. But with no winners for the past 19 draws, the jackpot has continued to swell and everyone is waiting to see if it will keep climbing. January’s record jackpot could be attributed to a number of factors. One of the more controversial ones being the change in the way the game is played.
At the end of last year, the field of numbers was increased from 59 to 69. At the same time, the range of numbers for the red ball was reduced from 35 to 26. The move was made by the state Gaming Commission to revive sales of lottery tickets which had slumped significantly. This small change increased the odds of players winning one of the lesser prizes.
But it also meant that it would be a little harder to get the right combination to win the big jackpot. As the prize rolled over, it sparked a frenzy among the general public. Suddenly everyone was out to secure a ticket and with that, the chance to win the biggest jackpot in lottery history. And now the same thing could happen again.
But how likely is it that the current jackpot could reach that record a second time? A lot depends on how many people buy tickets. The lottery jackpot figures posted on billboards are just an estimate. The prize money is based on ticket sales and a percentage of each ticket sold goes into a pool. The prize money is split evenly if there are multiple winners. So as ticket sales increase, so does the final prize.
It’s interesting to note that Americans spend about $70 billion a year on lottery tickets. While between 60 and 70 percent of this amount is spent on scratch-and-win type tickets, the rest is spent on big games such as the Powerball. So it’s not unthinkable for a single jackpot to reach the $1 billion mark.
Of course this isn’t the final figure that a winner would walk away with. Federal taxes of 25% are automatically withheld on any lottery winnings over $5000. And foreigners will see 30% of their winnings go to the IRS. Then there are the state taxes that have to be paid as lottery winnings are considered a form of income. Depending on where you in the US you reside, this could vary from nothing at all to 8.3% if you’re a New Yorker.
You may also not know that lottery winners have two options when it comes to claiming their prize. They can opt to take the lump sum and pay all their taxes up front. Or, they could receive a smaller lump sum (after federal tax has been deducted) and receive an annual annuity for the next 29 years. Unfortunately, this doesn’t mean you can dodge tax on your winnings. Even if you do receive a yearly pay out with interest, your earnings are still subject to income tax.
In fact, most experts would advise you to take the big cash prize and pay your taxes up front. This way your winnings won’t be subject to a possible rise in income tax. On a jackpot of $400 million, it’s still worth playing the Powerball lottery. Once the taxman has taken his due you’ll still have a lot of change in your pocket.
But the signs are promising that the current jackpot could grow to $1 billion for a second time. The fact that it has already happened once before may be actually be in its favour. There’s no doubt that the buzz created by this historical jackpot sparked fresh interest in the Powerball lottery. The reason why the jackpot has already reached $400 million so quickly is probably due to the fact that more people are buying tickets again. And because it’s now a little harder to win the main prize, we could be in for a few more draws without a winner which will only push that jackpot higher.
While your odds of winning the Powerball still stand at 1 in 292 million, the good news is that this doesn’t change if more people play. The only things that does change is the amount of money you could win. So do yourself a favour and buy lottery tickets online for the next draw before the rush starts again. There’s no reason why you can’t be the next Powerball winner.