Powerball explainer: A look at $1.9 billion jackpot, how it grew so large

DES MOINES, Iowa– Millions of lottery players across the country will try their luck again Monday night as they compete for an estimated $1.9 billion Powerball jackpot, eclipsing all previous prizes by hundreds of millions of dollars.

The jackpot is almost $400 million bigger than the previous record jackpot and will keep growing until someone wins the prize. Only four previous jackpots have surpassed $1 billion, but none come close to the current prize, which started at $20 million on August 6th and has grown in size over three months of no winnings.

A winner who elects a lump sum payment would receive an estimated $929.1 million, with the $1.9 billion paid annually over 29 years for a winner who elects an annuity.

Even as more people drawn to the huge prize lose $2 on a Powerball ticket, the game’s ultra-long odds of 1 in 292.2 million means there’s still a decent chance of another draw passes without anyone winning the grand prize. That would take the jackpot for Wednesday’s draw to over $2 billion.

WHY SO LONG WITHOUT A WINNER?

Those spending $2 on a Powerball ticket might wonder if something is wrong when 40 draws go by without a jackpot winner, but that’s how the game is designed. At odds of 1 in 292 million, this means that until a growing jackpot attracts more players, it’s unlikely anyone will win the prize. And more ticket sales mean the lottery can raise more money for public programs, which is the point of state lotteries. Still, it’s been an awfully long time without a jackpot, and if there’s no winner on Monday night, a new record has been set: 41 draws without anyone matching all six numbers.

LOTS OF PEOPLE NEED TO PLAY NOW, RIGHT?

Yes and no. Many, many more people are buying tickets now that the jackpot has reached nearly $2 billion. This is evident from the fact that when the jackpot started at $20 million in the summer, players only bought enough tickets to cover less than 10% of the 292.2 million possible number combinations. By Saturday night’s draw, that was up to 62%, so millions and millions of people are playing. However, that percentage is still below the 88.6% coverage achieved in the previous record jackpot in 2016. And if 38% of the possible number combinations are not covered, chances are there is no winner.

Players can choose the numbers themselves, but the overwhelming majority let a machine pick the numbers at random.

That’s not the case with George Pagen of Brooklyn, New York, who is always picking his numbers.

“I can’t let the machine choose for me,” he said. “I have numbers in my head and I will win it. I will win it and share it with all my friends and family and everyone.”

WILL THE LAST WINNER REALLY GET $1.9 BILLION?

Shame on the poor Powerball winner, because the lucky ticket holder won’t see anything close to $1.9 billion. The only question is how much less.

First, this $1.9 billion prize is for winners who choose to pay by an annuity that sends a check annually for 29 years, with a 5% annual increase. But almost no winners take retirement and opt for cash instead. For Monday night’s draw, the cash prize would be $929.1 million, or less than half of annual earnings.

Given the difference between the two pricing options, Daniel Law of Brooklyn, New York said he would consult a tax attorney if he won.

“We would figure out which is the better deal,” Law said of buying tickets at a liquor store. “The annuity might be good because it would keep us from spending money, but it’s pretty difficult to spend $2 billion at once.”

Larry Evans, who bought Powerball tickets in Chicago, agreed he needed to hire a “team of people” to manage his finances. He noted that it might be expensive, “but it doesn’t make a difference because I could afford to pay the team.”

However the winners are paid, federal taxes would take an extra bite, reducing the payout by more than a third, and many states tax lottery winnings so that would eat into the prize as well.

The gap between annuity and cash prices has widened recently because inflation has led to higher interest rates, meaning the money invested in annuity can grow.

DO I HAVE A BETTER CHANCE OF WINNING IF I BUY MORE TICKETS?

Yes, but your chances of winning will not be significantly improved. Think of it this way, if you buy a ticket you have a 1 in 292.2 million chance of winning the jackpot. If you spend $10 on five combinations of numbers, your chances are better, but at 5 in 292.2 million, you’re still almost certainly not going to hit the jackpot. The same is true if you spend $100. Lottery officials say that the average player buys two or three tickets, meaning they’re putting money towards a dream with very little chance of it paying off in a rich reality.

WHERE IS POWERBALL PLAYED?

Powerball is played in 45 states, as well as in Washington, DC, Puerto Rico and the US Virgin Islands.

Copyright © 2022 by The Associated Press. All rights reserved.

https://6abc.com/powerball-explainer-jackpot-lottery/12428529/ Powerball explainer: A look at $1.9 billion jackpot, how it grew so large

Alley Einstein

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