No one bagged Monday night’s enormous $2.04 billion Powerball jackpot, sending the prize soaring to a record-breaking $2.3 billion for the next draw, the lottery reportedly said, though any lucky winner will face a hefty tax bill and take home much less than the headline prize—here’s how much.
Powerball lottery winners can choose between receiving the full prize as an annuity—a series of 30 payments paid over 29 years—or as a single lump sum payment.
The single payment is less than the advertised jackpot, which emphasizes the value of the annuity prize, but is the most popular option among winners and Wednesday’s cash prize is worth an estimated $1.12 billion.
A mandatory federal tax withholding of 24% on gambling winnings would immediately reduce that amount by $269 million for a single prize winner, who would take home $851 million, though the taxman is far from finished.
The top federal marginal rate is 37%, meaning a single taxpayer with no other income, dependents or tax deductions like charitable giving would need to set aside an additional $145 million for taxes and can expect the overall prize to be whittled down to $706 million.
State and city taxes, depending on where the winner lives and where they bought the winning ticket, are very likely to eat into this sum further.
A winner opting for the annuity payment is set to receive around $77 million a year, though this would be reduced to $49 million by federal taxes and would likely be cut further by state and city taxes.
The grand prizes up for grabs in lottery jackpots have soared in recent years. Huge jackpots are a feature, not a bug, of lottery design and the rules are structured to make it easier to win but harder to win big. The Powerball has now been drawn 41 times without a jackpot winner, the last of which was in August, the lottery said, a record for the longest run. Wednesday’s upcoming draw marks the largest jackpot in its history and the largest lottery prize in U.S. history. It builds on the record set at Monday’s draw, which the lottery said grew beyond its already record-breaking level after a surge in ticket sales.
The odds of winning the lottery are slim, around 1 in 292.2 million, according to Powerball. They are not in the players’ favor. By comparison, the odds of being struck by lightning in a given year are less than 1 in 1 million, according to the CDC, and the odds of being attacked and killed by a shark are around 1 in 4.3 million, according to Florida Museum’s International Shark Attack File.
$1.59 billion. That’s the value of Powerball’s largest jackpot before the current streak reached new heights. The prize was shared between three winners in California, Florida and Tennessee in January 2016. The lottery said this prize held the world record for the largest lottery jackpot.
What To Watch For
Wednesday’s Powerball drawing is set to broadcast live at 10:59 p.m. ET from the Florida Lottery studio. The drawings are also live streamed online at Powerball.com.
What We Don’t Know
There is no limit to how high the jackpot can go, Powerball said, adding that the pot will keep rolling over until somebody wins.
The stellar jackpot has encouraged even more people than usual to try their luck. The lottery said there have been reports of residents from non-participating states—Utah, Nevada, Hawaii, Alaska and Alabama—traveling across state lines to enter. The high demand caused issues with one lottery processing its sales and delayed the draw by several hours. The prize has even garnered the attention of international gamblers, the lottery said, and hundreds of thousands of Australians reportedly bought tickets to enter Monday’s draw.