Topline
The Powerball jackpot rose to $600 million—the second biggest lottery prize of the year so far—after no tickets matched all six numbers drawn on Wednesday night, although the eventual winner will take home a much smaller payout after taxes and deductions.
Key Facts
The six numbers drawn on Wednesday night were 4, 5, 22, 50, 58 and Red Powerball 1.
If a winner emerges in the next draw, they can choose between taking the $600 million split across 30 annual installments or a one-time cash prize of $266.4 million—the preferred option for most winners.
If the lump-sum payout is chosen, the winnings will first drop to around $202.5 million after a mandatory 24% federal withholding tax is applied.
The winner would likely face a federal marginal rate as high as 37%, depending on their taxable income, further reducing the winnings to around $167.8 million.
If the installment option is chosen, the winner’s annual payouts of $20 million will drop to around $12.6 million after the 37% federal marginal rate is applied.
Depending on where they live, the winner could face additional taxes, as some states, such as New York, tax lottery winnings at 10.9%, while others, such as Texas, Florida, and California, don’t.
tangent
Wednesday night’s draw was the first time the Powerball jackpot expanded to include ticket buyers from the U.K. Lottery officials in the U.S. have said the expansion of the game to include British ticket buyers will lead to “faster-growing jackpots,” as the additional ticket sales will contribute to the prize fund. A key difference for U.K. players is that they won’t have the option to choose a lump-sum payout and will only receive the jackpot split across 30 annual payments.
How Much would a U.K. Winner take Home?
The advertised jackpot prize for U.K. players is £322 million ($431 million). This appears significantly lower than the $600 million U.S. prize, but according to the U.K. National Lottery this takes into account the estimated amount a winner would receive over a 30-year period, “after exchange rates and UK tax requirements have been taken into account.”
What To Watch For?
The next Powerball drawing is set to take place on Saturday night. Before that, on Friday night, Mega Millions is set to hold its next drawing for a jackpot that has surged to $743 million.
big number
1-in-292.2 million. Those are the astronomical odds a Powerball ticket buyer will need to overcome to win the jackpot. These odds remain unchanged despite the addition of British ticket buyers. This is even worse than the Mega Millions jackpot’s already poor odds of 1-in-290.4 million.
key background
This is only the second lottery prize to cross the $600 million mark so far this year, behind only the ongoing Mega Millions jackpot. Of the prizes that have been claimed so far, the biggest of the year is a $533 million jackpot won by a Mega Millions ticket buyer from Illinois in March. The biggest completed Powerball jackpot of the year so far is a $250.8 million prize won by a lottery player from Arkansas.
further reading
Powerball Jackpots Are About To Grow Faster—Here’s Why (Forbes)
Mega Millions Nears $750 Million—Here’s What The Winner Could Take Home (Forbes)