Topline
The Powerball jackpot swelled to an estimated $725 million on Tuesday, the seventh largest in its history, according to the lottery, though the winner would take home significantly less after paying required taxes.
The Powerball reached $725 million for Wednesday’s drawing.
Key Facts
The winner—facing odds of one in 292.2 million—has the option to receive the $725 million in 30 annual installments over 29 years, or as an up-front, pretax lump sum of $366.2 million in cash.
A mandatory federal tax withholding would reduce the lump sum earnings to $278.3 million, while a federal marginal rate of up to 37%—depending on the winner’s taxable income—could reduce it to as low as $175.3 million.
The jackpot previously eclipsed the $700 million mark in February, when a $754.6 million jackpot—the fifth largest ever—was drawn in Washington, according to the lottery.
Two tickets won at least $1 million in Monday’s drawing, including one ticket in Iowa that won $2 million, while 28 other tickets won $50,000 prizes and 12 won $100,000.
The Powerball will hold its next drawing on Wednesday at 11 p.m. EDT.
Tangent
Lottery winnings are also subject to state taxes, from as low as 2.5% in Arizona—an estimated $9.1 million—to 10.9% in New York, an estimated $39.9 million. Eight states do not require additional taxes, including California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
Big Number
1.5 million. That’s how many winning tickets were sold for Monday’s drawing, which won a combined total of $14.1 million, according to the lottery.
Key Background
The odds of winning the Powerball jackpot decreased from one in about 175.2 million to one in 292.2 million in 2015, when the lottery increased the pool of white ball numbers from 59 to 69 while decreasing the pool of Powerball numbers from 35 to 26. The change has resulted in the lottery reaching record-breaking jackpots several times over the last two years, including a $2.04 billion jackpot won in November, the largest ever. The Mega Millions lottery adopted similar changes, increasing its jackpot odds from one in 258.9 million to one in 302.6 million. Two Powerball jackpots have eclipsed the $1 billion mark since the changes were implemented, while Mega Millions has reached the mark four times, including a $1.35 billion jackpot won in January.
Further Reading
Powerball Swells To $700 Million—Here’s Why There Have Been So Many Massive Jackpots Recently (Forbes)
