On what is the cap based? How is it determined? I didn't even realize there was a cap until I started reading about it on LotteryPost in the past month.
The cap comes into play whenever the annuity jackpot reaches a previous PB jackpot record. It was enacted about a year and half ago, at which time the highest anuity jackpot that PB had offered was the $315 million that Jack Whittaker took as a cash prize. When PB reached $315 million again the cap came into play for the first time, resulting in a jackpot of $340 million. The recent $365 million jackpot was the second time the cap came into play, when the jackpot again reached the $340 million mark.
dvdiva's statement is incorrect. The cap is the maximum amount by which the annuity jackpot can increase, which is $25 million, not the amount of the resulting jackpot. That increase could be limited by the cap on the rollover or by actual sales, which means it can be anything between 365 and 390. Based on previous sales, if an intermediate annuity jackpot is in the $270 to 290 million range we can expect that a subsequent draw will mean about $40 to 50 million cash for the jackpot prize pool, which is enough to increase the annuity value by about $80 to 100 million. Depending on the exact value of the intermediate jackpot, actual sales could push the subsequent annuity value to just under $365 million, slightly more than $365 million, or any amount up to $390 million. For example, an increase of $95 million on a jackpot of $275 million would make the next jackpot $370 million, and if there was no winner the cap would come into play on the next rollover and result in a jackpot of $395 million.
While the cap on the rollover is fixed and applies to the anuity value, the increase in the cash value will vary with interest rates. Currently it takes about $12 million in cash for $25 million in annuity value. When the cap is in effect any proceeds in excess of the $12 million that would normally go into the jackpot prize pool go into a bonus prize pool for second place. The bonus will only be paid to second place winners when the jackpot is won. The bonus pool will rollover if there is no winner, and the jackpot would also increase by a maximum of $25 million. FWIW, if the bonus pool has $30 million or more power play is a real sucker's bet.