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Powerball lottery jackpot raised to $101 million

Topic closed. 15 replies. Last post 11 years ago by KY Floyd.

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NY
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Member #23835
October 16, 2005
3474 Posts
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Posted: March 24, 2006, 4:46 pm - IP Logged

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.


 

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KY Floyd - Thanks so much for your thorough explanation.  I really appreciate your posts.  It is great to have someone give complete details for those of us who have been only casual players and therefore aren't in the know.  And explaining without talking down to us, too, I might add.

You're welcome, and thanks for the compliment. Especially since it's still fairly new and has only come into play twice so far. I expect that a lot of people aren't familiar with the cap and how it works, especially things like dvdiva expecting that if it goes beyond 365 it will automatically be 390 . I now that when I first read about the 2nd place bonus prize I didn't catch that it would only pay out when there was a jackpot winner.

I know there's some truth to the line that lotteries are a tax on people who are bad at math, but I figure most players (including the ones who really are bad at math)  understand the basics, though being good at math doesn't make it much easier to really appreciate what 150 million to 1 odds really are. In terms of themath playing the lottery may not make sense, but I figure we're all entitled to make our own choices. We should be able to make those choices with a good understanding, though. The official lottery websites don't always provide as much info as they could (cash values are one of my pet peeves), which is why it's useful  tohave sites like this for players to exchange info, tips, and opinions.