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VIDEO: How are lottery jackpots calculated?

Apr 29, 2022, 6:00 pm

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By Kate Northrop

MARTINSVILLE, N.J. — Mega Millions and Powerball are the two biggest U.S. multi-state lottery games that offer players across the country the largest prizes imaginable, routinely holding the record for the largest jackpots in the world.

But how do these jackpots achieve such historically high figures? What causes the jackpot to grow faster for some drawings? Why is the cash value different than the annuity, and why is it always a different percentage of the annuity? Perhaps you might have even noticed that many times the jackpot changes right after the drawing takes place.

These are all questions we've heard from players time and time again. Our latest video aims to clear the air and explain just how these numbers are calculated with every draw.

WATCH: How are lottery jackpots calculated?

There are several moving parts that determine the size of the advertised prize as well as how much a player gets when they win the lottery. If you've ever wondered where these absurdly high amounts of cash seem to magically appear from, this is the video for you.

For example, many players often think of the cash option as roughly half the annuity prize, but did you know that the annuity prize is actually based on the cash option itself?

In our latest video, we answer these questions and break down how lotteries quickly determine the next jackpot prize immediately following a drawing. To watch, visit Lottery Post's official YouTube channel, and feel free to leave a comment under the video about what other topics you think we should cover next.

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10 comments. Last comment 19 days ago by Stat$talker.
Page 1 of 1
sully16's avatar - sharan
25
Ringleader
Michigan
United States
Member #81738
October 28, 2009
98016 Posts
Offline

Thank you Kate, very informative video. Cheers

Happy National Memo Day! Type

    TheMeatman2005's avatar - lightening
    Brooklyn, NY
    United States
    Member #169716
    October 29, 2015
    1558 Posts
    Offline

    Thanks Kate! Thumbs Up

    The Meatman 🥩🍗🍔🍖🍤🌭

    “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

    Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

      Think's avatar - lightbulb
      Marquette, MI
      United States
      Member #20540
      August 20, 2005
      1016 Posts
      Offline

      Wow, I did not realize that a lot of people did not know this about the draw games already.

      What has me confounded is the changing cash amounts on the scratch tickets.  Usually, here, they are paid out by annuity and the cash amount has remained fixed for long periods of time.  First $1,000,000 was $654,266 cash then, for the longest time it was $634,517 and recently the payout was increased to about $693,250.  I have been reading the winner announcements and they announced a $20 winner as taking "about" $1,300,000 cash then just today, on a newer $20 ticket Michigan announced that the winner took "about" $1,200,000 cash (both for $2mil annuity prizes).  I assumed that the cash amount was set when the ticket came out and didn't change.  Both tickets were introduced close enough to each other that the interest rates really hadn't changed.  Now I am wondering if they change the top cash prize payouts on the fly.

      I don't want to buy them anymore because I don't understand what is going on.  Ironically I always understood the draw game jackpots but the cash amounts on the scratchers have me confuzzled.

      I better put this in my signature before the ministry of disinformation bans it!  I'd tweet it but I have never had a twitter or facebook account (and never will)

      "Democracy Dies In Darkness" recognizes that a democracy cannot survive and thrive without an electorate informed with facts and truth by a free and independent press.

      When government or corporate interests try to control or intimidate the media for their own purposes, it is the first steps toward a totalitarian or fascist state.

      Paul Ivice

        Avatar
        Kentucky
        United States
        Member #32651
        February 14, 2006
        9573 Posts
        Offline

        Learned something new!

        And nice job!

        "Let's go Darwin"

          Avatar
          Gallatin Tennesee
          United States
          Member #194096
          November 29, 2018
          156 Posts
          Offline

          Thank you Kate........I learned more from your 12 minute video than I've learned from 12 years of playing the lottery. You have a great style of presentation. You manage to keep the viewer interested and comfortable, but never bored.

          US FlagLurking

          Success is not final, failure is not fatal, it is the courage to continue that counts.

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            Simpsonville
            United States
            Member #163182
            January 22, 2015
            2878 Posts
            Offline

            Very well presented and learned quite a bit about lotteries.

             

            For one winner in CA it seems due to their pari-mutuel rules, that all secondary prizes sometimes with nice payouts.   For instance secondary prize 5 numbers on MM is set @ $5,834,633 which is nice for ONE winner.  Grant it doesn't affect me but for the life of me do not comprehend why the CA legislatures don't allow Powerplay and or Megaplier!! 

              Todd's avatar - Cylon 200.jpg
              50
              Chief Bottle Washer
              New Jersey
              United States
              Member #1
              May 31, 2000
              26750 Posts
              Online

              Very well presented and learned quite a bit about lotteries.

               

              For one winner in CA it seems due to their pari-mutuel rules, that all secondary prizes sometimes with nice payouts.   For instance secondary prize 5 numbers on MM is set @ $5,834,633 which is nice for ONE winner.  Grant it doesn't affect me but for the life of me do not comprehend why the CA legislatures don't allow Powerplay and or Megaplier!! 

              California cannot add Power Play or Megaplier because those options represent fixed prize multipliers, which run contrary to state law that requires all lottery prizes to be paid out in a pari-mutuel formula.

                haymaker's avatar - Lottery-012.jpg
                Egg Harbor twp.south Jersey shore
                United States
                Member #112963
                June 29, 2011
                4156 Posts
                Offline

                Never thought about the C/O being roughly 1/2 the ann. but I do divide the C/O by 2 to roughly figure the taxes I'll pay in Jersey + fed.

                Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

                  rdgrnr's avatar - nw barkeep.jpg
                  100
                  Grand High Exalted Mystic Ruler
                  The Hall Of The Mountain Kings Tennessee
                  United States
                  Member #73902
                  April 28, 2009
                  15286 Posts
                  Offline

                  That's the whole nine yards there, Kate.  Thumbs Up

                    Stat$talker's avatar - animated sphere.gif
                    700 light yrs West of Milky Way Galaxy's Center
                    United States
                    Member #200642
                    September 1, 2019
                    2454 Posts
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                    Thank you Kate, very informative video. Cheers

                                                   I Agree!

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