Why are lump sum jackpot payouts shrinking?

Reply #8

Rexer90 — Fri, 28 Oct 2022 17:06:18 GMT

That wouldn't work in Califailure. Instead of one check for the full amount you'd just get 5 checks, each for 20% of the prize.

Reply #7

GiveFive — Fri, 28 Oct 2022 12:38:10 GMT

Call me crazy, but I rarely if ever know what the advertised value is or the cash value. That's mostly due to the fact that I don't play MegaMillions or PowerBall very often, and when I do play, I play for a second place win.

I do something that most players think is very unconventional. (Actually most think I'm crazy for doing it). What I do is buy five identical lines with the PowerPlay option added. If I'm lucky enough to match the first five numbers then I'd might win $10 million before... [ More ]

Reply #6

waryman — Fri, 28 Oct 2022 06:58:21 GMT

One observation I have noticed with Powerball, is the overall weekly increase with rollovers is the same with the 3rd drawing added in. The increase in jackpot from Saturday to Monday is always a good bit less than the increase from Wednesday to Saturday. Adding, in the 3rd drawing was just a cash grab to increase revenues without actually increasing the jackpot over a weekly time period. So even though you have more drawings, it does not correspond to a higher jackpot relative to the two drawin... [ More ]

Reply #5

Rexer90 — Fri, 28 Oct 2022 02:54:22 GMT

In California the payout for lump sum after Federal taxes has gone from 42% down to 30

Reply #4

KY Floyd — Sun, 23 Oct 2022 07:00:18 GMT

I would think with interest rates going up the annuity factor would be larger, not smaller.

The annuity factor is larger. Despite what the lotteries advertise, the real jackpot is the cash jackpot and in the unlikely event that a winner decides to take the annuity the cash jackpot will be invested to buy the annuity. The higher interest rates mean the annuity that can be bought with a given amount of cash is bigger.

If you were paying attention on Thursday or Friday you might have seen

Reply #3

Stack47 — Sun, 23 Oct 2022 04:52:46 GMT

Two years ago the interest rate was under 3% and today the fixed rate is almost 7%. Basically it means a much larger return on investments so when the rates go up, the lump-sum payout percentage go down.

Reply #2

cottoneyedjoe — Sat, 22 Oct 2022 17:00:10 GMT

LP made a video about how jackpot cash values and annuities are calculated:

https://www.youtube.com/watch?v=K6bXRVPRo-U

Reply #1

MsBee18 — Sat, 22 Oct 2022 15:48:35 GMT

I noticed that too. The answer in short is rates. When I started playing Powerball and Mega consistently the cash value hovered around 60% +/-. Now it's right at 50%. So we can expect to see higher rollovers when a jackpot isn't won. Bigger rollovers the quicker we see a billion dollar jackpot. Rates are much higher today, than they were say two years ago. The rate hike actually favors a higher starting jackpot of 40 million as oppose to the current 20 million (which is essentially 10 million ca... [ More ]

Why are lump sum jackpot payouts shrinking?

IBelieve2 — Sat, 22 Oct 2022 14:04:50 GMT

Hi,

Any insights why Powerball and Mega Game cash payout amounts keep getting smaller as a percentage of the total jackpot? 12-18 months ago the lump-sum payout percentage was approx 57% of the total jackpot, but it has been gradually shrinking over time. After staying around 53-52% for many months, it's recently dropped to 50%, and in the last few drawings is now 48%. I would think with interest rates going up the annuity factor would be larger, not smaller.

Any insights here would be... [ More ]