Welcome Guest
Log In | Register )
You last visited January 19, 2017, 5:30 am
All times shown are
Eastern Time (GMT-5:00)

Why do you get more with Mega Millions?

Topic closed. 15 replies. Last post 10 years ago by LuckyLilly.

Page 1 of 2
PrintE-mailLink
MissNYC's avatar - diva
Westchester, New York
United States
Member #49345
January 27, 2007
168 Posts
Offline
Posted: June 21, 2007, 11:00 am - IP Logged

Here's a question...when you compare the jackpot analysis for the Mega Millions with Powerball, especially when Powerball is much more (as it is currently) why does the Mega Millions seemingly pay out so much more than Powerball? Currently Powerball is 89 million with a cash payout of 40 mil, while Mega Millions is sitting at 66 million with a cash payout of 37 mil, only 3 million less than Powerball, whose jackpot is over 20 million dollars greater. Does anyone have an explanation? I'm just happy I'm in a mega millions state! I certainly hope one of the two gets real big and exciting again!

"If you just keep believing, that dream that you wish will come true"

Bed

 

    spy153's avatar - maren

    United States
    Member #28409
    December 15, 2005
    1198 Posts
    Offline
    Posted: June 21, 2007, 11:08 am - IP Logged

    I wish I had an answer for you missnyc, I was wondering the same thing myself. Also, why are the payouts so low anyway. Powerball's cash payout is less than half the advertised amount. I wonder how many winners have been so disappointed to hear the news "well, if you take the cash amount, after taxes, you will walk away with only 1/4 the original advertised jackpot?" I have trouble with the fact that over 250.00 a week is cut out of my hubby's check for taxes anyway. I am almost positive I would scream at the fact of having to give them 3/4 of my winnings (millions).

    voir-vous dans mes reves!Cool

      LuckyLilly's avatar - savy chick.png

      United States
      Member #50124
      February 26, 2007
      601 Posts
      Offline
      Posted: June 21, 2007, 11:23 am - IP Logged

      Megamillions is paid out over 26 years, and Powerball over 29 (30 payments).  I guess Megamillions needs more to fund an annuity that is paid out in 4 less years.

        Avatar
        California
        United States
        Member #46824
        October 1, 2006
        270 Posts
        Offline
        Posted: June 21, 2007, 11:53 am - IP Logged

        Megamillions is paid out over 26 years, and Powerball over 29 (30 payments).  I guess Megamillions needs more to fund an annuity that is paid out in 4 less years.

        The other big difference is that Mega Millions is paid out in equal installments where Powerball is paid in graduated installments. 

        While they are similar in that both are both annuities, they are very different in how the payments are structured.

          tnlotto1's avatar - logo
          nashville
          United States
          Member #49896
          February 18, 2007
          1181 Posts
          Offline
          Posted: June 21, 2007, 12:20 pm - IP Logged

          thanks luckylilly and calotteryguy for answering this question i had wanted to know why for along time because i play both powerball and megamillions and it didnt make sense why the cash options worked out that way everytime i compared similar jackpot amounts.

            LuckyLilly's avatar - savy chick.png

            United States
            Member #50124
            February 26, 2007
            601 Posts
            Offline
            Posted: June 21, 2007, 12:24 pm - IP Logged

            thanks luckylilly and calotteryguy for answering this question i had wanted to know why for along time because i play both powerball and megamillions and it didnt make sense why the cash options worked out that way everytime i compared similar jackpot amounts.

            Does the mega jackpot rise more slowly than the powerball?

              Raven62's avatar - binary
              New Jersey
              United States
              Member #17843
              June 28, 2005
              51064 Posts
              Offline
              Posted: June 21, 2007, 12:26 pm - IP Logged

              The Mega Millions jackpot is an estimated 26-year annuity value. When players choose the annuity option for their prize, the state lottery pays the prize out over 26 years by buying U.S. Government Treasury Securities, which earn interest and mature annually over the 26 years. That annual return is the amount the winners receive each year for the 26 year period. With the cash option, the state lottery will take the amount of money that would have been invested and will pay it directly to the winner in one payment.

              All payment options have federal and applicable state taxes deducted from them.

              Additional MM Details

              The Powerball jackpot is an estimated 29-year annuity value. When players choose the annuity option for their prize, the state lottery pays the prize out over 29 years (30 payments) by buying U.S. Government Treasury Securities, which earn interest and mature annually over the 29 years. That annual return is the amount the winners receive each year for the 29 year period. With the cash option, the state lottery will take the amount of money that would have been invested and will pay it directly to the winner in one payment.

              All payment options have federal and applicable state taxes deducted from them.

              Additional PB Details

              A mind once stretched by a new idea never returns to its original dimensions!

                Avatar
                Coastal Georgia
                United States
                Member #2653
                October 30, 2003
                1866 Posts
                Offline
                Posted: June 21, 2007, 1:02 pm - IP Logged

                Does the mega jackpot rise more slowly than the powerball?

                MM seems to increase slower- I think because it is played in 12 states vs. 31 for Powerball...

                 

                                               

                              

                 

                 

                  Avatar
                  California
                  United States
                  Member #46824
                  October 1, 2006
                  270 Posts
                  Offline
                  Posted: June 21, 2007, 2:21 pm - IP Logged

                  Does the mega jackpot rise more slowly than the powerball?

                  Powerball starts at $15 million and goes up a minimum of $5 million per draw. 

                  Mega Millions starts at $12 million.  There is no minimum increase.

                  Usually after 2 draws MM is at around $16 - $17 million, while Powerball is at $20 million.  Mega Millions reaches around $25 Million on the third draw.  Powerball is around $27 million or so.

                  When Powerball reaches a record high (currently $365 million) it will only grow in $25 million increments.  Mega Millions has no such limitation.

                    Todd's avatar - Cylon 2.gif
                    Chief Bottle Washer
                    New Jersey
                    United States
                    Member #1
                    May 31, 2000
                    23349 Posts
                    Offline
                    Posted: June 21, 2007, 3:14 pm - IP Logged

                    <Moved to Jackpot Games forum>

                    Please post in the appropriate forum ... thank you.

                      Avatar
                      New Jersey
                      United States
                      Member #21206
                      September 4, 2005
                      949 Posts
                      Offline
                      Posted: June 21, 2007, 3:43 pm - IP Logged

                      It is only useful to compare the cash value.  This is what the lottery is actually worth.  There are simply two different investing strategies used to inflate the jackpot for advertising purposes.

                      Which lottery is a "better bet" depends on jackpot size.    For a powerball and MM at the same cash value, the PB is a "better bet" since the odds are better for PB, although still astronomical.

                      The "expectation value" is the ratio of the potential payoff to the odds.  The higher the expectation value, the better the bet.    A bet is considered a good bet when it has an expectation value of 1 or higher.

                      I used to post the expectation values here but stopped doing it.

                      However I will post it now from the spreadsheet by which I follow it:

                       

                       

                      Prize Values
                      MegaMillions Cash Value$37,300,000
                      MegaMillions Annuity Value$66,000,000
                      Powerball Cash Value$40,400,000
                      Powerball Annuity Value$89,000,000
                      Type of OutcomeProbability
                      Powerball Rolls.86.35%
                      Megamillions Rolls90.08%
                      Both Roll77.78%
                      Powerball Rolls, MM won8.57%
                      MM Rolls, Powerball won.12.30%
                      Both won.1.35%
                      Either, but not both, won20.87%
                      Type of Outcome Calculated From Mathematical Models of Jackpot Behavior on current run
                      MM exceeds 100M annuity71.08%
                      MM exceeds 200M annuity23.69%
                      MM exceeds 300M annuity5.80%
                      PB exceeds 100M annuity75.00%
                      PB exceeds 200M annuity30.55%
                      PB exceeds 300M annuity8.65%
                      Neither exceeds 300M annuity86.05%
                      Either exceeds 300M14.45%
                      Both exceed 300M0.50%
                      Expectation Value TypeValue
                      Pretax Powerball cash basis0.464
                      Pretax Megamillions cash basis0.389
                        LuckyLilly's avatar - savy chick.png

                        United States
                        Member #50124
                        February 26, 2007
                        601 Posts
                        Offline
                        Posted: June 21, 2007, 4:27 pm - IP Logged

                        My head hurts.  Skeptical

                          weshar75's avatar - Lottery-042.jpg
                          Mcminnville, Oregon
                          United States
                          Member #3013
                          December 13, 2003
                          3090 Posts
                          Offline
                          Posted: June 21, 2007, 5:23 pm - IP Logged

                          I only play Powerball for the cash option so the annuity value does not concern me.  When I can I play Mega Millions for the cash value too.-weshar75

                            justxploring's avatar - villiarna
                            Wandering Aimlessly
                            United States
                            Member #25360
                            November 5, 2005
                            4461 Posts
                            Offline
                            Posted: June 21, 2007, 5:35 pm - IP Logged

                            My head hurts.  Skeptical

                            Take 2 aspirins and a jackpot.  Big Grin

                              Avatar
                              New Jersey
                              United States
                              Member #21206
                              September 4, 2005
                              949 Posts
                              Offline
                              Posted: June 21, 2007, 7:23 pm - IP Logged

                              My head hurts.  Skeptical

                              Sorry.  I didn't mean to hurt you.