By Todd Northrop
It will probably be the merriest Christmas one New Yorker has ever known.
That's because one lucky lottery player from New York has won the Powerball jackpot in the Christmas drawing Saturday evening.
It will likely be the furthest thing from a "Silent Night" in the winner's household, as they will either win a $48.8 million annuity jackpot, or a $23.1 million lump-sum cash option.
Of course, the federal government and the state of New York will be also singing Joy to the World, as they will reap at least 25% and 8.97%, respectively, of the grand prize in taxes.
In addition to the jackpot winner, another 5 lucky players matched the first 5 numbers (but not the Powerball) for a $200,000 prize: 1 from Illinois, 1 from Louisiana (with Power Play), 1 from New York, 1 from North Dakota (with Power Play), and 1 from Pennsylvania (with Power Play).
The three second-prize winners who spent an additional $1 to purchase the Power Play option will have their prize automatically increased to a cool $1 million.
The Christmas Powerball winning numbers are 1, 17, 38, 50, and 52, and the Powerball number is 24. The Power Play number is 2.
I hope it is someone young like me.
Congrats to them, wonder if it was a stocking stuffer. I only put $1 into this drawing, gonna use my normal PB budget towards MegaMillions.
So the odds are really 1 in 195,249,054? No wonder there isn't a Nobel prize for mathematicians, hehe. Happy holidays to the winner and all LP guys, wish you good luck.
wow, how cool is that to win on Christmas. congrats to the winners.
So happy for them. Its a blessing I love to hear about people winning I know one day soon it will be me.
And it WASN'T some one from NY City!!! YEA!!!!
Wow and I just checked the website turns out the Jackpot winner used the quick pick option to let the computer select the number for them.Congrads to whoever it was on the big win.
I played quick pick last night too with powerplay and it didnt match a single number for me.
My #'s were 19, 22, 35, 53, 55, and powerball 07
Genome, why do you hope the person is someone young like you? If you are young and in excellent health, you have plenty of time to make your financial mark in life -- and that is called -- patience. Perhaps, I can understand someone who is older: they have paid their dues, working, and their longevity may or may not be as long as yours.
Often, I read comments from some of the young posters over the years, expressing their disdain if someone older wins: it is as if the young posters deserve winning more than the older ones. Of course, everyone deserves to win, but age has absolutely nothing to do with winning.
Finally, young posters, be glad you are young and playing the lottery as you may never know when your ship may come in.
Yeah you're right it does seem more fair for someone older to win PB or MM. Seeing someone around my age just gives me hope that I could win a jackpot pretty soon.
Also just by the law of averages it's bound to happen much more often. I'm mid-20s myself and there's not really anyone else I know that plays the lottery. One of my friends will pick one or two up every now and then (and usually only if he's with me when I'm buying mine) but other than that there's nobody else.
I like seeing young (20s-30s) people win just because it's something different and not just "well we like our life now so we're just going to pay off everything and put the rest in the bank". And that's not saying they should blow everything, just that it'd be nice to hear they were going to go and live it up for a few days to really celebrate. Don't get me wrong, I'm happy for anyone that wins (and I hope I can be apart of that special group one day) but I like hearing more about younger people winning than the older crowd.
I wonder if this winner had written a convincing letter to Santa Claus.
Does anyone know the rationale that lotteries use to justify only paying out approximately one half of jackpot amounts when the winner chooses a lump sum? In terms of the effects of compound interest on the present and future value of the winnings, it seems to me they have it backwards.
Since lottery tickets are only sold for cash, on the day of any given drawing, the full amount of the sale proceeeds should be on deposit in the respective state's bank. Initially, approximately 1/2 is held back as the state's cut to fund their various projects. I understand this. What I don't understand is what logic supports holding back 1/2 of what's left when the winner chooses the cash option. It would make more sense to me if cash option winners received the full (1/2) of sales and annuity winners received an even larger amount over the years to reflect the INTEREST the state earns by holding the [declining] principal over those years.
Thoughts?
--Jimmy4164
P.S. A cynical answer might just be that they do it this way BECAUSE THEY CAN, but I've already thought of that one!
"It would make more sense to me if cash option winners received the full (1/2) of sales and annuity winners received an even larger amount"
Isn't that how it is though? If you choose annuity you get an even larger amount than the people who chose lump sum (who do get the full amount of the money). I don't know, that's the way I see it.
First of all, I need to correct my original statement. The Jackpot part of the Powerball payback is not really 1/2 of sales, it is more like 1/3 of sales. The other 17% (or so) is paid back to the winners of the lesser prizes.
You're correct that annuity recipients DO get more than the lump sum people, over 20 or 30 years. But the lump sum is NOT the full 1/3 of sales, as I think it should be. It is 1/2 of 1/3 of sales. Check some of the results and I think you'll see that the lump sum is always about 1/2 of the announced "Jackpot," and the "Jackpot" is about 1/3 of all the money taken in selling Powerball tickets since the last jackpot payout. My estimates here might not be precisely correct, but I think they're in the ballpark.
I think we both just have different thoughts on this. I really don't see a problem with the announced jackpot being about twice as much as the lump sum as they tell you it's the annuity amount (at least at the places I see the jackpot amounts) and also because any jackpot win would be enough for me so don't see an issue with jackpots not being high enough.
And the NY and Federal Tax Grinch's get their rotten hands on the winner's money!
Jackpots should be tax free, then the economy would actually be stimulated!
Congrats to the winner!
this christmass gift could not have come at a better time than this.
Concrads to NY and their first powerball win,After spending $200 a week faithfully on mega million or powerball for the past 5years maybe i can win a dollar in this sorry state i love and live in!
The lump sum payout is simply the present value of an future annuity. Generally, you could take the lump sum and give it to someplace like Peachtree. Then they could structure the lump sum into an annuity if you should change your mind.
One thing I agree on, there is not much transparecy with the present value calculation done by the lotteries. Interest rates are so low right now that you would think the lump sum payouts would be increased from years past
You have to look at how the lottery invests though in comparison to how we would. They have companies bidding over who gets to be in charge of the investing which keeps the interest rates higher than you will find most anywhere else (at least during these times).
Batiatus,
We're not too many "pages" away from each other on this. Take a rough hewn example:
$100,000,000 Total Sales since last jackpot payoff
$17,000,000 Payouts for Powerball, 1WB + PB, 2WB + PB,,,,, 5WB
$50,000,000 Lottery's Advertized "Cut"
$33,000,000 Announced "Jackpot" Amount
Here is where we differ...
You accept the Lottery's calculation that allows them to get away with giving [about] $16,500,000 to some place like Peachtree in exchange for them guaranteeing the winner $33M over the next 20 years. And with the same rationale offering a cash option winner a lump sum of $16.5M. I don't accept this! In both cases, Jackpot winners are only getting 1/2 of what they should receive. If the Lottery's "cut" is going to be 66.5% of their gross sales, then they should be forced to advertize this fact, rather than the 50% they claim.
Another way to look at this is: Since all sales are CASH, when they announce a "Jackpot" of $33M, how can they support the claim that a cash option winner is only entitled to $16.5M?
--Jimmy4164
I used to wish that some young man would win the PA Lottery in the 1970's .............
............ now I am hoping that some old man has a Happy New Year's Gift of about $80,000,000 after taxes Tonite!
that Grey Violet Bentley that I like is still available for one grand mid-life crisis!
Batiatus,
After a second reading I see that in my earlier response to your post I misstated your position. I said that you agree with the lottery's calculation, when clearly, you are at least questioning it when you say, "there is not much transparecy with the present value calculation done by the lotteries."
Sorry about that.
I hope you'll continue in this discussion at:
https://www.lotterypost.com/thread/223792/1894878
--Jimmy4164
But the lump sum is NOT the full 1/3 of sales, as I think it should be.
Have you discussed your concerns with the PowerBall people? They may have a reasonable explanation.
Jimmy, and others who like to run calculations with your calculator ... if you are referring to Powerball, the annuity payments are completed at the 30th payment (over 29 years time). Were you aware that the last time that a jackpot winner chose the ANNUITY option was October 10, 2007? That is a long time, and should make you think!
Most of these jackpot winning CASH OPTION recipients (even after paying the apx. 35% federal taxes plus their state's taxes) are able to obtain the SAME amount of money -- only within 12 years -- as the originally advertised annuity jackpot the date they won. They simply performed weekly/monthly invest or stay put, in the safest options trading with as close to 90% insurance and also other stock ownership investments (and several FDIC insured accounts under $200K would only be used for, say $1,500,000 dollars total of their windfall!). You must understand that all winners almost instantly become 'part-time weekly investors'. It's an empowering job to have though, and even if a winner was forced to take the "annuity" payments, they'd still have to become the same type of 'part-time weekly investor.' The difference is that: the winner would be divvying less money into less accounts, would not be able to gift much money to others, and they probably would be forced to ONLY live off of their interest for at least the first 10 years, depending on how well their options trading performed.
Lastly, another reason that almost 100% of people choose the CASH OPTION is because they don't want the lottery headquarters office and database to have their new checking account and routing # for the annual electronic transfers nor the new address they move to after they have claimed the checking account and old address on their "claim form." After all, would you want the lottery headquarters, journalists, news wire service staffers, hackers, etc. easily accessing your bank information, address, city, and or state of residence for the following 29 years?
Congratulations to this CHRISTMAS day, net multi-million dollar Powerball lottery jackpot winning ticket holder or holders!!! A tidy toasty and warm winter win!
HaveABall,
There isn't much I can disagree with in your post, but it doesn't address my original concern. Using my example from above, you're telling us that a cash option winner will eventually receive the entire $33M after 12 years of smart investing. My question is WHY should a Jackpot winner have to wait at all, and be a savvy investor to boot, to be paid THE MONEY THAT WAS JUST RECENTLY DEPOSITED IN A BANK FROM PROCEEDS OF CASH TICKET SALES!
--Jimmy4164
p.s. I hope there weren't any jackpot winners who bought up a lot of high priced real estate right before the bubble burst a couple years ago!
I doubt if their explanation, if they would be willing to respond with one, would be any more than a run around to cover the fact that they are simply withholding 66.5% of ticket sales, and not 50%. Have you ever called the posted phone number of a lottery commission office? My experience calling PA regarding the Millionaire Raffle was a complete waste of my time. I'm hoping someone here has heard or read an official position on this.
RJOh, Batiatus, HaveABall,
Thanks for your interest in this question. It turns out, the answer is at the Link I've been tacking onto my (Summaries) postings every week!
http://en.wikipedia.org/wiki/Powerball
Scroll down to the section entitled "Winning Expectation." It's all spelled out there. The table even details examples of various cash and annuity amounts. I was correct that about 1/3 of ticket sales is what the cash option should be, and wrong in assuming it is not, because IT IS! If I had payed more attention to this article I would have noticed that the advertized "Jackpot" is 2X the cash option, and is what you end up with after 29 years. So, unless you think you're a savvy enough investor to do better than doubling your cash payout in 29 years, or you're afraid the Lottery might go belly-up before you get all your money, it looks like the annuity option isn't such a bad deal after all.
--Jimmy4164
Congratulations to New York winning the Powerball Jackpot. The Powerball Estimated Jackpot continues to be revised upward after Powerball continues to roll at least twice.
Yeah...what an awesome gift!So they picked a quick pick?Seems that almost all winners claim to have used the quick pick option.I play both,my numbers and QP's