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.
Thank you Kate, very informative video.
Thanks Kate!
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.
Learned something new!
And nice job!
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.
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.
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.
That's the whole nine yards there, Kate.