The winner of Friday night’s historic Mega Millions jackpot — if there is finally a winner — will walk away with a quarter of the $1.22 billion advertised on billboards.
That’s because if they accepted their prize as a lump sum, as almost everyone else does, they would receive about $550 million. After taxes are subtracted, $285 million remains.
The jackpot amount that makes headlines and is advertised in stores, gas stations and roadside billboards is not the amount that lottery organizers have in the prize pool.
Instead, it is the total amount that would be paid out to a winner in installments over 30 years – if the amount the organizers do control were invested in government bonds. That figure is higher when interest rates are higher, as they are now.
It means that lottery jackpots are now more inflated than ever before and that winners over the past twenty years will be punished more than anyone else if they choose to accept their winnings as a lump sum.
The Mega Millions The jackpot surpassed $1 billion after no ticket matched all six numbers drawn on Christmas Eve. And it has only grown since the Americans managed to get tickets for what will be the fifth largest jackpot in the history of the game.
DailyMail.com did the calculations in March when a ticket sold in New Jersey matched the numbers for a $1.13 billion drawing — a similar level to the current jackpot.
At the time, we created the image below, which shows the main jackpot being eaten away. Below an expert goes into the details.
How the winner of the massive Mega Millions jackpot on March 27, 2024 probably got away with less than a quarter of the $1.13 billion advertised on billboards. At the time, it was the fifth largest in the game’s history – and the ninth largest including Powerball
Fidel Lule buys a MegaMillion ticket at Won Won Mini Mart in Chinatown Los Angeles on Thursday, December 26
Taxes really eat into profits.
“You have to pay Uncle Sam, the federal government, but also state taxes,” Andrew Stoltmann, a Chicago-based attorney who has advised lottery winners in the past, said in March.
However, he advised that if the winner opted for the 30-year annuity, he or she would not have to pay income taxes for the next 29 years if they settled in a place like Texas, Florida, Nevada or Alaska.
Stoltmann argued that while many winners may be tempted by financial advisors to take the lump sum and invest it themselves, they almost always have to resist despite the tax disadvantage.
“The money manager will tell them to make the lump sum payment because the financial advisors want to grab the full pot of money right away with their greedy hands,” he said.
Regardless of where the winner claims the money, however, federal taxes will always be due, and they represent a whopping 37 percent of the prize amount.
Profits are taxed in advance at 24 percent. But the total amount withheld upon filing will ultimately be 37 percent, as the winners will likely be in the highest tax bracket.
Tickets for the game are being sold in 45 states, along with Washington, DC and the US Virgin Islands. Mega Millions tickets cost $2 each.
“We know that many people will likely receive tickets to Friday’s drawing as a Christmas gift, and what a gift that would turn out to be if you received a ticket worth a $1.15 billion jackpot,” said Joshua Johnston, chief executive of the Mega Millions Consortium said in a statement on Wednesday.
The odds of winning the Mega Millions jackpot are 1 in 302,575,350, while the odds of winning a Mega Millions prize are 1 in 24, according to lottery officials.
Half of the proceeds from the sale of each ticket will remain in the state where the ticket was sold. The drawings take place on Tuesdays and Fridays at 11:00 PM Eastern Time.
“I can’t think of a better way to celebrate the holidays – whether it’s Christmas, Hanukkah, Kwanzaa, the Winter Solstice or any other way people celebrate the season – than by helping make the dreams come true that come with a prize when these are paired and prizes won at all levels of the game,” Johnston said.
This week’s winning ticket was sold at ShopRite Liquor, located at 2200 Route 66
A fascinating study from gambling site CSGO analyzed the most frequently drawn numbers in more than 950 draws between 2015 and 2023
This week’s winning ticket was sold at ShopRite Liquor, located at 2200 Route 66. After the jackpot was hit, it was reset to its default value of $20 million.
In Mega Millions, the chance of matching all six numbers is 1 in 302.6 million.
A fascinating study last year revealed the unluckiest and luckiest numbers that have led to jackpots in the past.
Experts from gambling site CSGO analyzed the most frequently drawn numbers in more than 950 draws between 2015 and 2023.
The number 13 is the least common; it was drawn only 51 times in the past eight years, the study found.
However, the number 61 turned out to be the ‘luckiest’ number as it was chosen 90 times in the last period.
Here’s a look at the largest American jackpots won and the states where the winning tickets were sold:
1. $2.04 billion, Powerball, November 7, 2022 (one ticket, from California)
2. $1.765 billion, Powerball, October 11, 2023 (one ticket, from California)
3. $1.602 billion, Mega Millions, August 8, 2023 (one ticket, from Florida)
4. $1.586 billion, Powerball, January 13, 2016 (three tickets, from California, Florida, Tennessee)
5. $1.537 billion, Mega Millions, October 23, 2018 (one ticket, from South Carolina)
6. $1.348 billion, Mega Millions, January 13, 2023 (one ticket, from Maine)
7. $1.337 billion, Mega Millions, July 29, 2022 (one ticket, from Illinois)
8. $1.326 billion, Powerball, April 7, 2024 (one ticket, Oregon)
9. $1.13 billion, Mega Millions, March 26, 2024 (one ticket, from New Jersey)
10. $1.08 billion, Powerball, July 19, 2023 (one ticket, from California)