How the Powerball jackpot ballooned to over $1.5 billion

 

Ever wondered why lottery loot grows so ridiculously honking big?

The Powerball jackpot ballooned to a historic $1.5 billion on Tuesday, just one day before the big draw scheduled for tonight at 10:59 p.m. ET.

Lottery officials say the jackpot grew so astronomically large thanks to the hype over the huge prize, which had reached record-breaking levels earlier in the week, pushing sales and driving the grand prize even higher. According to www.circlemud.org, progressive-style lotteries such as Powerball can grow seemingly boundless because when no one wins the draw the prize money is then carried into the next drawing’s jackpot combined with new money from ticket sales for the latest lottery. The Powerball has been growing since November 4, when the last winner was drawn.

As it stands, the Powerball prize is the U.S.’s largest ever lottery bonanza and the world’s biggest potential lottery prize for a single winner.

While the game is played in most U.S. states, Canadians and other non-U.S. citizens are eligible to take a crack at the prize, too. According to news reports, Canadians were lining up at stores and gas bars in Canadian border states to purchase the lucky ticket. Some, despite buyer-beware warnings, are even buying tickets online.

Should you be so lucky, you can take your Powerball prize in annual payments over 29 years (which totals USD $1.5 billion) or in a lump-sum, one-time payout of USD $930 million. Bear in mind, the taxes you’ll have to pay Uncle Sam, which range from 25 to 30 per cent, and the possibility of having to pay state taxes as well. Oddly enough, once you bring your cash back to Canada, there’s no tax grab from the Canadian government as lottery wins are not taxed, even those from other countries.

The jackpot prize, handwritten on a Powerball sign, is displayed at a corner store selling lottery tickets along the U.S. Mexico border in San Ysidro, California, January 12, 2016.   (REUTERS/Mike Blake)

So what are the odds of a win? At one in 292.2 million, pretty enormous.

In Canada, our lotteries are a little tamer. According to the Ontario Lottery and Gaming Corporation (OLG), the biggest jackpot ever offered was $64 million in a Lotto 649 draw that took place in October of 2015. The winning ticket was sold in Mississauga but the winner or winners have yet to claim their prize.

“Sometimes people do come in and claim their prize right away,” says OLG spokesperson Dita Kuhtey. “And some winners let the shock wear off and choose to talk to their family and get their affairs in order and take their time deciding what to do with the money.”

The ever-growing jackpot

Jackpots grow much the same in Canada as they do in the U.S. With Lotto Max, for example, when the big prize is not won and once it reaches $50 million or more, prize money for the jackpot category is then directed into a series of separate draws for prizes of $1 million each, and these are known as MAXMILLIONS. The odds of winning Lotto Max are much better than Powerball, though, at one in 27 million, it’s still not a sure thing. Canada’s other national lottery, Lotto 649, offers better odds of one in 14 million.

The U.S. Powerball frenzy isn’t affecting Canadian lottery ticket sales north of the border, says Kuhtey, who adds that the biggest driver of lottery ticket sales here is the size of the jackpot.

“We definitely see an increase when the jackpot hits the $50 million mark,” she says.

Since Lotto 649 launched in 1982, players in Ontario have won more than $11 billion in prizes. The Lotto Max has awarded over $2.8 billion in prizes since 2009.

“We make millionaires,” says Kuhtey. “We have people who have played regularly and they win and we’ve had a woman who played her first Lotto Max ever and she won $48 million. So it happens but you can’t win if you don’t buy a ticket.”

And if no one wins the $1.5 billion tonight, just imagine what Saturday’s draw might reach.