Everything about Powerball totally explained
Powerball is an
American lottery operated by the
Multi-State Lottery Association (MUSL), a consortium of lottery commissions in 29
states, the
District of Columbia, and the
U.S. Virgin Islands. MUSL is licensed as the
monopoly provider of multistate lotteries in these jurisdictions.
Powerball's predecessor began in 1988
(External Link
) as
Lotto*America; the game, and name, were officially changed to Powerball on
April 19,
1992. (MUSL then consisted of 14 states and Washington, D.C.;
Maine was a 16th member, but it left MUSL during the transition from L*A to Powerball; Maine wouldn't offer the game until 2004.) Powerball was the brainchild of
Ed Stanek of the Iowa Lottery. The matrix has been changed periodically. On
March 4 2001, an optional multiplier wheel (called "
PowerPlay") was added. On
November 2,
1997, the annuity period was changed from 20 to 25 years, and the cash option was added. The annuity currently consists of 30 graduated payments (increasing annually) over a period of 29 years. Powerball is drawn Wednesdays and Saturdays; the current estimated jackpot for Wednesday,
May 7,
2008, is $15 million; the
cash option is $7.3 million.
The most recent successful claim for a nine-figure Powerball jackpot winner ($100 million or higher annuity value) was for a ticket bought in
Waseca,
Rice County, Minnesota, for the
May 3,
2008 drawing, worth approximately $180.1 million (annuity value); the ticket holders, married grandparents, chose the $88.0 million
cash option. They are the winner of the largest prize in
Minnesota lottery history, and the 20th jackpot winner from that state in Powerball history. Previously, the most recent successful claim of a $100 million or higher prize was for a ticket bought in
Westover, West Virginia, at a
video lottery establishment known as "Paula's", which was the sole winner of the
March 15,
2008 drawing, and which had an approximate annuity value of $276.3 million. The winning group of eight women, all of whom work at a tax collector's office in
Monongalia County, West Virginia, chose to take the
cash option of $139 million instead.
Among notable nine-figure wins prior to this was on a ticket that was purchased in
Richmond, Indiana; that community had also produced the then-U.S. record $295.7 million (annuity) winning ticket for Powerball (
July 29,
1998.) The businesses in Richmond, IN (both of the
Speedway convenience-store chain) that have provided two of the largest Powerball winners are situated about three miles (five kilometers) apart.
Playing the game
As of
May 2008, to play the game, a player pays $1 and picks five numbers from 1 to 55 (white balls) and one additional number from 1 to 42 (the red
Powerball number.) For an additional $1, the player may activate the optional
PowerPlay feature, which applies a random multiplier, using a special wheel spun by the
emcee, to all prizes except the
jackpot. Depending on the PowerPlay number, players may multiply non-jackpot prizes by 2 to 5 (or, during a yearly promotion, 10x.)
A promotion from
March 2 through
March 29,
2006, replaced one of the four 5x slots on the
PowerPlay wheel with
10x. The 10x multiplier was drawn once, on
March 11,
2006. The 10x multiplier returned in April 2007; again, it came up one time. The 10x space returned for a third time on
April 2,
2008, with the ball finding the 10x space
twice for the first time in a 10x promotional period. Each year, MUSL
guarantees that the ball will land in the 10x space at least once, extending the promotion into a second
month, and beyond that, if necessary.
The smaller Hot Lotto introduced its
Sizzler on
January 3,
2008; non-jackpot prizes are automatically
tripled if the option is selected. (As of
May 19,
2008, the Sizzler is available in 12 of the 13 Hot Lotto jurisdictions.)
Payout is according to the following:
| Matches |
Payoff |
Odds of winning |
| Zero numbers, plus Powerball |
$ 3 |
1 in 69 (External Link) |
| 1 number, plus Powerball |
$ 4 |
1 in 127 |
| 2 numbers, plus Powerball |
$ 7 |
1 in 745 |
| 3 numbers |
$ 7 |
1 in 291 |
| 3 numbers, plus Powerball |
$ 100 |
1 in 11,927 |
| 4 numbers |
$ 100 |
1 in 14,254 |
| 4 numbers, plus Powerball |
$ 10,000 |
1 in 584,432 |
| All 5 numbers |
$ 200,000 |
1 in 3,563,609 |
| All 5 numbers, plus Powerball |
Jackpot |
1 in 146,107,962 |
Overall odds of winning a prize are 1 in 36.61.
Jackpot winners have the option of receiving an annuity prize or a single lump sum cash payment. The minimum jackpot prize is a $15 million
annuity disbursed in 30 payments over 29 years. When the jackpot rolls over, it increases by at least $5 million (for example $20 million after one roll.) The lump sum payment is typically approximately half the annuity value. The 30 annuity payments are not equal but based on an increasing rate schedule. For example, the first annual gross annuity payment on the base $15 million jackpot would be approximately $267,000 while the final payment would be approximately $834,000.
Generally, Powerball jackpot winners don't have to choose cash or annuity until after claiming (then they've 60 days to do so.) However, at least in Missouri, the 60-day clock starts with the drawing, so a
Missouri Lottery Powerball winner who wishes to take the lump sum needs to make plans right away to claim their prize. Powerball winners, including the jackpot, must claim their prizes within a period ranging from 90 days to one year, depending on the rules of the MUSL member where the ticket was bought.
When the
cash option began in November 1997, all Powerball players had to choose, when buying a ticket, whether they wished to receive a jackpot prize in lump sum or (at the time) 25 annual payments. About a year later, a new Federal law no longer required the cash/annuity choice to be made in advance. The MUSL members phased in the new regulations.
Powerball drawings are held every Wednesday and Saturday (the night after
Mega Millions drawings) at MUSL's headquarters in
Urbandale, Iowa, normally at 10:59 p.m.
Eastern Time (9:59 p.m. Central.) Drawings are occasionally scheduled at remote locations; when this occurs, the time may be adjusted, but the day remains the same. The results of drawings are not official until they're audited by the accounting firm
LWBJ, LLP.
Machines used
Two machines are used in this game. The balls are mixed by a turntable at the bottom of the machine that propels the balls around the chamber, then when the machine selects a ball, the turntable slows to catch a ball, sends it up the shaft, and then down the rail to the display.
Winning expectation
Because the quoted jackpot amount is paid as an
annuity over 29 years, its immediate cash value to the winner is close to, but less than, half. The actual ratio depends on projected interest rates and other factors. They start with the cash value and calculate the advertised Jackpot amount from that.
When the actual Jackpot is $200M, a player's winning expectation is -14% if no one else is playing. This is the best scenario for the player because the winning won't be diluted in sharing. The expectation of -14% means that the player will lose about 14 cents on a $1 ticket, on average. The player will lose more in reality because others are also playing.
The player's expectation gets better when the jackpot becomes higher. If the jackpot is $400M, a player's winning expectation becomes 54% before tax. If the jackpot is $30M, a player's winning expectation becomes -72%. The break even point is for the jackpot to be $242M, in which case the player loses no more than the tax paid. All these numbers are based on the best scenario in which no other players are sharing the prize.
With the jackpot at various levels, if a player pays $1, the net expectation is shown in the following table:
| Jackpot (approximate) |
Cash Value |
Winning Expectation |
| $30M |
$15M |
$-0.72 |
| $50M |
$25M |
$-0.66 |
| $100M |
$50M |
$-0.48 |
| $150M |
$75M |
$-0.31 |
| $200M |
$100M |
$-0.14 |
| $242M |
$121M |
$0 |
| $300M |
$150M |
$0.20 |
| $350M |
$175M |
$0.37 |
| $400M |
$200M |
$0.54 |
Odds decrease, payouts increase
On
August 28,
2005, the game was modified to provide larger jackpots and faster jackpot pool growth. The main pool of numbers was increased from 53 to 55 and jackpots now begin at $15 million rather than $10 million. The
Powerball number pool remains 42.
Odds of picking the jackpot winning numbers are 1:146.1 million. Overall odds of winning a prize are 1:36.61.
Powerball's most recent change resulted in the increase of some lower-tier prizes, including the doubling of second prize (to $200,000 without PowerPlay) and third prize (to $10,000.)
Largest payoffs
On
February 18,
2006, the jackpot worth $365 million was won by a single ticket sold in
Nebraska. That single ticket was shared by eight meat plant workers. This is the largest Powerball prize (per ticket).
A grand prize won on
October 19,
2005 worth $340 million was awarded to the West family of
Jacksonville, Oregon. The family won less than two months after the rules were changed to promote larger payouts. Steve West, who purchased the ticket, put in $20 for tickets, along with another $20 from his in-laws. The family planned to split the prize among themselves.
Prior to the $340 million winner,
Jack Whittaker of
West Virginia was the claimant to the biggest jackpot. He won $314 million on
Christmas Day,
2002.
On
August 25,
2007, a jackpot worth $314 million was won by a retired auto worker from
Ohio.
Fortune cookie payout
The Powerball drawing of the
March 30,
2005 game produced an unprecedented 110 second-place winners, all of whom picked the first five numbers correctly, but not the Powerball number. The total came out to $19.4 million in unexpected payouts; 89 tickets won $100,000, and the other 21 tickets won $500,000 due to the Power Play
multiplier option.
Powerball officials initially suspected fraud, but it turned out that all the winners received their numbers from
fortune cookies made by Wonton Food Inc., a fortune cookie factory in
Long Island City, Queens, New York. The factory had printed the five regular numbers (22, 28, 32, 33, and 39) on thousands of fortunes. The sixth number in the fortune, 40, didn't match the Powerball number, 42. None of the employees of Wonton Food played those numbers.
Participating states and territories
Arizona,
Connecticut,
Colorado,
Delaware,
District of Columbia,
Idaho,
Indiana,
Iowa,
Kansas,
Kentucky,
Louisiana,
Maine,
Minnesota,
Missouri,
Montana,
Nebraska,
New Hampshire,
New Mexico,
North Carolina,
North Dakota,
Oklahoma,
Oregon,
Pennsylvania,
Rhode Island,
South Carolina,
South Dakota,
Tennessee,
Vermont,
West Virginia,
Wisconsin, and the
U.S. Virgin Islands.
The minimum age to play Powerball is 18, except in Nebraska (19); Arizona, Iowa, and Louisiana (21).
Powerball winnings are exempt from state
income taxes in Delaware,Pennsylvania, South Carolina, and the District of Columbia. There is no state income tax in South Dakota, and only on interest and dividends in New Hampshire and Tennessee. . Winnings from tickets purchased across state lines may be subject to tax from the state of purchase (with possible credit for taxes paid to one's own state or vice versa).
Maine started offering the then-Lotto*America in 1990, but dropped out of MUSL two years later, when Powerball began. Only in 2004 did Maine begin selling Powerball tickets.
Georgia left Powerball in 1996 to join the Big Game (now
Mega Millions), the other major US multi-state lottery.
In 1998,
Florida was given permission by the state government to join a multi-state game. It was set to offer Powerball; however, in early 1999, the new governor,
Jeb Bush, prevented Florida from joining, since he believed Powerball would hurt the state's existing lottery games. Currently, Florida is the only lottery state that doesn't participate in either Powerball or Mega Millions.
California never had any intention of offering Powerball; however, it joined MUSL since there was a planned "international" lottery game; but it never got off the ground. It currently participates in Mega Millions.
Licensed products
In 2006
WMS Gaming released a range of
slot machines under the Powerball brand name.
Vista Sidebar Gadget
In 2007 the
Oregon Lottery released a new Windows Vista Sidebar gadget which relays the winning numbers for Powerball in live time. The gadget also provides large jackpot announcements.
Oregon Lottery
In
November 2007,
Lottery Post released the
Lottery Results Gadget for Windows Vista, providing near real-time winning numbers for Powerball, in addition to results for every other
lottery game offered in each state. Likewise, new jackpots are pushed to the
Windows Sidebar gadget after they're announced.
Further Information
Get more info on 'Powerball'.
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