Powerball evolved out of Lotto America, which launched in 1988. The name was changed to Powerball in 1992, and it has become the most famous American lottery, available in 44 states, the District of Columbia, Puerto Rico and the US Virgin Islands. The lottery is administered by the Multi-State Lottery Association (MUSL) – a non-profit organisation.
The Powerball lottery regularly sees epic wins. On 27thMarch 2019, a single ticket holder in Wisconsin, 24 year-old Manuel Franco, won an incredible $768.4 million – the third largest in US history. However, the largest jackpot in world lottery history, worth a staggering $1.586 billion was split among three Powerball tickets, purchased in California, Florida and Tennessee.
Powerball rules and prizes
One of the simplest lotteries to play, Powerball involves choosing 5 numbers from 1-69, along with a bonus Powerball number from 1-26. Getting all 6 numbers correct lands you the jackpot, while getting 5 numbers still gets you a second tier prize of $1 million.
Powerball jackpot payment options and tax
Jackpot winners in Powerball have the option of receiving the winnings in cash (two instalments), or as a graduated annuity paid in 30 annual instalments. Each annual payment is 5% higher than the previous to compensate for inflation. The jackpot advertised is based on the total payments that would be paid to a jackpot winner if they chose the annuity option. Choosing thirty payments also significantly reduces the tax paid on winnings.
Lottery winnings in the United States are subject to different tax rates depending on the state or territory. Remember, if you are resident in another country, you will also be subject to the tax laws of your country of residence.