With a $1.5 billion (yes, with a "b") lottery payout looming – the largest in American history -- to say “Powerball fever” has struck is an understatement.
In addition to crowds at ticket outlets in participating states, lines, some of them stretching for blocks, have formed at “border towns” the cities nearest to the borders of states who don’t participate in the Powerball lottery.
If you are the lucky one to be able to get your tickets before Saturday night, then the incredibly (and we mean INCREDIBLY) lucky one to win, you may have some questions about your upcoming life as a multi-millionaire.
Here are a few questions and answers about the Powerball lottery game and what happens if you win it.
How do you play?
You choose five numbers between 1 and 69, then one “Powerball” number between 1 and 26. The drawing consists of five “white” balls being drawn, then one “red” ball -- the Powerball – being chosen.
How do you win?
There are a few ways. Match all the "white" numbers and match the Powerball and you win the grand prize. In Wednesday's case, approximately $1.5 billion. Match five numbers without the Powerball and win $1 million; match four plus the Powerball and you get $50,000; match three and the Powerball and you get $100; match three without the Powerball and you get $7; match two and the Powerball and you get $7; match one and the Powerball and you get $4; match the Powerball and you get $4.
How much does it cost?
Tickets are $2. You can “upgrade” the ticket to something that increases the potential prize amounts. It’s called a “Power Play” and it costs an addition $1 per ticket. Click here to see the potential additional winnings.
How much would you actually get if you hit the grand prize?
That depends on how you want to collect your money – a lump sum or a 30-year annuity.
The highest federal tax rate for 2016 is 39.6 per cent for income above $233,476 to $466,951, depending on your filing status. With a $1.5 billion jackpot, you’re looking at a lump sum payout estimated at $930 million before taxes. The federal government will take 25 percent off the top of the lump sum –about $279 million – leaving around $651 million. Of that $651 million, you will owe tax on it at a rate 39.6 percent rate.
In addition to federal taxes, your winnings will be subject to varying state tax rates, unless you live in a state such as Florida which does not tax lottery winnings. Click here to see the rate per state for lottery winnings.
If you decide to take the annuity, you are in rare company. Most people opt for the lump sun. The annuity, paid out over 30 years is annuitized – meaning it starts out at a lower amount and increases each year by about 4 to 5 percent. You would be subject to federal tax -- the same formula as if you take the lump sum -- on the annual amount and state taxes if they apply.
Which states participate in Powerball?
Only six states in the United States do not participate in Powerball. You cannot buy Powerball tickets in Alabama, Alaska, Hawaii, Mississippi, Nevada or Utah.
Is there advantage to using the “quick pick” system as opposed to using numbers you pick yourself?
About 70 percent of past winners used "Quick Picks," numbers randomly chosen by the computer system that spits out tickets. Technically, however, numbers you chose have the same odds of winning as Quick Pick numbers do.
What are the odds of winning the Powerball?
According to the Multi-State Lottery Association, your odds of matching all the winning Powerball numbers are 1 in 292.2 million.
What are the odds of being struck by lightning?
Roughly 1 in a million
… of getting bitten by a shark?
1 in 11.5 million
… of becoming president of the United States?
1 in 10 million
… of dating a super model?
1 in 88,000
… of getting a royal flush in poker?
1 in 31,000
So, you could become president, date a super model, get bitten by a shark after you get a royal flush in poker and then be hit by lightning before you win the Powerball jackpot.
But, hey, you gotta play to win.
Where and when is the draw done? Can anyone tamper with it?
The Powerball numbers are drawn in Tallahassee, Fla., at 10:59 p.m. ET on Wednesdays and Saturdays. The machine that draws the numbers is kept in a vault armed with two locks and an alarm. Audio and video recordings are made of the area surrounding the vault every time it is opened.
If I do win, can I remain anonymous?
Only six states -- Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina – allow jackpot winners to remain anonymous. In some states, you can create something called a limited liability company. That means that when the winner is presented, the company would be identified, not the individuals.
© 2017 Cox Media Group.