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Am I a sucker to play? And answers to other big questions
MONK, Iowa (AP) – It seems that lottery jackpots are getting bigger and bigger, that 's because they are getting bigger and bigger.
Mega Millions' estimated grand prix on Tuesday night reached $ 1.6 billion, continuing the trend of giant jackpots. This will be the biggest lottery lottery in US history when one player wins and will join five more of the top 10 players in the last three years.
Lottery officials have changed the odds over the last few years to reduce the chances of winning a jackpot, which has increased the opportunity for grand prizes to reach stratospheric levels. Look at how the numbers work:
Annette Gray, left of Valley Stream, NY, buys lottery tickets on Friday, October 19, 2018 in New York City. The estimated jackpot for Friday's Mega Millions draw was $ 1 billion. Gray said that it was "a dollar and a dream, but I spent ten today." (Photo AP / Bebeto Matthews)
WHY REDUCE THE NUMBER OF JACKPOTS?
The theory was that bigger jackpots would attract more attention, causing more players to spend $ 2 for a Mega Millions or Powerball ticket. The higher the number of tickets sold, the more jackpots increase, which leads to more players and … you see the idea.
Powerball was the first to test the theory in October 2015, modifying the potential number combinations. In doing so, Powerball changed the odds of winning the $ 175 million jackpot to one out of $ 292.2 million. Officials at the time also increased the chances of winning small prizes. Mega Millions took similar action in October 2017, raising the probability of one out of 259 million to one out of 302.5 million
People line up at the Kwik Stop food store on 46th Avenue and Hollywood Boulevard in Hollywood, Florida to purchase Mega Million lottery tickets on Friday, October 19, 2018. (Michael Laughlin / Sun-Sentinel in Florida South via AP)
Did it work?
States have generally reported an increase in sales of Mega Millions and Powerball since the change. But the ever-increasing jackpots make them more and more dependent on these massive gains, because the prices that once seemed so huge now seem almost puny in comparison. Consider the current $ 620 million Powerball jackpot. This is an incredible sum, but compared to the estimated Mega Millions price of $ 1.6 billion, it seems hardly worthwhile to get bored with the purchase of a ticket.
WHEN THE JACKPOT IS HUGE, WHAT DOES SALES LOOK LIKE?
It is difficult to overestimate the speed with which lottery tickets steal mini-markets when jackpots become more important. In California, for example, the lottery sold $ 5.7 million worth of Mega Millions tickets during the first half of the day on Thursday. Peak sales occurred at lunchtime, as people bought 200 tickets per second.
IF I WIN, IT IS WHAT DOES IT BANK?
Do not expect to make a deposit of nearly $ 1.6 billion if you win the Tuesday night draw. Almost all winners choose the cash option, which stood at about $ 904 million on Monday morning. After deducting federal taxes and state-imposed deductions, which vary across the country, winners will typically end up with about half that amount to pay for their yacht purchases. The annuity option guarantees more money, but it is paid over 29 years and would also result in a hefty tax bill.
GIVEN AWFUL FAILURES, IS I A PLAYER TO PLAY?
Probabilities are largely not in your favor. Mathematically, you are not rational if you think you have a chance to win the jackpot, whether with a ticket or 100 tickets.
What is the rating? Cornelius Nelan, a math teacher at Quinnipiac University in Connecticut, notes that the chances are pretty much the same as rolling a dice and getting one, 11 times in a row.
Most people do not expect to win and instead think that the $ 2 bill is a small price to dream and be part of a dream conversation with colleagues or family. As Jane L. Risen, a behavioral science professor at the University of Chicago, puts it: "When the jackpot takes such magnitude," it creates that sense of community. He creates that sense of camaraderie. I also think it creates a potential feeling of regret for not being the one playing ".
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Associated Press reporter Teresa Crawford in Chicago contributed to this report.
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Follow Scott McFetridge on Twitter at the address: https://twitter.com/smcfetridge
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For full coverage of the lottery by the AP: https://apnews.com/Lottery
I WON! I WON! NOW WHAT!
Mega Millions Betting Cards are presented at Corner Market on Wednesday, October 17, 2018, in Lyndhurst, Ohio. The estimated jackpot draw on Friday would be the second-largest lottery lot in US history, with a jackpot estimated at more than $ 900 million. (AP Photo / Tony Dejak)
Lottery officials recommend that winners take a deep breath, put their winning ticket in a safe place and consult a reputable financial planner before heading to the lottery headquarters. Their first decision is to choose between the $ 548 million cash option, or an annuity, with a down payment and annual payments over 29 years. Almost all winners opt for cash, but the annuity has advantages, as it slightly reduces the tax bill and provides a stable income stream that increases by 5% per year.
HOW LONG TIME DO I ASK FOR THE JACKPOT?
The states have different rules, so depending on where you bought the ticket, you have 180 days to a year.
GET MY MONEY IMMEDIATELY?
No, you can not just cash one of those oversized checks listed on all the winner's photos. The speed of payment also varies by state, but a week or two is common. Carole Gentry, a spokeswoman for the Maryland lottery, said the requirement is seven to ten days in that state.
Can I keep the secret?
This July 1, 2016 photo shows Mega Millions lottery tickets on a counter at a Pilot Travel Center near Burlington, NB. After almost three months without a winner, the Mega Millions lottery game has reached an estimated $ 654 million. Unfortunately, even though the jackpot for his draw on Tuesday night, October 16, 2018, ranks fourth in the history of the United States, the odds of matching the six numbers and winning the game are not do not improve. They are stuck at a miserable 302.5 million. (AP Photo / Gerry Broome, File)
Winners may remain anonymous in six states: Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina. In Arizona, people who earn more than $ 600 can keep their name secret for 90 days after claiming a prize, but after that, the names are public documents. In Michigan, the winners are anonymous unless they win Mega Millions or Powerball prizes.
WHAT IS TAXES?
For winners of $ 5,000 or more, all states automatically deduct 24% of federal taxes, but taxes vary considerably. Some large states, including California, do not withhold tax on lottery winnings and some, like Texas, have no personal income tax at all. For others, the state is taking a bite, especially in New York, where a winner should pay a 8.8% tax. Residents of New York City would pay an additional fee of 3.9%. In general, taxes absorb about half of the gains.
Melissa Labant, an expert in tax policy at the American Institute of Certified Public Accountants, said the winners should realize that, if taxes are initially withheld in awarding prizes, it will probably take more money at the time of the tax return, because people are suddenly up to 37% installment tax.
"It surprises people," she says. "You must be ready to write another check to the IRS in April."
WHAT ARE MY TAXES IF I DO NOT LIVE IN THE STATE WHERE I PURCHASED THE TICKET?
This can be complicated, but most of the time, the winners pay the taxes where they bought the ticket, and then get credit for their taxes in their home country. The final tax bill may depend on the state where you live tax at a higher or lower rate than where you bought the ticket. The rules vary from state to state. It is therefore an interesting subject for this financial planner.
What happens when you win the lottery?
The 10 biggest American jackpots
Mega Millions lottery tickets are printed on a lottery machine at a convenience store on Wednesday, October 17, 2018 in Chicago. The estimated jackpot draw on Friday would be the second-largest lottery lot in US history, with a jackpot estimated at more than $ 900 million. (AP Photo / Nam Y. Huh)
Lottery players will have a chance to win an estimated $ 1 billion jackpot at Friday's Mega Millions draw, which would be the second-biggest lottery lot in American history.
Here is an overview of the 10 biggest US jackpots won and the states where the winning tickets were sold:
1. $ 1.6 Billion, Powerball, January 13, 2016 (three tickets, California, Florida, Tennessee)
2. $ 758.7 million, Powerball, August 23, 2017 (a ticket, from Massachusetts)
3. $ 656 million, Mega Millions, March 30, 2012 (three tickets, from Kansas, Illinois and Maryland)
4. $ 648 million, Mega Millions, December 17, 2013 (two tickets from California and Georgia)
5. $ 590.5 million, Powerball, May 18, 2013 (a ticket, from Florida)
$ 587.5 million, Powerball, November 28, 2012 (two tickets from Arizona and Missouri)
7. $ 564.1 million, Powerball, February 11, 2015 (three tickets, from North Carolina, Puerto Rico and Texas)
8. $ 559.7 million, Powerball, January 6, 2018 (one ticket, New Hampshire)
$ 543 million, Mega Millions, July 24, 2018 (one ticket, California)
10. $ 536 Million, Mega Millions, July 8, 2016 (a post from Indiana)
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Sources: AP archives, www.megamillions.com and www.powerball.com
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