Powerball is an American lottery game sold by 45 lotteries as a shared jackpot game. It is coordinated by the Multi-State Lottery Association (MUSL), a non-profit organization formed by an agreement with lotteries. Since the format change on January 15, 2012, Powerball's minimum advertised jackpot is $40 million (annuity) with a potential of nine-figure prizes. Its annuity option is paid in 30 graduated installments; winners may choose a lump sum cash payment instead, but with a substantial discount. Powerball drawings are held on Wednesdays and Saturdays at 10:59 p.m. Eastern time. The game uses a 5/59 (white balls) + 1/35 (Powerballs) matrix from which winning numbers are chosen. Each play costs $2, or, with the Power Play option, $3. (Prior to January 15, 2012, games cost $1 each, or $2 with Power Play; that option was added in 2001.) The official cutoff time for ticket sales is 10 pm ET; some jurisdictions cut sales earlier.[1] The drawings usually are held at the Florida Lottery’s high-tech studio in Tallahassee.
On November 29, 2012, one day after the drawing for the largest Powerball jackpot, the California Lottery Commission voted to join Powerball. California joined the game on April 8, 2013.
On May 18, 2013, the largest jackpot in the game's history, and the largest prize ever on one ticket, approximately $590,500,000 (annuity), was won. On June 5, Florida Lottery officials announced the winner, who was Gloria C. MacKenzie, 84, who purchased the "quick pick" ticket at a Publix supermarket in Zephyrhills, Florida. MacKenzie opted to take the cash option, which was approximately $370,800,000 before Federal withholding (Florida does not have a state income tax.)[2][3]
Contents
[hide]The 2010 expansion of Mega Millions and Powerball
On October 13, 2009, MUSL and the Mega Millions consortium signed an agreement to allow US lotteries to sell both games, no longer requiring exclusivity. The expansion occurred on January 31, 2010, as 10 Mega Millions members began selling Powerball tickets for their first drawing on February 3. Simultaneously, 23 Powerball members began offering Mega Millions tickets for their first drawing on February 2. On March 1, Montana (by joining Mega Millions) was the first state to join the "other" game after the cross-selling expansion. Later in March, Nebraska, then Oregon, also joined Mega Millions; Arizona followed on April 18, with Maine joining Mega Millions on May 9. Colorado and South Dakota joined Mega Millions on May 16. The most recent MUSL member joining Mega Millions was Louisiana, in November 2011.
By May 2013, of the 50 US states, 43 of them will participate in both Mega Millions and Powerball games completing the expansion as all Lotteries now offer both games. The 7 remaining non-participating states do not allow/run state run lotteries by either law or state constitutional mandate.
Powerball members
Powerball replaced Lotto*America in April 1992; Mega Millions replaced The Big Game in May 2002 (see below for the evolution of the name Mega Millions).
Mega Millions and Powerball
| Lottery | Powerball | Mega Millions |
|---|---|---|
| Arizona | 1994 | April 18, 2010 |
| Arkansas | October 31, 2009 | January 31, 2010 |
| California | April 8, 2013 | 2005 |
| Connecticut | 1995 | January 31, 2010 |
| Colorado | April 2001 | May 16, 2010 |
| Delaware | 1991 | January 31, 2010 |
| Florida | 2009 | May 15, 2013 |
| Georgia | January 31, 2010 | 1996 |
| Idaho | 1990 | January 31, 2010 |
| Illinois | January 31, 2010 | 1996 |
| Indiana | 1990 | January 31, 2010 |
| Iowa | 1988 | January 31, 2010 |
| Kansas | 1989 | January 31, 2010 |
| Kentucky | 1991 | January 31, 2010 |
| Louisiana | March 1995 | November 16, 2011 |
| Maine | 2004 | May 9, 2010 |
| Maryland | January 31, 2010 | 1996 |
| Massachusetts | January 31, 2010 | 1996 |
| Michigan | January 31, 2010 | 1996 |
| Minnesota | 1990 | January 31, 2010 |
| Missouri | 1988 | January 31, 2010 |
| Montana | 1989 | March 1, 2010 |
| Nebraska | 1994 | March 20, 2010 |
| New Hampshire | 1995 | January 31, 2010 |
| New Jersey | January 31, 2010 | 1999 |
| New Mexico | 1996 | January 31, 2010 |
| New York | January 31, 2010 | 2002 |
| North Carolina | 2006 | January 31, 2010 |
| North Dakota | 2004 | January 31, 2010 |
| Ohio | April 16, 2010 | 2002 |
| Oklahoma | 2006 | January 31, 2010 |
| Oregon | 1988 | March 28, 2010 |
| Pennsylvania | June 29, 2002 | January 31, 2010 |
| Rhode Island | 1988 | January 31, 2010 |
| South Carolina | 2002 | January 31, 2010 |
| South Dakota | 1990 | May 16, 2010 |
| Tennessee | April 21, 2004 | January 31, 2010 |
| Texas | January 31, 2010 | 2003 |
| US Virgin Islands | October 2010 | 2002 |
| Vermont | 2003 | January 31, 2010 |
| Virginia | January 31, 2010 | 1996 |
| Washington | January 31, 2010 | 2002 |
| West Virginia | 1988 | January 31, 2010 |
| Wisconsin | 1989 | January 31, 2010 |
| Wyoming | None | None |
Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah do not have laws establishing a state lottery. Although Puerto Rico has a lottery, it does not participate in either Mega Millions or Powerball; it does not plan to join either game yet. On March 14, 2013, Wyoming became the 44th state to establish a state lottery. However they do not offer any games yet.
Background and history
Lotto*America
Powerball's predecessor began in 1988;[4] it was known as Lotto*America. The game, and name, were changed to Powerball on April 19, 1992. Powerball's first drawing was held on April 22.
Maine joined MUSL in 1990, dropping out when Powerball began; it did not rejoin MUSL until summer 2004.
Powerball begins
When it was launched Powerball became the first game to use two drums. Using two drums offers more manipulation, simultaneously allowing high jackpot odds, numerous prize levels, and low overall odds of winning. (As explained later, a Powerball ticket can win by matching only one number.) The two-drum concept was suggested by Steve Caputo of the Oregon Lottery. The two-drum concept has since been used by The Big Game (now Mega Millions) in the US, Australia's Powerball, Thunderball in the United Kingdom, andEuroMillions. (Unlike most two-drum games, Euromillions selects two numbers, called "Lucky Stars", from the second drum; jackpot winners must make a total of seven matches).
Through 2008, Powerball drawings usually were held at Screenscape Studios in West Des Moines, Iowa. The drawings' host was longtime Iowa radio personality Mike Pace, who had hosted MUSL drawings since Lotto*America began in 1988. In 1996 Powerball went "on the road" for the first time, holding five remote drawings at the Summer Olympics in Atlanta. Ironically, weeks later, the Georgia Lottery became the only lottery to leave Powerball (Maine, which joined MUSL in 1990, left when Powerball began). In August 1996, Georgia joined the then-new The Big Game (now Mega Millions), then the other major US lottery group. It planned to sell tickets for both games for the rest of 1996; however, within a few days, Georgia was forcibly removed from MUSL, not to return until the 2010 cross-sell expansion.
On November 2, 1997, the annuity was changed from 20 to 25 yearly payments; the cash option was added. Currently, the annuity consists of 30 graduated payments (increasing 4% annually) over a period of 29 years.[5]
In 1998 Florida was given permission by its government to participate in 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 existing Florida Lottery games. In 2008 Gov. Charlie Crist finally allowed Florida to join MUSL, on January 4, 2009.
On March 7, 2001, an optional multiplier (called Power Play) was added, allowing players to multiply non-jackpot winnings by up to 5 by paying an extra $1 per game. A wheel was introduced to select the Power Play multiplier for each drawing. (On October 9, 2002, the 1x was removed from the Power Play wheel.)
2009 changes include Florida becoming host to drawings
With the start of Powerball sales in Florida on January 4, 2009 (with its first participating drawing January 7), the matrices changed to 5/59 + 1/39 (adding four white ball numbers and dropping three red balls). This change decreased the jackpot probability from 1:146 million to 1:195 million; the overall probability became 1:35.
Based on statistical projections, the average jackpot won increased from $95 million to $141 million. Over 3.5 million additional prizes were expected to be won yearly (based on the same sales level) due to the change in overall probability. The starting jackpot increased to $20 million, with each rollover adding at least $5 million. The jackpot contribution increased from 30.3% to 32.5% of total sales.
The Power Play option was modified; second prize, usually $200,000, was given an automatic 5x Power Play multiplier, making the 5+0 prize $1 million cash.
The bonus second prize if the jackpot exceeded its previous record by $25 million, triggered only twice, was eliminated with the 2012 format change.
The conditions for Florida joining Powerball included a move of the live drawings from West Des Moines, Iowa, to Universal Studios inOrlando. The three hosts rotating announcing duties from Universal Studios were Tracy Wiu, Elizabeth Hart, and Scott Adams. (MUSL headquarters remain in Iowa, where its other draws are held.)
The wheel that was used to determine the Power Play multiplier was retired when the drawings moved to Florida; a random number generator (RNG) was used until the 2012 format change.
The Arkansas Scholarship Lottery became the 33rd MUSL member on October 31, 2009,[6] the last to join before the 2010 cross-sell expansion. The Ohio Lottery added Powerball on April 16, 2010.
Cross-sell expansion of 2010
In March 2009, it was reported that New Jersey, already a Mega Millions member, sought permission to join Powerball. Shortly after New Jersey announced its desire to sell both games, discussions were revealed about allowing each US lottery to sell tickets for both games. On October 13, 2009, the Mega Millions consortium and MUSL reached an agreement in principle to cross-sell Mega Millions and Powerball.[7] In November 2009, MUSL signed an agreement to start streaming the live Powerball drawings online.[8][9]
On January 31, 2010, Powerball sales expanded to 43 lotteries with the addition of 10 Mega Millions members (see list). On the same day, 23 Powerball members began selling tickets for Mega Millions, leaving only 10 lotteries with just Powerball. Of these, eight added Mega Millions by May. The Montana Lottery joined Mega Millions on March 1. Nebraska added Mega Millions on March 20; Oregon followed on March 28; Arizona joined Mega Millions on April 18; Maine added Mega Millions on May 9; Colorado and South Dakota joined Mega Millions on May 16. The US Virgin Islands joined Mega Millions in October 2010. The Ohio Lottery joined Powerball on April 16, 2010 for the drawing the next day.
On March 13, 2010, New Jersey became the first previous Mega Millions-only member (just before the cross-selling expansion) to produce a jackpot-winning Powerball ticket. It was worth over $211 million annuity; it was sold in Morris Plains.
On May 28, 2010, North Carolina became the first previous Powerball-only member (just before the cross-selling expansion) to produce a jackpot-winning Mega Millions ticket; that jackpot was $12 million (annuity).
On June 2, 2010, Ohio won a Powerball jackpot; it became the first lottery selling either Mega Millions or Powerball (not both) on January 30, 2010 to provide a jackpot-winning ticket for its newer game. The ticket was worth $261.6 million annuity; it was sold inSunbury. Ohio's second Powerball jackpot-winning ticket, sold for the June 23, 2010 drawing, was part of another first; since Montana also provided a jackpot winner for that drawing, it was the first time two lotteries shared a jackpot where the two lotteries sold competing games before the cross-selling expansion, as Montana sold only Powerball before the expansion date.
As a result of Illinois joining Powerball, it became the second multi-lottery game (after Mega Millions, which Illinois already participated in) whose drawings are carried nationally, instead of in participating states. Both games' drawings are simulcast via Chicago cable superstation WGN-TV through its national WGN America feed. WGN-TV has aired Illinois Lottery drawings nationally since 1992 after acquiring broadcast rights from Fox owned-and-operated station WFLD in Chicago in 1988, which took the rights from WGN-TV the year prior. Powerball drawings are aired on WGN-TV and WGN America on Wednesday and Saturday evenings immediately following the station's 9 p.m. (Central time) newscast with the Mega Millions drawings being aired Tuesdays and Friday evenings after the newscast.
2012 changes; California joins April 2013
As of January 15, 2012,[10] each basic Powerball play costs $2; with Power Play, $3. The minimum jackpot is $40 million. Any non-jackpot play matching the 5 white balls wins $1 million. There are 35 Powerballs, down from 39.[11] The drawings were moved from Universal Studios Orlando to the Florida Lottery’s high-tech studio in Tallahassee; Sam Arlen is the host, with Alexa Fuentes substituting when Arlen is unavailable. These changes were made to increase the frequency of nine-figure jackpots; a Powerballspokesperson believed a $500 million jackpot was feasible (it became a reality within the year[12]), and that the first $1 billion jackpot in US history would occur by 2022.[13] (Ironically, less than three months after the Powerball changes, Mega Millions' jackpot reached $656,000,000 despite remaining a $1-per-play game.)[14]
The Power Play prizes no longer are determined by a random multiplier; also, the $25 million rollover "cap" (creating larger 5+0 prizes) was eliminated.
Although California joined Powerball on April 8, 2013, it will not offer the Power Play option, as all payouts in California Lottery drawing games, by law, are pari-mutuel. This is similar to Mega Millions (which became available in California in 2005; California's is the only lottery without the Megaplier).
Playing the game
Basic game
The minimum Powerball bet is $2. In each game, players select five numbers from a set of 59 white balls and one number from 35 red Powerballs. The number chosen from the red Powerballs may be the same as one of the numbers chosen from the white balls. Players can select their own numbers and/or have the terminal randomly select numbers (called "quick pick", "easy pick", etc. depending on the state ). In each drawing, winning numbers are selected using two ball machines, one containing the white balls and the other containing the red Powerballs. Five balls are drawn from the first machine and one from the second machine; these are the winning numbers. Games matching at least three white balls and/or the red Powerball win.
The drawing order of the five white balls is irrelevant; all tickets show the five white ball numbers in ascending order. Players also cannot use the drawn Powerball number to match one of their white numbers, or vice versa.
Two identical machines are used for each drawing, randomly selected from four machines. The model of machine used is the Halogen, manufactured by Smartplay International of Edgewater Park, New Jersey. There are eight ball sets (four white, four red); one set of each color is randomly selected before a drawing. The balls are mixed by a turntable at the bottom of the machine that propels the balls around the chamber. When the machine selects a ball, the turntable slows to catch it, sends it up the shaft, and then down the rail to the display.
The double matrix has varied:
| Starting date | Pick 5 of | Pick 1 of | Jackpot odds | Power Play multipliers |
|---|---|---|---|---|
| April 22, 1992 | 45 | 45 | 1:54,979,154 | none† |
| November 5, 1997 | 49 | 42 | 1:80,089,127 | none† |
| March 7, 2001 | 49 | 42 | 1:80,089,127 | 1×, 2×, 3×, 4×, 5× |
| October 9, 2002 | 53 | 42 | 1:120,526,769 | 2×, 3×, 4×, 5× |
| August 28, 2005 | 55 | 42 | 1:146,107,961 | 2×, 3×, 4×, 5× |
| January 7, 2009 | 59 | 39 | 1:195,249,053 | 2×, 3×, 4×, 5× |
| January 15, 2012 | 59 | 35 | 1:175,223,510 | none |
†Power Play was introduced in 2001.
While Mega Millions and Powerball each have roughly the same jackpot odds despite having a different double matrix (Mega Millions is 5/56 + 1/46), since Powerball is $2 per play, on average, it now takes approximately $350,000,000 in wagers (not counting the extra $1 for each Power Play wager), on average, to produce a jackpot-winning ticket.
Power Play
For an additional $1 per game, a player may activate the Power Play option. Prior to January 15, 2012, Power Play prizes were determined by a random multiplier.
The dilemma for players is whether to maximize the chance at the jackpot, or reduce the chance at the jackpot in exchange for an increase in lower-level prize(s).
In 2006 and 2007, MUSL replaced one of the 5× spaces on the then-Power Play wheel with a 10×. During each month-long promotion, MUSL guaranteed that there would be at least one drawing where the 10× multiplier would be drawn. The promotion returned in 2008; the ball landed in the 10× space twice. After skipping 2009, the 10× multiplier returned in May 2010 (after the Power Play drawing was changed to RNG). The promotion was extended for the only time, as the 10× multiplier was not drawn until June 12. The second prize 5× guarantee continued; the 10× applied to all non-jackpot prizes, as in previous promotions.
Power Play's success has led to similar multipliers in other games, such as the tripler in MUSL's smaller Hot Lotto, called Sizzler; andMegaplier, available in all Mega Millions states except California. (Hot Lotto's format will change in May 2013; it is not known whether the Sizzler option will continue as is.)
The 2012 game change resulted in all eight lower-tier levels having "fixed" Power Play prizes.[15]
Payout and odds
Payouts (on a $2 play) are:
| Matches | Prize | Prize With Power Play[15] | Odds of winning[16] |
|---|---|---|---|
| Powerball only | $4 | $12 | 1 in 55.41 |
| 1 number plus PB | $4 | $12 | 1 in 110.81 |
| 2 numbers plus PB | $7 | $14 | 1 in 706.43 |
| 3 numbers; no PB | $7 | $14 | 1 in 360.14 |
| 3 numbers plus PB | $100 | $200 | 1 in 12,244.83 |
| 4 numbers; no PB | $100 | $200 | 1 in 19,087.53 |
| 4 numbers plus PB | $10,000 | $40,000 | 1 in 648,975.96 |
| 5 numbers; no PB | $1,000,000 | $2,000,000 | 1 in 5,153,632.65 |
| 5 numbers plus PB | Jackpot | Power Play does not apply to jackpot | 1 in 175,223,510.00 |
- Note, all Prize amounts are variable in California as state law requires prizes to be pari-mutuel and may be higher or lower than the fixed amounts paid in the other states. Powerplay is not offered in California.
Overall odds of winning a prize are 1 in 31.85. All non-jackpot prizes are fixed amounts; they may be reduced and paid on a parimutuelbasis on a state by state basis if the liability exceeds the funds in the prize pool for that drawing in that particular state.[17]
Some may notice that the odds of matching only the Powerball (1-35) are 1:55.41, instead of 1:35. This is because there is a chance of matching at least one white ball in addition to the Powerball.
Jackpot accumulation and payment options
Jackpot winners have the option of receiving their prize in cash (in two installments; one from the winning jurisdiction, then the combined funds from the other 43 members) or as a graduated annuity paid in 30 yearly installments. Each annuity payment is 4% higher than in the previous year to adjust for inflation.
The advertised estimated jackpot represents the total payments that would be paid to a jackpot winner should they accept the 30-installment option. This estimate is based on the funds accumulated in the jackpot pool rolled over from prior drawings, expected sales for the next drawing, and market interest rates for the securities that would be used to fund the annuity.[1] The estimated jackpot usually is 32.5% of the (non–Power Play) revenue of each base ($1) play, submitted by game members to accumulate into a prize pool to fund the jackpot. If the jackpot is not won in a particular drawing, the prize pool carries over to the next drawing, accumulating until there is a jackpot winner. This prize pool is the cash that is paid to a jackpot winner if they choose cash. If the winner chooses the annuity, current market rates are used to calculate the graduated payment schedule and the initial installment is paid. The remaining funds in the prize pool are invested to generate the income required to fund the remaining installments. If there are multiple jackpot winners for a drawing, the jackpot prize pool is divided equally for all such plays.
MUSL and its members accept all investment risk and are contractually obligated and liable to the winner to make all scheduled payments to annuity winners. If a jackpot ticket is not claimed, the funds in the prize pool are returned to members in proportion to the amount they contributed to the prize pool. The 44 states have different rules regulating how unclaimed funds are used.[1]
When the Powerball jackpot is won, the next jackpot is guaranteed to be $40 million (annuity). If a jackpot is not won, the next jackpot is guaranteed to be $10 million higher than the prior drawing. The cash in the jackpot pool is guaranteed to be the current value of the annuity. If revenue from ticket sales falls below expectations, game members must contribute additional funds to the jackpot pool to cover the shortage; the most likely situation is if the jackpot is won in consecutive drawings.
Claiming prizes
Although players may purchase tickets in other states, all prize claims must be made where the ticket was bought.
The minimum age to play Powerball is 18, except in Nebraska, where it is 19, and in Arizona, Iowa, and Louisiana, where it is 21.
Generally, Powerball players do not have to choose cash or annuity unless they win a jackpot (then they usually have 60 days to choose). There are exceptions: in Florida and Missouri, the 60-day "clock" starts with the drawing, so a jackpot winner who wishes to take the cash option needs to make immediate plans to claim their prize. (In Idaho, winners have only 30 days after claiming to choose.) New Jersey and Texas require the cash/annuity choice to be made when playing; in New Jersey, an annuity ticket can be changed to cash after winning; however, in Texas, the choice is binding. (When the cash option was introduced in 1997, all Powerball players had to make the choice when playing; this regulation was phased out by early 1999.) All Powerball prize winners must claim within a period ranging from 90 days to one year, depending on the rules where the ticket was bought.
Powerball winnings in California, Delaware, the District of Columbia, Pennsylvania, and South Dakota are subject to Federal income taxonly. There is no state income tax in Florida, South Dakota, Texas, or Washington, and only on interest and dividends in Tennesseeand New Hampshire. Winnings from tickets purchased in another state may be subject to its income tax laws (with possible credit for taxes paid to one's own state, or vice versa).
Secondary prizes
Unlike the jackpot pool, other prizes are the responsibility and liability of each participating lottery. All revenue for Powerball ticket sales not used for jackpots is retained by each member; none of this revenue is shared with other lotteries. Members are liable only for the payment of secondary prizes sold in their state.
Since the secondary prizes are defined in fixed amounts, on rare occasions, if the liability for a given prize level exceed the funds in the prize pool for that level the amount of the prize may be reduced and the prize pool be distributed on a parimutuel basis and result in a prize lower than the fixed amounts given in the prize tables.[18] Because the secondary prize pools are calculated independently, it is possible prizes may be lower in one state, yet remain at their advertised level in the other Powerball states.
Winning expectation
Because the quoted jackpot amount is an annuity of 30 graduated annual payments, its cash value relative to the annuity fluctuates. The actual ratio depends on projected interest rates and other factors. MUSL starts with the cash value, built from a percentage of sales and then calculates the advertised jackpot amount from that value based on the average costs of the three best securities bids.[19]
The largest Powerball prize (and American record) for cash value on one ticket is the $223.7 millon cash ($337 million annuity) for the August 15, 2012 drawing. It was sold in Michigan.
A jackpot of $365 million was won on February 18, 2006, by one ticket in Nebraska. It was shared by eight people who worked at aConagra meatpacking plant.[20] They chose the cash option, sharing $177,270,519.67 (before taxes).
On October 19, 2005, the West family of Jacksonville, Oregon won $340 million;[21] however, the cash value was lower than that of the $314.9 million annuity value jackpot from December 25, 2002. The Wests' cash prize was $164,410,058.03. The family won shortly after a rule change took effect which was created to generate larger annuity values. If the rule was in effect for the December 2002 jackpot, the annuity value would have been $352.6 million. (Jack Whittaker, of West Virginia, chose the cash option for his then-record jackpot.)
On August 25, 2007, a jackpot worth $314.3 million was won by a retired auto worker from Ohio; that ticket was bought in Richmond, Indiana, a community that already had sold a jackpot-winning ticket of at least $200 million.[22]
In November 2011, three Greenwich, Connecticut financial executives shared $254.2 million (annuity value), the largest prize on a Connecticut-bought ticket.[23] Choosing the cash option, the men split nearly $104 million after withholdings.[23] The jackpot, at the time, was the 12th largest in Powerball history.[23]
At six wins, Florida has produced the most jackpot winners for Powerball.[24]
Fortune cookie payout
The Powerball drawing on March 30, 2005 produced 110 second-prize winners. The total payout to these winners was $19,400,000, with 89 winners each receiving $100,000. The other 21 winners received $500,000, as they were Power Play selections.
MUSL officials initially suspected fraud or a reporting error. However, all 110 winners had played numbers from fortune cookies made by Wonton Food Inc. of Long Island City, New York. The factory had printed the numbers "22, 28, 32, 33, 39, 40" on thousands of fortunes. The "40" in the fortune did not match the Powerball number of "42". None of the employees of Wonton Food played those numbers; at the time, the closest state with Powerball was Connecticut.[25] Since the ticket holders had won as result of a coincidence rather than foul play, the payouts were made.[26]
Had these 110 winners shared the then $25 million jackpot, each ticket would have been worth about $227,272 annuity or $122,727 cash.[27]
The fortune on the inspiring fortune cookie read: "All the pre