Mega Millions and Powerball have both increased their jackpots in recent years. The jackpot for Powerball is now at least $1.5 billion. Mega Millions’ annuity payments are increasing at a rate of around 4 percent each year. Although the jackpots are getting bigger, the annuity option is still less expensive than cash. In this article, we discuss how the rise in jackpots will affect low-income communities.
Powerball jackpot has ballooned again from $1.2 billion to at least $1.5 billion
The jackpot for the Powerball lottery game has ballooned again from $1.2 billion (or at least $1.4 billion if you include unclaimed prizes) to at least $1.5 billion. Since the jackpot was first announced on Aug. 3, there have been 38 consecutive drawing results with no winner. Typically, a jackpot prize like this is very rare, but this one is especially big.
Powerball officials have adjusted the rules of the game to allow more prize money to be won. Adding another drawing day in August to the Powerball game has increased sales and prize money. The advertised top prize of $1.2 billion will be paid in an annuity over 29 years, but most lottery winners opt for the cash prize instead.
Mega Millions’ cash option is lower than annuity option for bigger jackpots
Choosing the Mega Millions cash option will cost you less if you win the jackpot. The jackpot is over $1.025 billion. That’s a lot of money to spend on a new home, a sports car, or a vacation to the Maldives. However, the lottery commission will deduct 61 percent of the winnings. This means that the cash option is less beneficial for larger jackpots.
Mega Millions’ cash option is lower than its annuity option for bigger jackpots. If you win the jackpot, the odds of winning the prize are 302,575,350-to-1. The chances of matching five white balls are 12607,306-to-1. For bigger jackpots, major lottery systems offer a cash option. However, the cash option is not the same as the annuity option, which means the jackpot amount is smaller and you will receive a lump sum instead of a series of payments over 29 years.
Impact of higher jackpots on low-income communities
Higher lottery jackpots are not necessarily better for poor communities. Many studies have shown that the lottery is more beneficial to wealthy communities, but poorer communities are often the collateral damage. The lottery has a higher implicit tax than other state taxes, and low-income people pay the most. In addition, low-income people fund a large share of the lottery’s financial aid programs. This is not equitable. In Georgia, for example, lottery players disproportionately fund scholarships for college.