(NEXSTAR) — Before Saturday’s Powerball draw, which resulted in two jackpot-winning tickets, the advertised grand prize stood at $1.8 billion. However, following confirmation of the winning tickets, the jackpot turned out to be about $13 million less than initially stated.
So what changed?
In Powerball (and Mega Millions) jackpots, the winner chooses between receiving their winnings as either 30 yearly annuity payments or a single cash payout. The advertised figures reflect both options. The higher amount, $1.787 billion in this instance, corresponds to the annuitized payments, while the lower amount, $820.6 million, reflects the cash value.
The cash value shown for the jackpot indicates the funds required to provide the estimated annuity prize, according to Powerball officials. Predictions of ticket sales are used to project the jackpot’s cash value, along with interest rates tied mainly to U.S. Treasury bonds, which are purchased to ensure the funding of annuity payments.
Though Powerball officials have not elaborated on why the jackpot was less than the promoted $1.8 billion, and a spokesperson did not promptly respond to Nexstar’s inquiry, it is common for these figures to vary between drawings.
Often, this is due to ticket sales; the majority of tickets are sold on the day of the drawing. If actual sales fall short of expectations — possibly affected by external factors like adverse weather — or if there’s a fluctuation in U.S. Treasury rates, the jackpot’s value may adjust.
But, when the jackpot is over $1 billion, is a difference of $13 million really that much?
For the winners of this jackpot, however, there is a catch. As there were two winning tickets, one in Missouri and another in Texas, both ticket holders will evenly divide the prize. Powerball officials state that the winners (who may choose to remain anonymous) will receive either $893.5 million in annuities or a one-time payment of $410.3 million.
