On the night before Christmas, an individual in Arkansas became the fortunate recipient of the Powerball’s second-largest jackpot, amounting to a staggering $1.8 billion.
With the numbers 4, 25, 31, 52, 59, and the Powerball 19, this person’s holiday became truly magical, overcoming the daunting odds of 1 in 292.2 million and breaking a lengthy run of 44 consecutive drawings without a jackpot winner.
However, Arkansas has some lesser-known regulations that will keep the winner’s identity under wraps and reduce the massive payout by several hundred million dollars.
State legislation allows lottery winners of prizes exceeding $500,000 to maintain their anonymity for up to three years following their win.
This means that the identity of this month’s winner might remain a mystery to the public until December 2028.
Moreover, the holiday timing meant the lucky winner had to wait before claiming their prize, as the Arkansas lottery offices were closed for the season until yesterday.
Once the prize is claimed, the state’s tax agency will take out 3.9 percent of the $1.8billion headline figure, according to USA Mega.
After paying an additional 37 percent tax to the federal government, the winner can expect to take home $493.5million in a lump sum or $1.1billion in payments over 30 years.
Millions of Americans rushed to convenience and grocery stores to enter the recent $1.8billion Powerball game. It was the second-largest jackpot in the game’s history, and found a winner on Christmas Eve
The jackpot figure represents what the prize would be if the pool were invested in Treasury bonds over 30 years — which is why recent higher interest rates pushed up the headline amount.
Choosing the annuity provides one upfront payment followed by 29 annual installments that rise 5 percent each year.
Powerball tickets are sold in 45 states, the District of Columbia, Puerto Rico, and the US Virgin Islands. Winners in each state or territory can expect wildly different final sums because of local taxes.
Winners in California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t pay state taxes on jackpot winnings.
Meanwhile, Maryland, New York, Oregon, New Jersey, and Washington DC winners have to pay state taxes above eight percent on their prize money.
The Christmas Eve drawing was only the second time that Arkansas has produced a Powerball jackpot winner. The first was back in 2010.
Of the 45 US states that participate in the Powerball, Arkansas is middle-of-the-pack on taxing the game’s top prizes.
Winners in California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t pay state taxes on jackpot winnings.
The Powerball’s top prize jumped over $1.8billion before the drawing as players rushed to grab the game’s record-breaking tickets
Unlike previous lottery winners, who have publicly celebrated their lottery cash windfalls, Arkansas’ winner can remain private for three years
Meanwhile, Maryland, New York, Oregon, New Jersey, and Washington DC winners have to pay state taxes above eight percent on their prize money.
Still, lottery experts are not worried about the winner’s upcoming tax obligations.
Instead, Jared James, the founder of LottoEdge, said its important for the game’s non-winners to consider how much money they lose while dishing out the $2 to participate in the games.
‘The biggest thing is to treat it as entertainment,’ James told the Daily Mail.
‘When the jackpot gets big like this, some people shift that mindset and think “Oh, this is life-changing money.”
‘I would say it’s more money than most people need. Don’t chase this Powerball thinking, “Hey, this is my retirement plan.” Play it for fun, because you’re most likely not going to win.’
The likelihood of taking home the winning ticket is shockingly slim.
Tim Chartier, a professor of mathematics and computer science at Davidson College, doesn’t bother with the Powerball or Mega Millions games. The odds are just too extreme, he says.
‘Imagine I’m going to pick one second in the last 9.2 years,’ he told the Daily Mail.
‘Now, tell me which second I picked. That’s the same odds to win.’
