A nearly $1 billion Mega Millions jackpot is up for grabs Friday night, giving a lucky player the chance to nab the 10th largest lottery prize in U.S. history.
After more than three months without a big winner, the prize has soared to $977 million. The payout would go to a sole winner who opts for the annuity option, doled out over 30 years. Most people usually prefer a lump sum option, which for Friday's jackpot would be an estimated $461 million.
The prize is also subject to taxes, which includes an automatic withholding tax of 24% levied against the winnings, and another 13% in federal taxes when you file your 2024 return.
There's also state taxes in some jurisdictions, which range from 2.9% to 10.9% depending on the state you live in. But if you're lucky enough to live in California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington or Wyoming, you won't pay income in your winnings.
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The jackpot has been gradually building for months thanks to 29 straight drawings without a jackpot winner. The last time someone won the game’s top prize was on Dec. 8, 2023, when two winning tickets were sold at the same gas station in Los Angeles, splitting the $394 million prize.
Lottery jackpots grow so large because the odds of winning are so small. For Mega Millions, players have a 1 in 302.6 million chance of taking home the top prize.
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This is just the sixth time in the nearly 22-year history of the Mega Millions game that the jackpot has been this large, and five of those six jackpots exceeded $1 billion, according to a Mega Millions statement.
The largest Mega Millions jackpot ever, worth $1.602 billion, was sold on Aug. 8, 2023, in Florida.
If it seems like lottery jackpots topping $1 billion are more common nowadays, it's because they are. Since 2021, seven prizes have topped $1 billion. The increased frequency is due to higher interest rates.
The higher the interest rate, the larger the annuity can grow over three decades. The U.S. is in the midst of a remarkable run of interest rate increases, with the Federal Reserve raising a key rate 11 times in 17 months, and that higher rate enables a roughly $500 million lump sum prize to be advertised as a jackpot of about twice that size.
Mega Millions is played in 45 states as well as Washington, D.C., and the U.S. Virgin Islands. Tickets cost $2 each and drawings take place every Tuesday and Friday at 11 p.m. EST.
Powerball jackpot reaches $750 million
It's not just the Mega Millions game that's racking up a massive jackpot. The Powerball jackpot for Saturday's drawing reached $750 million after 34 straight drawings without a big winner.
The jackpot has an estimated cash value of $357.3 million.
Powerball’s terrible odds of 1 in 292.2 million are designed to generate big jackpots, with prizes becoming ever larger as they repeatedly roll over when no one wins. The prize has been rolling over since Jan. 1, when a ticket in Michigan won a prize worth $842.4 million.
Powerball is drawn three times weekly, on Monday, Wednesday and Saturday.
Powerball tickets are also $2 and are sold in 45 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.
