Powerball
530094
225407578
2008-07-13T14:55:41Z
71.90.230.186
/* Participating states and territories */
{{dablink|This article is about the [[United States]] lottery game. For the [[Australian]] version, see [[Powerball (Australia)]]. For other uses, see [[Powerball (disambiguation)]].}}
[[Image:Powerballlogo.png|thumb|200px|right|Powerball logo]]
'''Powerball''' is an [[United States|American]] [[lottery]] operated by the [[Multi-State Lottery Association]] (MUSL), a consortium of lottery commissions in 29 [[U.S. state|state]]s, the [[Washington, D.C.|District of Columbia]], and the [[Virgin Islands Lottery (US)|Virgin Islands]]. ([[Florida Lottery|Florida]] will join Powerball in January 2009). MUSL is licensed as the [[monopoly]] provider of multistate lotteries in these jurisdictions.
Powerball's predecessor began in 1988[http://www.in.gov/hoosierlottery/lottery_info/history.asp] as [[Lotto*America]]; the game, and name, were officially changed to Powerball on [[April 19]], [[1992]]. (MUSL then consisted of 14 states and Washington, D.C.; [[Maine Lottery|Maine]] was a 16th member, but it left MUSL during the transition from L*A to Powerball; Maine would not offer the game until 2004.) Powerball was the brainchild of [[Ed Stanek]] of the Iowa Lottery. The matrix has been changed periodically. On [[March 4]] [[2001]], an optional multiplier wheel (called "[[PowerPlay (lottery)|PowerPlay]]") was added. On [[November 2]], [[1997]], the annuity period was changed from 20 to 25 years, and the cash option was added. The annuity currently consists of 30 graduated payments (increasing annually) over a period of 29 years. Powerball is drawn Wednesdays and Saturdays near [[Des Moines, Iowa]]; the game's drawings will move [[permanent|permanently]] to [[Florida]] in 2009 with the game's addition there.
The most recent successful claim for a nine-figure Powerball jackpot winner ($100 million or higher annuity value) was for a ticket bought in [[Waseca, Minnesota|Waseca]], [[Rice County, Minnesota|Rice County,]] [[Minnesota State Lottery|Minnesota]], for the [[May 3]], [[2008]] drawing, worth approximately $180.1 million (annuity value); the ticket holders, married grandparents, chose the $88.0 million [[present value|cash option]]. They are the winner of the largest prize in [[Minnesota State Lottery|Minnesota lottery]] history, and the 20th jackpot winner from that state in Powerball history. Previously, the most recent successful claim of a $100 million or higher prize was for a ticket bought in [[Westover, West Virginia]], at a [[video lottery]] establishment known as "Paula's", which was the sole winner of the [[March 15]], [[2008]] drawing, and which had an approximate annuity value of $276.3 million. The winning group of eight women, all of whom work at a tax collector's office in [[Monongalia County, West Virginia]], chose to take the [[present value|cash option]] of $139 million instead. <ref>"[http://www.usatoday.com/news/nation/2008-03-18-powerball-winners_N.htm Co-workers claim $276.3 Million PowerBall Jackpot]" ''USA Today'' - Retrieved on [[March 18]],[[2008]]</ref>
Among notable nine-figure wins prior to this was on a ticket that was purchased in [[Richmond, Indiana]]; that community had also produced the then-U.S. record $295.7 million (annuity) winning ticket for Powerball ([[July 29]], [[1998]].) The businesses in Richmond, IN (both of the [[Speedway]] convenience-store chain) that have provided two of the largest Powerball winners are situated about three miles (five kilometers) apart.
On [[July 2]], [[2008]], an $85 million Powerball jackpot was won in [[Oklahoma]]; the smaller MUSL game [[Hot Lotto]] also was won there, marking the first time both games produced at least one jackpot winner each on the same night in the same MUSL jurisdiction. (Earlier in the day, MUSL announced the Powerball drawings will move to [[Florida]], while Hot Lotto and the other MUSL numbers games will continue to be drawn in [[Iowa]].)
Powerball drawings are hosted by longtime Iowa [[radio]] personality [[Mike Pace]] (normally shown on the Powerball set in a [[tuxedo]]), who has hosted MUSL drawings since the organization began. He will not be part of the Florida drawings, and, as such, he will become eligible to play Powerball.
==Playing the game==
As of May 2008, to play the game, a player pays $1 and picks five numbers from 1 to 55 (white balls) and one additional number from 1 to 42 (the red [[mega number|Powerball number]].) For an additional $1, the player may activate the optional ''[[PowerPlay]]'' feature, which applies a random multiplier, using a special wheel spun by the [[emcee]], to all prizes except the [[jackpot]]. Depending on the PowerPlay number, players may multiply non-jackpot prizes by 2 to 5 (or, during a yearly promotion, 10x.)
{| class="wikitable"
!Starting date
!Pick 5 out of
!Pick 1 out of
!PowerPlay multipliers
|-
|[[April 19]], [[1992]]
|align="center"|45
|align="center"|45
|align="center"|none
|-
|[[November 2]], [[1997]]
|align="center"|49
|align="center"|42
|align="center"|none
|-
|[[March 4]], [[2001]]
|align="center"|49
|align="center"|42
|align="center"|1–5
|-
|[[October 6]], [[2002]]
|align="center"|53
|align="center"|42
|align="center"|2–5
|-
|[[August 28]], [[2005]]
|align="center"|55
|align="center"|42
|align="center"|2–5
|}
A promotion from [[March 2]] through [[March 29]], [[2006]], replaced one of the four 5x slots on the ''PowerPlay'' wheel with '''10x'''. The 10x multiplier was drawn once, on [[March 11]], [[2006]]. The 10x multiplier returned in April 2007; again, it came up one time. The 10x space returned for a third time on [[April 2]], [[2008]], with the ball finding the 10x space '''twice''' for the first time in a 10x promotional period. Each year, MUSL '''guarantees''' that the ball will land in the 10x space at least once, extending the promotion into a second [[month]], and beyond that, if necessary.
The smaller Hot Lotto introduced its [[Sizzler (Hot Lotto)|Sizzler]] on [[January 3]], [[2008]]; non-jackpot prizes are automatically [[triple]]d if the option is selected.
Payout is according to the following:
{| class="wikitable" cellspacing=3
!Matches
!Payoff
!Odds of winning<ref>{{cite web|title=Powerball - Prizes and Odds|url=http://www.powerball.com/powerball/pb_prizes.asp|accessdate=2006-02-16}}</ref>
|-
|Zero numbers, plus Powerball
|$ 3
|1 in 69 [http://www.powerball.com/pb_contact.asp#odds]
|-
|1 number, plus Powerball
|$ 4
|1 in 127
|-
|2 numbers, plus Powerball
|$ 7
|1 in 745
|-
|3 numbers
|$ 7
|1 in 291
|-
|3 numbers, plus Powerball
|$ 100
|1 in 11,927
|-
|4 numbers
|$ 100
|1 in 14,254
|-
|4 numbers, plus Powerball
|$ 10,000
|1 in 584,432
|-
|All 5 numbers
|$ 200,000
|1 in 3,563,609
|-
|All 5 numbers, plus Powerball
|[[Jackpot]]
|1 in 146,107,962
|}
Overall odds of winning a prize are 1 in 36.61.
Jackpot winners have the option of receiving an annuity prize or a single lump sum cash payment. The minimum jackpot prize is a $15 million [[Annuity (financial contracts)|annuity]] disbursed in 30 payments over 29 years. When the jackpot rolls over, it increases by at least $5 million (e.g. $20 million after one roll.) The lump sum payment is typically approximately half the annuity value. The 30 annuity payments are not equal but based on an increasing rate schedule. For example, the first annual gross annuity payment on the base $15 million jackpot would be approximately $267,000 while the final payment would be approximately $834,000.
Generally, Powerball jackpot winners do not have to choose cash or annuity until after claiming (then they usually have 60 days to do so.) However, in Missouri, the 60-day "[[clock]]" starts with the drawing, so a [[Missouri]] Lottery Powerball [[jackpot]] winner who wishes to take the [[present value|cash option]] needs to make immediate plans to claim their prize. (In [[Idaho]], winners have only 30 days after claiming to make the choice.) Powerball winners, including the jackpot, must claim their prizes within a period ranging from 90 days to one year, depending on the rules of the MUSL member where the ticket was bought.
When the [[present value|cash option]] began in November 1997, all Powerball players had to choose, when buying a ticket, whether they wished to receive a jackpot prize in lump sum or (at the time) 25 annual payments. About a year later, a new Federal law no longer required the cash/annuity choice to be made in advance. The MUSL members phased in the new regulations.
Powerball drawings are held every Wednesday and Saturday (the night after [[Mega Millions]] drawings) at MUSL's headquarters in [[Urbandale, Iowa]], normally at 10:59 p.m. [[Eastern Standard Time Zone|Eastern Time]] (9:59 p.m. Central.) Drawings are occasionally scheduled at remote locations; when this occurs, the time may be adjusted, but the day remains the same. The results of drawings are not official until they are audited by the accounting firm [[LWBJ, LLP]].
==Machines used==
Two machines are used in this game. The balls are mixed by a turntable at the bottom of the machine that propels the balls around the chamber, then when the machine selects a ball, the turntable slows to catch a ball, sends it up the shaft, and then down the rail to the display.
==Winning expectation==
Because the quoted jackpot amount is paid as an [[Annuity (financial contracts)|annuity]] over 29 years, its immediate cash value to the winner is close to, but less than, half the advertised amount of the prize. The actual ratio depends on projected interest rates and other factors. MUSL starts with the cash value, and then calculate the advertised Jackpot amount from that value. <ref>[http://www.powerball.com/pb_contact.asp] Powerball website.</ref>
When the actual Jackpot is $200M, a player's winning expectation is -14% if no one else is playing. This is the best scenario for the player because the winning will not be diluted in sharing. The expectation of -14% means that the player will lose about 14 cents on a $1 ticket, on average. The player will lose more in reality because others are also playing.
The player's expectation gets better when the jackpot becomes higher. If the jackpot is $400M, a player's winning expectation becomes 54% before tax. If the jackpot is $30M, a player's winning expectation becomes -72%. The break even point is for the jackpot to be $242M, in which case the player loses no more than the tax paid. All these numbers are based on the best scenario in which no other players are sharing the prize.
With the jackpot at various levels, if a player pays $1, the net expectation is shown in the following table:
{| class="wikitable" cellspacing=3
!Jackpot (approximate)
!Cash Value
!Winning Expectation
|-
|align="center"|$30M
|align="center"|$15M
|align="center"|$-0.72
|-
|align="center"|$50M
|align="center"|$25M
|align="center"|$-0.66
|-
|align="center"|$100M
|align="center"|$50M
|align="center"|$-0.48
|-
|align="center"|$150M
|align="center"|$75M
|align="center"|$-0.31
|-
|align="center"|$200M
|align="center"|$100M
|align="center"|$-0.14
|-
|align="center"|$242M
|align="center"|$121M
|align="center"|$0
|-
|align="center"|$300M
|align="center"|$150M
|align="center"|$0.20
|-
|align="center"|$350M
|align="center"|$175M
|align="center"|$0.37
|-
|align="center"|$400M
|align="center"|$200M
|align="center"|$0.54
|}
==Odds decrease, payouts increase==
On [[August 28]], [[2005]], the game was modified to provide larger jackpots and faster jackpot pool growth. The main pool of numbers was increased from 53 to 55 and jackpots now begin at $15 million rather than $10 million. The ''Powerball number'' pool remains 42.
Odds of picking the jackpot winning numbers are 1:146.1 million. Overall odds of winning a prize are 1:36.61.
Powerball's most recent change resulted in the increase of some lower-tier prizes, including the doubling of second prize (to $200,000 without PowerPlay) and third prize (to $10,000.)
==Largest payoffs==
On [[February 18]], [[2006]], the jackpot worth $365 million was won by a single ticket sold in
[[Nebraska]]. That single ticket was shared by eight meat plant workers. This is the largest Powerball prize (per ticket).
A grand prize won on [[October 19]], [[2005]] worth $340 million was awarded to the West family of [[Jacksonville, Oregon]]. The family won less than two months after the rules were changed to promote larger payouts. Steve West, who purchased the ticket, put in $20 for tickets, along with another $20 from his in-laws. The family planned to split the prize among themselves.
Prior to the $340 million winner, [[Jack Whittaker (lottery winner)|Jack Whittaker]] of [[West Virginia]] was the claimant to the biggest jackpot. He won $314 million on [[December 25|Christmas Day]], 2002.
On [[August 25]], [[2007]], a jackpot worth $314 million was won by a retired auto worker from [[Ohio]].
==Fortune cookie payout==
The Powerball drawing of the [[March 30]], [[2005]] game produced an unprecedented 110 second-place winners, all of whom picked the first five numbers correctly, but not the Powerball number. The total came out to $19.4 million in unexpected payouts; 89 tickets won $100,000, and the other 21 tickets won $500,000 due to the Power Play [[multiplier]] option.
Powerball officials initially suspected fraud, but it turned out that all the winners received their numbers from [[fortune cookie]]s made by Wonton Food Inc., a fortune cookie factory in [[Long Island City, Queens, New York]]. The factory had printed the five regular numbers (22, 28, 32, 33, and 39) on thousands of fortunes. The sixth number in the fortune, 40, did not match the Powerball number, 42. None of the employees of Wonton Food played those numbers.
==Participating states and territories==
[[Arizona Lottery|Arizona]], [[Connecticut Lottery|Connecticut]], [[Colorado Lottery|Colorado]], [[Delaware Lottery|Delaware]], [[D.C. Lottery|District of Columbia]], [[Florida Lottery|Florida]] '''(beginning in January 2009)'''; [[Idaho Lottery|Idaho]], [[Hoosier Lottery (Indiana)|Indiana]], [[Iowa Lottery|Iowa]], [[Kansas Lottery|Kansas]], [[Kentucky]], [[Louisiana Lottery (modern)|Louisiana]], [[Maine Lottery|Maine]], [[Minnesota State Lottery|Minnesota]], [[Missouri Lottery|Missouri]], [[Montana Lottery|Montana]], [[Nebraska]], [[New Hampshire Lottery|New Hampshire]], [[New Mexico Lottery|New Mexico]], [[North Carolina Education Lottery|North Carolina]], [[North Dakota Lottery|North Dakota]], [[Oklahoma Lottery|Oklahoma]], [[Oregon]], [[Pennsylvania Lottery|Pennsylvania]], [[Rhode Island Lottery|Rhode Island]], [[South Carolina Education Lottery|South Carolina]], [[South Dakota Lottery|South Dakota]], [[Tennessee Lottery|Tennessee]], [[Vermont]], [[West Virginia Lottery|West Virginia]], [[Wisconsin Lottery| Wisconsin]], and the [[U.S. Virgin Islands]].
The minimum age to play Powerball is 18, except in Nebraska (19); Arizona, Iowa, and Louisiana (21).
Powerball winnings are exempt from state [[income tax]]es in Delaware, Pennsylvania, South Dakota, and the District of Columbia. There is no state income tax in South Dakota, and only on interest and dividends in New Hampshire and Tennessee. .<ref>The World Almanac and Book of Facts 2007 ISBN 0886879957 p.391</ref> Winnings from tickets purchased across state lines may be subject to tax from the state of purchase (with possible credit for taxes paid to one's own state or vice versa). ([[Florida]], joining in January 2009, also does not levy income tax.)
Maine started offering the then-Lotto*America in 1990, but dropped out of MUSL two years later, when Powerball began. Only in 2004 did Maine begin selling Powerball tickets.
[[Georgia (U.S. state)|Georgia]] left Powerball in 1996 to join the Big Game (now [[Mega Millions]]), the other major US multi-state lottery.
In 1998, [[Florida Lottery|Florida]] was given permission by the state government to join 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 state's existing lottery games. Until it joins Powerball in January 2009, Florida is the only lottery state that does not participate in either Powerball or Mega Millions.
[[California Lottery|California]] never had any intention of offering Powerball; however, it joined MUSL since there was a planned "international" lottery game; but it never got off the ground. It currently participates in Mega Millions.
==Licensed products==
In 2006 [[WMS Gaming]] released a range of [[slot machines]] under the Powerball brand name.
==Vista Sidebar Gadget==
In 2007 the [[Oregon Lottery]] released a new Windows Vista Sidebar gadget which relays the winning numbers for Powerball in live time. The gadget also provides large jackpot announcements. [http://www.oregonlottery.org Oregon Lottery]
In November 2007, [http://www.lotterypost.com Lottery Post] [http://www.lotterypost.com/news/165479 released] the [http://www.lotterypost.com/gadget Lottery Results Gadget for Windows Vista], providing near real-time winning numbers for Powerball, in addition to results for every other [[lottery]] game offered in each state. Likewise, new jackpots are pushed to the [[Windows Sidebar]] gadget after they are announced.
==References==
<references/>
* April Witt ([[January 30]], [[2005]]). "Rich Man, Poor Man". ''[[The Washington Post]] Magazine'', page 14.
* [[Jennifer 8. Lee]] ([[May 11]], [[2005]]). "Who Needs [[Giacomo_(horse)|Giacomo]]? Bet on the Fortune Cookie". ''[[The New York Times]]''. [http://www.nytimes.com/2005/05/11/nyregion/11fortune.html?ex=1270785600&en=37bef79604f97228&ei=5090&partner=rssuserland]
* [http://www.powerball.com/content/pressreleases/show_release.asp?release_id=2113 Press release detailing March 30, 2005 payout].
*[http://www.usamega.com/powerball-jackpot.htm usamega.com Powerball Jackpot Analysis]
* [http://www.las.iastate.edu/newnews/stanek1016.shtml Ed Stanek's contribution]
==External links==
*[http://www.powerball.com/ Official Powerball site]
*[http://www.powerball.com/pb_history.asp MUSL/Powerball history page]
{{start box}}
{{succession box |
before=The Big Game (now Mega Millions)|
title=World's largest lottery jackpot|
after=[[Mega Millions]]|
years=[[February 18]], [[2006]] – [[March 6]], [[2007]]}}
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[[Category:Lotteries in the United States]]
[[Category:Monopolies]]
[[Category:1992 establishments]]
[[Category:Mega Ball lottery games]]
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