The annuity factor, or the cost to fund an annuity prize, is another key component. The annuity factor is made up of interest rates for securities purchased to fund prize payments. The higher the interest rates, the higher the advertised Grand Prize. You might not realize that an economic reality like interest rates impact even the Powerball jackpot, but they do!
Wednesday’s jackpot might have been the second-biggest, but many expected it to actually surpass that $1.6 billion record if that lucky Massachusetts ticket-holder hadn’t hit on the right numbers. That’s because of what Kelly Tabor, a spokeswoman for the Colorado Lottery, calls “jackpot chasers,” casual players who rush out to buy a ticket when the jackpot gets big enough.
Before the agreement, the only places that sold both Mega Millions and Powerball tickets were retailers straddling a border; one retailer on the Sharon, Pennsylvania/Masury, Ohio border sold both Mega Millions (via the Ohio Lottery) and Powerball (Pennsylvania) before the agreement and continued to be the only retailer to sell tickets for both lotteries.
On May 18, 2013, the world's largest one-ticket jackpot, an annuity of approximately $590.5 million ($620 million today), was won by a Powerball ticket sold in Zephyrhills, Florida. On June 5, Florida Lottery officials announced the winner: Gloria C. MacKenzie, 84, who purchased the "quick pick" ticket at a Publix supermarket. MacKenzie chose the cash option of approximately $370.8 million, before Federal withholding; Florida does not have a state income tax.
This method specifically has faced criticism recently from a number of lottery organizers such as Camelot, the UK National Lottery organizers who are not happy with companies “selling tickets” (selling bets on outcomes of their established lottery draws) for prices sometimes even cheaper than Camelot themselves sells their tickets. This legal and corporate dispute looks set to continue for the foreseeable future, in the mean time you can continue to buy Powerball tickets online, only now you are aware of the key differences between the two business models.