Multistate lottery games like Powerball and Mega Millions have been around since the late 1980s, offering players across multiple states the chance to win jackpots starting in the millions and sometimes reaching over $1 billion. These games are coordinated by organizations like the Multi-State Lottery Association and involve member state lotteries pooling their ticket sales and contributing to massive jackpot prizes. Players choose a set of numbers and then wait for randomized drawings to see if they match enough to win a prize. While the odds of winning the jackpot are extremely long, the potential payout keeps attracting players hoping to become overnight millionaires. Powerball and Mega Millions have similar structures but also some key differences when it comes to game rules, odds, jackpot sizes, and more.
Game History
The Powerball lottery began in 1988 as Lotto America, originally played in Iowa, Kansas, Missouri, Oregon, Rhode Island, West Virginia, and the District of Columbia. In 1992, the game was renamed Powerball and more states began participating, including Delaware, Idaho, Indiana, Montana, North Dakota, South Dakota, and Arizona. By 2009, Powerball was played in 33 states.
Mega Millions started in 1996 as The Big Game and was originally played in Georgia, Illinois, Maryland, Massachusetts, Michigan, and Virginia. In 2002 it was rebranded as Mega Millions and opened to more states, eventually expanding to 43 states plus Washington D.C. and the U.S. Virgin Islands by 2010.
Currently, Powerball is played in 45 states plus Washington D.C., Puerto Rico and the U.S. Virgin Islands. Mega Millions is available in 45 states plus Washington D.C. and the U.S. Virgin Islands. The only states that do not participate in either game are Alabama, Alaska, Hawaii, Nevada and Utah.
Sources:
https://en.wikipedia.org/wiki/Mega_Millions
https://www.npr.org/2023/08/09/1192893936/mega-millions-powerball-lottery-history-in-america
Jackpot Odds
The odds of winning the jackpot prize for Powerball and Mega Millions are extremely low. According to ABC7, the overall odds of winning the jackpot prize in Powerball are 1 in 292.2 million. For Mega Millions, the jackpot odds are slightly worse at 1 in 302.6 million.
This means it is highly unlikely for a single ticket to match all 6 numbers correctly to win the jackpot. However, it has happened to some lucky individuals. The key is consistency and persistence. Buying more tickets gives more chances to win, even though each individual ticket has low odds.
Secondary Prize Odds
The odds of winning smaller prizes differ between Powerball and Mega Millions. In Powerball, the odds of winning $4 for matching just the Powerball are 1 in 38.32. Matching one number wins $4, with odds of 1 in 91.98. Matching two numbers wins $7, with odds of 1 in 701.33. The odds of winning $100 for matching three numbers are 1 in 579.76.
For the $50,000 prize for matching four numbers, the odds are 1 in 36,525. The odds of matching four numbers and the Powerball for a $50,000 prize are 1 in 913,129.
In Mega Millions, the odds of winning $2 for matching just the Mega Ball are 1 in 37. The odds of winning $4 for matching one number are 1 in 89. The odds of winning $10 for matching two numbers are 1 in 701.
For matching three numbers, the odds of winning $10 are 1 in 489. For matching three numbers and the Mega Ball, the odds of winning $150 are 1 in 764. The odds of winning $5,000 by matching four numbers are 1 in 18,492.
So while the jackpot odds are longer in Mega Millions, the odds of winning smaller prizes are generally more favorable compared to Powerball.
Jackpot Size
Mega Millions and Powerball are known for their massive jackpot prizes that continue to grow until there is a winner. Some of the largest lottery jackpots in history have been from these two games.
The current record Mega Millions jackpot reached $1.537 billion on October 23, 2018 and was won by a single ticket in South Carolina [1]. The previous record Mega Millions jackpot was $656 million in 2012.
For Powerball, the current record is a $1.586 billion jackpot on January 13, 2016 that was shared by three winning tickets in California, Florida and Tennessee [2]. The previous record Powerball jackpot was $590.5 million in 2013.
Both games have had several jackpots surpassing $500 million and even $1 billion. But in general, Powerball jackpots tend to grow slightly larger on average compared to Mega Millions.
Prize Payout Structure
The prize payout structure and distribution for Powerball and Mega Millions differ in some key ways:
For Powerball, prizes are distributed as follows according to the Powerball Prize Chart:
- The jackpot prize is pari-mutuel, meaning it is shared equally among all players who match all 5 white balls plus the red Powerball. Jackpots start at $40 million and grow based on game sales and rolls without a jackpot winner.
- Second prize is $1 million for matching all 5 white balls but not the Powerball. This prize can grow to $2 million or more if there is a 2x multiplier.
- For the other non-jackpot prizes, the payout is fixed regardless of game sales. For example, matching 4 white balls plus the Powerball always pays out $50,000.
For Mega Millions, prizes are distributed as follows according to the How To Play page:
- The jackpot is pari-mutuel and shared equally among winners who match all 5 white balls plus the gold Mega ball.
- The second prize is $1 million for matching all 5 white balls but missing the Mega ball. This can grow to $5 million if the optional Megaplier (available in most states) is purchased.
- For the other tiers, the payouts are fixed amounts regardless of tickets sold or rolls without a winner.
In summary, both games distribute their top two prizes as pari-mutuel, with fixed payouts for the lower tiers. Powerball has slightly higher secondary prize potential, while Mega Millions offers the optional Megaplier to boost winnings.
Taxes on Winnings
Winnings from lottery games such as Powerball and Mega Millions are considered taxable income by the IRS and most states. This means federal and state taxes apply to any winnings you receive.
At the federal level, lottery winnings are taxed at the same rate as regular income based on your tax bracket. The top federal tax rate is currently 37% for income over $539,900 for single filers. State tax rates vary, but generally range from 0% to 13.3% depending on the state.
For large lottery jackpots, the top federal tax rate applies. However, state taxes can make a significant difference. For example, winners in California pay no state tax while New York has a top rate of 8.82%. Some states like Delaware, Florida, New Hampshire, Tennessee, Texas, Washington, and Wyoming do not have state income tax at all.
It’s important to consult with a tax professional to determine how much tax you will owe on lottery winnings. Withholding rates are usually set at 24% federal and 5-9% state depending on where you purchased the winning ticket. However, you may owe more or less when you file based on your total income and deductions for the year.
Where Prize Money Comes From
The prize money for both Powerball and Mega Millions jackpots comes from ticket sales. A portion of each $2 ticket sold goes into the jackpot prize pool. If there is no jackpot winner for a given drawing, the jackpot rolls over and continues growing for the next drawing. This rollover process is what allows the jackpots to reach such enormous sums.
For Mega Millions, 50% of each ticket sold goes into the jackpot prize pool. The other 50% is allocated to the lower tier prizes and operating costs. As more tickets are sold, more money flows into the jackpot. If no one matches all 6 numbers, that money stays in the jackpot fund and builds up over multiple rolls.
For Powerball, 50% of ticket sales goes to the jackpot and lower tier prizes, while the other 50% goes to operating costs and profits for the lottery. Again, rollovers are what allow the jackpot to grow to astronomical levels if there are no winners over multiple drawings.
So in summary, ticket sales directly fund the prize pools for both games. Rollovers are the key factor that enables the jackpots to reach such enormous sums when there are no winners for several consecutive drawings.
Which Game Has Better Odds
When it comes to purely mathematical odds, Powerball is slightly easier to win than Mega Millions. According to an AP News article, the odds of winning the Powerball jackpot are 1 in 292.2 million (source). For Mega Millions, the odds are a bit longer at 1 in 302.6 million.
This is because Powerball requires choosing 5 numbers from 1-69 plus the Powerball from 1-26, while Mega Millions involves picking 5 numbers from 1-70 and the Mega Ball from 1-25. The broader pool of numbers to choose from makes the odds just a bit tougher for Mega Millions.
However, both games have astronomical odds against winning the jackpot. The difference between 292 million and 302 million odds is quite negligible from a practical standpoint. As noted in The Hill, nearly two-thirds of all possible number combinations are typically covered for each drawing for both games (source).
In the end, the odds are astronomically low for both, so the slightly “better” Powerball odds offer little real advantage over Mega Millions in determining which game to play.
Summary
In reviewing the key differences between Powerball and Mega Millions, it’s clear that Mega Millions offers slightly better odds for the jackpot and other prize levels. The odds of winning the jackpot in Mega Millions are 1 in 302.6 million, compared to 1 in 292.2 million for Powerball. Mega Millions also has better odds for matching 5 numbers (1 in 12.6 million versus 1 in 11.7 million) and matching 4 numbers (1 in 931,001 versus 1 in 38,323).
However, Powerball tends to have larger jackpot sizes on average, due to slower jackpot growth between drawings. Powerball jackpots also tend to grow more quickly with higher ticket sales. The tradeoff is that while Powerball may offer bigger jackpots, Mega Millions offers slightly better odds across the board.
In the end, the odds are astronomically low for both games. A player’s best option is to manage their expectations and only spend what they can afford on lottery tickets. With strategic and responsible play, both Powerball and Mega Millions can be fun games to play, but winning still comes down to incredible luck.
