Billion-dollar Payouts Spark Lottery Fever

One lucky winner has yet to claim the $1.3 billion Mega Millions lottery jackpot in August. Lottery watchers are waiting to see who won the prize. Until then, the sheer volume of the prize’s value has sparked renewed interest in purchasing lottery tickets globally. As the best bang for a buck or two, large lottery prizes attract millions of consumers who purchase tickets every week. Enormous record-breaking jackpots accrue when players purchase tickets, but no one wins.

The jackpot rolls over to the next drawing date and continues to accrue until someone chooses the winning numbers. Here’s a list of the largest jackpot prizes in the history of modern lotteries.

The world’s most valuable jackpots hail from Spain, where the Spanish Christmas Lottery is offering the largest jackpots in the world. In 2012, the total prize pool equaled $4.25 billion in American dollars in 2022.

However, the prizes are split among multiple winners throughout the country. In 2016, the largest prize pool was the equivalent of approximately $2.4 billion. In 2020, the largest prize was about $2.89 billion. Tickets are pre-printed with 5-digit numbers. Each number set is sold to multiple different buyers, resulting in several winners for the top prize.

United States

Lottery enthusiasts across the globe participate in America’s Mega Millions and Powerball lottery games. In January 2016, three Powerball winners from California, Tennessee, and Florida split a 1.586 billion jackpot, the largest jackpot in the world to date. In 2018, a single Mega Millions winner from South Carolina walked away with $1.537 billion before taxes.

In the United States, the internal revenue service takes 24% of all lottery winnings of more than $600. For winners from outside of the country, the tax bill is steeper at 30%.

Historically, lottery prizes began as annuity only payments, which were distributed to winners every year. However, with the popularity of the lottery globally, executives are now offering cash-out options. Lottery winners often accept the cash option, which immediately places an individual into a higher tax bracket with the newly rich.

European Union

Luckily for European winners, jackpots in the region are tax-free. The government finds other ways to obtain funds by taxing lotteries outside of the winnings. In the UK, the game operator and the government split wagers.

Camelot, the operator, puts the lion’s share of its earnings toward operating the lottery and retaining a profit. The government utilizes funds towards important public projects under Camelot’s good cause initiative. To date, the largest jackpot in Europe’s history is a $235 million Euromillions payout in 2022.

Philippines

Online Lottery prizes in the Philippines deserve an honorable mention. Any prize more than $1 million is a wonder. In 2018, two winners split a $21 million jackpot, which was the largest amount ever won in the Philippines at the time.

The largest jackpot winner in history is Gloria Mackenzie. Before Mackenzie died in 2021, she’d soared into the history books in 2013 as the largest single Powerball ticket winner with a $590 million jackpot. After taking the cash-out option and paying taxes, she took home $278 million.

She gave half the winnings to her son, who also administered her money as power of attorney. In 2019, she sued her son and the financial advisor he chose for breach of fiduciary duty for choosing an investment strategy, which she claimed cost her millions in fees with little return. At the time of winning, Gloria was an 84-year-old widow with little financial management education.

It’s important to note that large prizes come with responsibilities. Both million and billion-dollar winners seek advice from attorneys and financial advisors about how to manage and invest the funds. Winners receive numerous requests for donations and handouts, which is the reason many accept large payouts anonymously or take time put things in order before coming forward to claim large jackpot winnings.