Across the United States, there is an unprecedented 'lottery frenzy.' One of the most popular lotteries in the U.S., Powerball, has not produced a winner for 38 consecutive drawings, pushing the jackpot beyond 1.3 trillion won. As the drawing on the night of the 30th at 11 p.m. (midday on the 31st Korea time) approaches, the entire nation is buzzing with the hope of 'what if.' Major media outlets such as The New York Times (NYT) and USA Today have noted that 'this scale is not just entertainment but a social phenomenon.'
According to major foreign news reports on the 28th (local time), the Powerball jackpot had ballooned to $950 million (approximately 1.32 trillion won) as of that day. This amount is the sixth largest in the history of U.S. lotteries. The jackpot increased again because no one matched all the winning numbers '9, 12, 22, 41, 61' and the Powerball '25' in the drawing on the 27th. Typically, winners appear within a month or two, but this time, it's been nearly four months since a winner emerged. If a first-place winner is announced in the next drawing scheduled for the 30th, the lump-sum payout before taxes is expected to reach about $428.9 million (approximately 596 billion won).
The odds of winning first place are 1 in 292.2 million. This is hundreds of times lower than the probability of dying from a lightning strike (about 1 in a million). Since the rules of the Powerball game were revised in 2015, the winning odds have decreased from 1 in 175 million. If no winner emerges, the prize money automatically rolls over each draw. As a result, jackpots in the hundreds of millions of dollars have become a frequent occurrence. The current Powerball involves selecting five numbers from white balls numbered 1 to 69, and one red ball numbered 1 to 26. To win the jackpot (first prize), all these numbers must be matched. The New York Times (NYT) analyzed that 'lowering the odds to increase rollover occurrences and attracting media attention through massive jackpot amounts is a strategy to maximize sales.'
However, even if one wins first place, the actual amount received is much lower than the jackpot. Winners can choose between a 'annuity option,' which pays out the jackpot over 30 years like an annuity, and a 'lump-sum option,' which pays out the jackpot all at once. If most prefer the lump-sum option, the amount received is drastically reduced to about half of the total jackpot.
Federal and state taxes are levied in double form. The Internal Revenue Service (IRS) withholds 24% of the winnings upfront. Additionally, when filing income taxes the following year, the highest income tax rate of 37% is applied to collect the difference. State-specific tax policies also vary. Nine states, including California, Florida, and Tennessee, exempt state taxes on lottery winnings. However, New York applies an additional tax rate of 10.8%, Maryland applies 8.95%, and New Jersey applies 8%. If a Powerball winner emerges from New York, choosing the lump-sum payment will leave them with only about $200 million, less than half of the original winnings. The political news outlet The Hill noted that 'depending on the state where you win, the net amount could vary by more than $100 million (approximately 139 billion won).'
The U.S. government expresses concern that the overheating of lotteries may lead to promoting gambling behavior, yet cannot ignore the reality that part of the sales proceeds is returned as public funding. Since its launch in 1992, Powerball has generated over $36 billion (approximately 50 trillion won) in public funds. Part of the sales revenue is allocated to each state government. This funding has been used for improving education systems, expanding public infrastructure, and environmental protection projects. However, some criticize the lottery as a 'regressive tax' that ultimately takes from the pockets of the lower-income population.
Some experts pointed out that the 'lottery curse' that begins after receiving a large sum could also become a problem. U.S. lottery laws regarding the anonymity of winners vary by state. Some states, like Delaware and Kansas, legally guarantee anonymity if the winners wish. In contrast, many states, like California, are required to disclose the names of winners, their city of residence, and information about where the tickets were sold. Lottery agencies maintain that 'publicity of identity is essential for transparency and fraud prevention.' As a result, winners often suffer from constant financial demands, jealousy, and envy from those around them, leading to broken relationships and even becoming targets for crime. Michael Norton, a professor at Harvard Business School, noted to the NYT that 'large winnings attract people you don't want in your life while damaging your relationships with those you truly care about.'
Experts indicate that maintaining anonymity is a crucial first step to avoiding the 'lottery curse' and becoming a 'happy winner.' Financial advisor Robert Pagliarini advised the NYT that 'establishing a trust or limited liability company (LLC) to receive winnings can legally conceal your identity.' He also suggested forming an 'asset management team' composed of lawyers, accountants, and investment experts, and advised against making any financial decisions for at least six months.