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Jackpots FAQ
When a player wins a Hot
Lotto or Powerball jackpot, what's the difference between taking the annuity or
lump-sum payout?
An annuity is paid out over several years whereas a lump-sum payout is a single cash
payment. When a jackpot is won, each state participating in the game forwards its share of the
proceeds to make the jackpot payment. The shares are sent to the Multi-State Lottery
Association (MUSL), based in Urbandale, Iowa. Once the money used to fund the jackpot is
received, MUSL has two options: 1) MUSL obtains bids from brokers for zero-coupon bonds
that match the various maturities needed to pay out winnings for several years (The first year
is not included in the annuity, it’s paid immediately to the winner). Upon receiving and
accepting the bids, the annuitized jackpot amount is set and the initial payment to the winner
is calculated. 2) MUSL totals the amount received from sales and awards the all-cash jackpot.
The exact amount of the all-cash jackpot can only be estimated and is usually about half the
amount of the estimated annuity jackpot. Regardless of the method chosen by the winner, the
same amount of funds are available to the winning jackpot.
Which Iowa Lottery games
offer an annuity option?
Since Nov. 2, 1997, Powerball has offered the option of paying the jackpot out in a lump
sum or the traditional annuity payment. Hot Lotto also allows players the option of a lump-sum
payout or traditional annuity payment. Pick 3, Pick 4 and Iowa’s $100,000 Cash Game only
offer cash payouts.
Which is better to take,
the annuity or lump-sum payout?
This depends on the individual's specific circumstances and needs. The lottery suggests
the winner contact a trusted financial or legal adviser prior to making this decision. The winner
has 60 days from the date the prize is claimed to decide.
What happens to an
annuity prize if the winner dies?
Once the money is won, it always belongs to the
winner. Iowa law provides that if the winner
should die, the money would go to the winner's
estate. The lottery will make future payments as
determined by the estate or the court.
Has anyone ever
considered capping jackpots when they get high?
The Iowa Lottery offers a big jackpot game like
Powerball because it appeals to many customers.
THe lottery's sales history shows sales grow as
the jackpot grows. Regular players play a bit more
and new players get into the game. By capping the
jackpot, the lottery would never get the attention
of those players who like to play for really big
money.
If a jackpot prize is not
claimed, what happens to the unclaimed money?
It's very rare that an Iowa Lottery jackpot is
not claimed; in fact, it has happened only once -
back in 1987. Unclaimed Powerball and Hot Lotto
jackpots go back to the states in the proportion
of sales for that draw. Unclaimed prizes, other
than the jackpot, go into prize pools for future
games, so players in Iowa have another chance at
the cash. Every year, many lesser prizes do go
unclaimed, so check your tickets!
If a player already won a
jackpot, can he/she keep playing to win another? How long does it take a player to collect a
jackpot after he/she turns in the ticket?
Players can keep playing even after they've won a jackpot. Although it's rare,
the Iowa Lottery has had cases of a winner winning more than one jackpot. In Powerball and
Hot Lotto, about two weeks after a player brings in the winning ticket, the lottery can cut the
winner the first check. (It takes that amount of time for the rest of the states in the game to
send money to the winning state.) For all other games, players can get their money the same
day they bring their winning ticket to the lottery. Generally about 45 minutes after players
walk in the door, they walk out with a check!
Are lottery prizes
transferable and if so, how does a person go about notifying the lottery that he/she is to be
the new recipient of these payments?
Prize winners who live in Iowa may be able to assign winnings through the court system.
The lottery will make payments according to court order.
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