Lottery jackpot is the total value of a lottery’s prize pool after all prizes have been claimed. Advertised jackpots are typically the sum of annuity payments winners receive over decades. Lottery operators reduce the odds of winning to keep the prize growing after a period of time without a winner, but jackpots are still based on chance. The chances of winning a jackpot are not affected by how frequently you play the lottery or whether you buy your tickets online or in store.
Unlike other investments, lottery winnings are taxable. But the actual tax burden is more complicated than just the 24% federal withholding. Depending on how much you win, you may also owe state and local taxes. Plus, if you choose to take your winnings as an annuity, you could end up with less than the advertised amount after taxes.
Inflation could also impact a jackpot’s final payout. For example, if interest rates are high and prices are rising, the yearly annuity payments will increase. But that doesn’t mean they will always rise by enough to make up for a decreasing money supply.