October’s $1.5 Billion Jackpot Winner Could Be Missing Out On $40,000 A DAY
Tuesday February 19th 2019It has been four months since one lucky player from South Carolina won a Mega Millions jackpot worth over $1 billion. With just two months to go until the claim deadline, they have already missed out on millions of dollars in interest, equivalent to around $40,000 every single day.
Tardiness Is Costing the Winner
As the deadline approaches for the second-biggest lottery prize ever won, speculation is building about the mystery winner. It has been assumed that the ticket holder is getting their finances in order and was waiting to claim the prize in the new year to lessen the impact of state and federal taxes.
2019 is well underway now, though, and there has been no word from the South Carolinian holding on to the billion-dollar ticket.
Money may no longer be an object to whoever that person is, but the amount they have lost out on already from interest is in the millions of dollars, more than some other lotteries even offer as their jackpot prize.
If the winner claimed their winnings immediately after the October 23 drawing and took the cash option of around $878 million, they would have been left with just shy of $600 million after state and federal tax withholdings.
Had they then deposited that money into an account or series of accounts that offered an annual interest rate in the region of 2%, they could have made $4 million off the interest alone by now. That’s around $40,000 – not far off the average yearly salary in the U.S. – every single day.
In reality, they would probably make a little less than that, as any interest gained off the winnings would also be subject to tax. But four months down the line, most winners would have received financial advice and have an investment strategy set up that returns even more than this, so the amount of money lost could be in the tens of millions of dollars
In the world of Powerball and Mega Millions, where prizes worth hundreds of millions of dollars are routinely talked about, it’s easy to lose sight of how much October’s jackpot was actually worth. The fact that the winner could be earning the same amount of money every day as the average American earns in a year or more, and that they are letting this money slip away, lends some credibility to the theory that the winning ticket has been lost and will never be claimed at all.
State and Store Also Missing Out
The winner isn’t the only person who would miss out if that lucky ticket has in fact been lost. The state of South Carolina would lose out on around $61 million worth of taxes if the winner doesn’t come forward before the April 21 deadline. The U.S. government would not get the $220 million in federal taxes it is due either.
It has gotten so late that South Carolina lawmakers are planning upcoming budgets without the income from those taxes. The state’s Revenue and Fiscal Affairs Office Executive Director Frank Rainwater said: “It was reasonable to assume that [the money could be included in the budget] in November, but two-thirds or three-quarters of the way through…they have not come forward.”
C.J. Patel, the owner of the KC Mart in Simpsonville, SC, where the winning ticket was sold, will also miss out if the winning ticket isn’t presented in time. Stores that sell jackpot-winning Mega Millions tickets receive a bonus equivalent to 1% of the prize, capped at $50,000. That’s $50,000 that Patel won’t see if the winner doesn’t claim.
What Happens to the Money If It’s Not Claimed?
If the worst happens and the winning ticket holder doesn’t claim before the April 21 deadline, the money will be re-distributed to each of the 46 jurisdictions that participate in Mega Millions, according to the proportion of tickets they sold while the jackpot was rolling over.
While official numbers haven’t been released, data from 2016 shows that South Carolina accounts for around 2% of lottery sales in the U.S., so based on that, the state would get $15 million to $20 million of the unclaimed money back (based on the jackpot’s $878 million cash value, not the $1.5 billion annuitized jackpot).
The SC Education Lottery would then use that money to fund public education programs in the state. So while the prize going unclaimed would be unfortunate for all parties and would be by far the biggest jackpot ever to go unclaimed, it would not be a total loss for the state of South Carolina and its residents.
It Won’t Be the Last Billion-Dollar Jackpot
October’s $1.53 billion jackpot was just the second time any lottery in the world had hit the billion-dollar mark, after the $1.58 billion Powerball jackpot that was shared by three winning tickets in January 2016. It won’t be the last time we see a prize hit ten figures, though.
The Powerball and Mega Millions jackpots are currently worth $282 million and $206 million respectively. Previous trends show us that once they reach these sorts of amounts, jackpots increase exponentially, and can eventually climb by hundreds of millions of dollars with just one rollover.
The unclaimed Mega Millions prize, for example, took just five weeks to increase from $207 million to its final $1.5 billion value. If the current jackpot increases at a similar rate, it would almost certainly hit the same mark by the time the April claim deadline for October’s winner comes around. What an exciting few weeks that would be in the world of U.S. lotteries.
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