How Much Can You Win?
With the winter blues settling in, I decided to take another look at what the international lotteries are offering in their current jackpots. I like to do this a couple of times the year as I tend to get in a rut with the lotteries I play.
US Dollars versus Euros
Part of looking at some of the incredible jackpots offered internationally is looking at the currencies they are offered in. Take Oz Lotto for instance with a jackpot of AUD 6 million which translates to just over USD 5 million. That’s nothing to sneer at, but at the same time, I wouldn’t call it a mega jackpot – not yet. When we talk mega jackpots, how about EuroMillions which is currently at € 15 million? This translates to around USD 20.4 million. Keep in mind this is paid out as a lump sum tax-free!
Annuity versus Cash Payout
Then there is the fact that many of the big international jackpots are annuities and not straight jackpot lump sums. This means the jackpot amount advertised is not actually what a player gets in hand if they win. Take US Mega Millions’ next draw of USD 20 million. The actual value for a cash payout would be USD 10.6 million. Take off the federal tax applied and it is now down to USD 7.9 million. For foreigners, take off an additional 5%. Depending on which state your ticket was purchased from, state tax might also apply. US Powerball’s next draw has an advertised jackpot of USD 70 million as an annuity, but a cash payout of USD 38.6 million less federal tax which makes it worth USD 28.9 million.
Compare to this Canada’s Lotto Max’s current jackpot for this week of CAD 50 million. It will be paid out in a lump sum and tax-free. Even with the exchange rate that still means USD 46.2 million. On top of this, Lotto Max has hit its maximum cap so each week that it is not won, Lotto Max will increase the number of CAD 1 million extra bonus draws until it is won.
Tax versus Tax-Free Jackpots
There are a lot of arguments on whether lotteries should be claimable tax-free or not. Canada discussed the issue and then agreed that their lotteries already were supporting government initiatives so taxing winners would be double dipping. The United States collects the tax and has no intention of changing that. Australia and the UK’s lotteries are tax-free as well as many European lotteries. Spain now has a tax on lotteries at a rate of 20%. When you are choosing the lottery you want to play, it’s important to take a look at what you are going to win and who is going to take a piece of your action.
Deciding What to Play
There are a lot of incredible international lotteries out there to choose from. Spain’s La Primitiva’s next draw is a cool € 48 million. Italy’s SuperEnaLotto is at € 23.6 million. EuroJackpot is at € 17 million. They all have their odds, their own specific rules, and regulations and vary between annuities versus a lump sum. It’s important to take a look at the game you want to play and how it operates. You can’t win unless you play.