Powerball Jackpot Hits Largest-Ever $1.6 Billion: Here’s How Much Would Go to Taxes

A customer at a 7-Eleven store checks the numbers on his Powerball lottery ticket on August 7, 2013 in Chicago, Illinois. Photo by Scott Olson/Getty Images

The “world’s largest lotto prize ever offered” is now at stake during this weekend’s Powerball drawing, said the game operator on Friday.

Powerball’s operators increased the jackpot estimate on Friday morning to $1.6 billion, which has a cash value of $782.4 million, according to a news release. The drawing is Saturday, Nov. 5, at 10:59 p.m. ET.

The estimated jackpot for Saturday “has surpassed the world record amount previously set by Powerball in 2016, when tickets in California, Florida and Tennessee won a $1.586 billion jackpot.” And the Powerball jackpot now “breaks the world record for the Largest National Lottery Jackpot in the Guinness World Records,” the participating California Lottery wrote on Twitter.

If no one wins, it will “tie the game record for the number of consecutive drawings without a grand prize winner,” Powerball also wrote.

“This Powerball game is delivering exactly what our players want,” Powerball Product Group Chair Drew Svitko said in a news release. “We are witnessing history in the making with this $1.6 billion jackpot! What’s also exciting is that this run has already created millions of winners, including nearly 100 players who have won prizes worth $1 million or more.”

If one wins the entire jackpot, they'll have to pay a significant amount in taxes. If the winner decides to take the lump sum of $782.4 million, a 24 percent federal tax withholding shave $187.8 million from the sum, according to CNBC’s analysis.

The sudden windfall will bump the winner to a tax bracket of 37 percent, the highest federal tax rate. The winner would then pay the difference between 24 percent and 37 percent, according to finance website Fool.com.

CNBC’s analysis shows the winner who takes the lump sum will receive $492.9 million after the winner pays $289.5 million in total to the federal government. That comes before state taxes are due. Winners in states that charge taxes on lottery earnings will pay between 2.9 percent and 8.82 percent in addition, according to Fool.com.

Michigan lottery officials told USA Today that recently rising interest rates, which are raised by the Federal Reserve, have decreased the Powerball lump sum payout. The Fed again increased rates by another 75 basis points earlier this week for the fourth time in a row to deal with decades-high inflation.

No one has won the Powerball lottery since August. The odds of winning the $1.6 billion jackpot are 1 in 292.2 million, says Powerball.

Powerball is played in 45 states, Puerto Rico, the U.S. Virgin Islands, and the District of Columbia. Utah, Nevada, Hawaii, Alaska, and Alabama are the five states that don’t have a lottery.

Powerball has also warned people about possible scams. It says lotteries will never contact people via email, phone, or social media to inform them they’ve won a prize unless they specifically entered a lottery contest or promotion.

“If you are asked to pay a fee to claim a prize, you are likely being scammed, and you should not share any personal or banking information with those entities,” Powerball said.