Key Difference: Mega Millions and Powerball are two different lotteries that are run across the United States. The main difference between the two is the fact that a ticket for Mega Millions costs $1 and offers a jackpot starting at $15 million, whereas a Powerball ticket costs $2 and offers a jackpot starting at $40 million.

Everyone has a fantasy of winning the lottery and retiring but the question is which lottery. While there are many various local and state run lotteries, there are two main large multi-state lotteries, Mega Millions and Powerball.

Powerball is the older of the two. It replaced Lotto*America in April 1992. It is an American lottery game sold in 47 jurisdictions (44 states, Washington D.C., Puerto Rico, and the US Virgin Islands) as a shared jackpot game. It is coordinated by the Multi-State Lottery Association (MUSL), a non-profit organization formed by an agreement with various U.S. lotteries. Mega Millions, on the other hand, replaced The Big Game. Its first drawing was in 2002, and it was known as The Big Game Mega Millions at the time. It is sold in all the same jurisdictions as Powerball, except  Puerto Rico. 

Both Mega Millions and Powerball are quite similar. The main difference between the two is that Powerball jackpots start at $40 million, while Mega Millions jackpots begin at $15 million. However, the largest ever jackpot won for Mega Millions was $656 million on March 30, 2012, while the largest jackpot won for Powerball was $590.5 million on May 18, 2013. The reason for the large jackpots was partly the number of tickets sold and rollover jackpots in case the previous jackpots were not won. Another difference between the two is the cost of a single ticket. A ticket for Mega Millions costs $1, whereas the ticket for Powerball costs $2.

When a person wins a jackpot, they have the option to receive their winnings as a lump-sum cash payment or as an annuity. This is the same for both Mega Millions and Powerball. The cash option provides a one-time payment of the winnings to the winner; however the amount of the cash option is less than the advertised jackpot. This is due to a variety of legal reasons including depending on the taxes and regulations of the winner’s resident state. It is also determined by sales. For both Mega Millions and Powerball, approximately 32 cents of each $1 sold goes into the jackpot prize pool.

However, the annuity option differs slightly in Mega Millions and Powerball. In the annuity option, the Lottery will use the money in the jackpot prize pool to provide the winner with payments over a period of time. A Powerball jackpot winner who selects the annuity option will receive 30 graduated payments, which means the payments will increase 5% over the last payment. On the other hand, a Mega Millions jackpot winner who selects the annuity option will receive 26 equal annual payments. The reason for the difference in the annuity options is mainly due to the different method of funding the annuity, which results in a different rate of return for each game’s investment.

Comparison between Mega Millions and Powerball:

Image Courtesy: philly.com, fox5sandiego.com