US$1.5 billion lottery jackpot - everything you need to know

$1.5 billion is up for grabs in today's lottery. Photo / AP

Fingers are crossed, lucky charms dug out and prayers offered up as the United States prepares to draw the world's largest ever lottery.

At 5pm New Zealand time today one person could be US$1.5 billion ($2.3 billion) richer.

The jackpot hasn't been won since November 4, leading to the record Powerball windfall.

Here's everything you need to know:

How does Powerball work?

According to the Telegraph participants have until 10pm this Wednesday Eastern Time (4pm Thursday NZ time) to purchase their $2 tickets. On it are five numbers, plus a bonus number.

Every Wednesday and Saturday night at 10.59pm Eastern Time (Thursday and Saturday 4.59pm NZ time), five white balls are drawn from a drum of 69 balls and one white ball from a drum of 26.

The chance of winning the grand prize is one in 292.2 million.

The winner can choose to take all the money at once, or in annual instalments over 29 years.

Why is the total not $1.5 billion?

While the total prize up for grabs is $1.5 billion, the only way the winner can take the full amount is if they opt to take the 30 payments over 29 years.

If you want the money now in one lump sum, the jackpot is reduced to US$930 million ($1.43 billion), a cut of 38 per cent.

Other heavy taxes apply to the windfall.

The US government withholds 25 per cent if the winner takes the full amount and is a citizen or resident with a Social Security number. That reduces the take-home winnings by US$232.5 million ($356 million).

According to the Telegraph, residents who don't have a Social Security number will have 28 per cent withheld and foreigners 30 per cent.

Winners will also have to pay 14.6 per cent in federal taxes in April 2017. A bill of roughly US$135.8 million ($208.5 million).

According to CNBC, state and local income taxes further reduce the winnings by 15 per cent.

That reduces the net winnings to around US$422.2 million ($648 million).

Which are the best US states to win Powerball in?

Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington or Wyoming are where you want to live to win the money according to the Telegraph.

That's because these states don't have personal income tax.

The toughest states on tax are New York, Massachusetts, Minnesota and Oregon.

How has the US reacted?

It's fair to say the country has gone lottery crazy.

Ahead of the draw last Saturday, tickets were sold every single minute.

The media has been saturated with coverage on the lottery, publishing lucky places to buy tickets and suggestions of how to spend that much cash.

There are reports of some people spending $3000 on tickets.

Canadians have been flooding across the border to buy tickets and people in six states which do not participate were doing the same.

Can you buy tickets outside of the US?

Sort of.

Australian punters have a chance to enter the Powerball jackpot via Northern Territory gambling website Lottoland. The site opened for business less than a month ago, allowing Australian residents, for the first time, to enter international lottery draws.

Lottoland has experienced huge demand today, crashing their website this morning as Australian buyers flocked to buy tickets.

According to the Telegraph foreigners can buy tickets, but it is recommended they do so while in the US.

Illinois and Georgia are the only states offering ticket sales online. To buy one you have to be a resident of the state or physically present there when you click to purchase.
Powerball's website said that if you are not buying from a licensed retailer in the state, or from the official state lottery site open only to people in the US, "then you should not expect to be able to collect your prize".

Other foreign websites have emerged claiming to allow foreigners to purchase tickets but the legitimacy of these is questionable.

Lastly (and more importantly) what can US$1.5 billion buy you?

While the United States goes lotto-crazy, let's take a look at where and what more than two billion big ones could get you.

• Bill Gates would still be nearly 53 (52.8) times richer than you with a net worth of US$79.2 billion.

• You wouldn't even make it onto Forbe's 2015 list of the 500 richest people in the world.

• In New Zealand the richest Kiwi, Graeme Hart, would still be nearly 4 (3.9) times richer than you with his estimated fortune of NZ$9 billion.

• But, you could buy your own private island: East Sister Rock near Miami, currently selling for a comparatively tiny US$12.2 million.

• To get to your island all the way from the southern hemisphere, you could take your private jet, bought for just US$3 million.

• If the win was spread evenly in America, every one of the 318.9 million people in the country would receive US$4.70, enough to buy a Big Mac and a small fries.

• If it was spread in New Zealand, everyone would get NZ$514, enough to buy return flights for an Australian holiday.

• You could buy 209090909 Big Mac combos (at NZ$11 each) if you won the whole thing for yourself.

- nzherald.co.nz