Lottery, Bingo & Number Games

Lottery lump sum percentage

Also called

Cash option, cash value, lump sum¹

How it works

Winner chooses one upfront payment representing the present value of the jackpot, not the nominal annuity total¹²

Key points

• The lump sum is smaller than the annuity because of the time value of money: money now is worth more than the same nominal amount paid later².
• In taxed jurisdictions, the lump sum is further reduced by applicable income taxes²³.
• No single universal percentage defines the lump sum; it varies by lottery and current interest rates².

Where this term is used

• Lottery

Not the same as

• Annuity vs lump sum lottery — a comparison of the two payout methods, not a specific percentage
• Lump sum lottery payout — the same concept as the lump sum option, not a defined percentage

Related terms

Sources

1. Lump sum - Wikipedia en.wikipedia.org Defines lump sum and cash option in lottery context.
2. Lottery - Wikipedia en.wikipedia.org Explains the difference between annuity and lump sum and the effect of taxes and time value of money.
3. Lottery jackpot records en.wikipedia.org Notes that lump sum is smaller due to taxes and present value.

Sources are drawn from regulators, universities and published research, and each one is labelled with what it actually is — a preprint is not called a paper. Bookmaker and affiliate pages are never cited here, because a page that sells betting is not a neutral authority on it.