THE Powerball player who landed a $328.5 million jackpot has finally come forward and claimed his prize – but saw huge deductions before walking away with the cash.
Abbas Shafii, from Oregon, became the popular game’s first jackpot winner of 2025 when he bought the ticket from a Fred Meyer store.
GettyA Powerball player came forward and claimed the $328.5 million prize[/caption]He shattered odds of one in 292 million to land the prize but ended him losing a significant amount of the cash before walking away with a dime.
Shafii, 79, faced a conundrum when he collected his winnings.
He could either have received the $328.5 million over three decades, or pocket a single payment.
Shafii chose to receive the lump sum, which was worth $146.4 million, per Powerball chiefs.
The decision over whether to take the lump sum or annuity is a choice that has sparked huge debate among lotto lawyers and financial advisers.
Jared James, who founded the lottery algorithm Lotto Edge, previously told The U.S. Sun winners should take the annuity.
He explained this route makes it easier to turn down requests for cash.
Andrew Stoltmann, a lawyer, said taking the lump sum is a mistake made by around 90% of lottery winners.
He warned some winners do not have the correct infrastructure to be able to deal with handling such a large amount of cash.
Shafii has to pay federal and state taxes on his windfall.
He will have to pay 24% to the federal government in tax.
Players have to pay 24% on anything they win over $5,000.
This means that another $35 million will be deducted from the prize pot.
Shafii will have to pay a tax to the state. In Oregon, winners must pay 8% in tax.
This equates to more than $11.6 million.
The 8% tax rate is one of the highest American gamblers have to pay.
In New Jersey, the tax rate is also 8% while in Maryland, the rate stands at 8.75%
But, in New York, players must pay 10.9%.
Some states, however, do not tax lottery winners.
Winners in California, Florida and Texas enjoy this reprieve.
Lottery winnings: lump sum or annuity?
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you’ll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
Experts have varying opinions on whether to take the lump sum or take the annuity.
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