California Sells $7.3 Million Mega Millions Ticket as $743 Million Jackpot Rolls On

Q: Why was California’s second-place Mega Millions prize worth $7.3 million, and how much would the winner actually keep?

California’s second-place Mega Millions prize was worth $7.3 million because California does not pay fixed non-jackpot prizes for Mega Millions. Instead, those prizes are pari-mutuel, meaning the money for lower-tier winners is pooled and divided based on ticket sales and how many winners there are in each category. In this case, the Palmdale ticket matched five white balls but missed the Mega Ball, and because there were no jackpot winners, that second-tier payout in California came to $7,326,642 rather than the standard $1 million seen in most states. How much the winner actually keeps depends mainly on federal taxes. California does not tax lottery winnings, so there is no state income tax on the prize. But federal withholding of 24% typically applies upfront to prizes over $5,000. On a $7,326,642 prize, that would reduce the immediate payout to about $5.57 million. The final amount kept could be lower when the winner files a federal tax return. Lottery winnings are taxed as ordinary income, and a winner at this level would likely face the top federal marginal rate of 37%. If that full rate applies, the total federal tax bill would be about $2.71 million, leaving roughly $4.61 million after federal taxes. So, before taxes the prize is $7.33 million; after the standard federal withholding it is about $5.57 million; and after a likely full federal tax bill, the winner may keep about $4.6 million.

Q: What made this Palmdale ticket one of the biggest near-jackpot Mega Millions wins in recent years?

It stood out because the Palmdale ticket paid an unusually large second-place prize — $7,326,642 for matching five of the five white balls but missing the Mega Ball by one number. Coverage of the drawing described it as the second-largest second-place Mega Millions prize since 2014. The size of the prize was tied to the enormous jackpot run. The ticket was sold for the July 21 drawing, when the top prize had reached $707 million and then rolled to $743 million after no one matched all six numbers. In California, non-jackpot lottery prizes are paid on a pari-mutuel basis, meaning the amount can rise or fall depending on ticket sales and how many winners share that prize tier. That structure helped push this near-miss payout far above the fixed second-tier prizes seen in many other states. The ticket came from Alrabadi Gas & Mini Mart in Palmdale and matched the five white numbers drawn — 25, 37, 59, 68 and 70 — but not the Mega Ball, 10. Missing the jackpot by just one number while still winning more than $7.3 million is what made it one of the biggest near-jackpot Mega Millions wins in recent years.

3 articles · Updated · FOX 11 Los Angeles · Jul 22

$7,326,642 winning ticket was sold at Alrabadi Gas and Mini Mart on East Palmdale Boulevard in Palmdale, according to the California Lottery late Tuesday.
No one matched all six numbers in the July 21 Mega Millions drawing, leaving the top prize unclaimed and pushing the jackpot to $743 million for Friday's drawing.
The July 21 winning numbers were 25, 37, 59, 68 and 70, with Mega Ball 10.
Mega Millions winners can choose an annuity with 30 payments or a lump sum, with final take-home amounts reduced by taxes depending on state rules.