Why billions of dollars in lottery prizes go unclaimed

History of the lottery
History of the lottery

Nobody hit the Powerball Jackpot Wednesday night, but there are still 3 million winning tickets out there.

The question is how many of them will be claimed.

You'd be surprised how many winning tickets are never turned in.

There are literally billions of dollars in unclaimed lottery prizes each year, according to research from lottery expert Brett Jacobson. He collects data from every state lottery commission for a lottery app he runs, and his data shows there were $2.89 billion in unclaimed lottery prizes in the 12 months ending June 2017.

Most of the unclaimed prizes are small. Powerball has a $4 prize for picking just the Powerball number correctly, while Mega Millions has a $2 prize for getting its Mega Millions number.

But some of the secondary prizes can be worth $1 million or more.

Wednesday's Powerball had secondary prizes worth $29.97 million. There were five tickets worth $1 million each sold in Florida, California, North Carolina, New York and Oregon, and another ticket in Florida is worth $2 million. And it's very possible some of those million-dollar prizes will never be claimed.

Related: What tax reform means for the next big lottery winner

There were 167 prizes worth $1 million or more went unclaimed in fiscal 2017 alone, according to Jacobson's data. Some of those prizes can still be claimed, but some states only give ticket holders six months to come forward.

"People don't even realize there are secondary prizes," said Jacobson.

And even if they do know, people often don't bother to check their tickets once they hear there was no jackpot winner or the winning ticket was bought out of state.

Even some winning instant scratch-off game tickets are never handed in to claim a prize, Jacobson said. People will lose a winning ticket or put it aside and forget to turn it in during the allowed time.

There have even been five jackpot winners who have failed to claim their prizes in the last 16 years, according to the lottery data that's available.

Those unclaimed prizes range from $31 million for a ticket purchased in Queens, New York in August of 2006, to $77 million for a winning ticket purchased in Georgia in June 2011. The oldest unclaimed ticket is a $68 million winner purchased in New York on Christmas Eve of 2002.

All these prizes have since expired, so even if someone found the winning tickets today, they'd be out of luck.

Of course, unclaimed jackpots are still the exception. Big winners almost always collect their winnings, although many do it through trusts or other means to keep their identity under wraps.

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