A lot of people seem to be confused about the amount of money in the jackpot. They think that when they take the lump sum, the lottery gives them a fraction of that bigger jackpot and pockets the rest. "They're scamming us!": This couldn't be further from the truth.
The "big number" you see advertised as the jackpot amount doesn't actually exist. That's not the amount of money they made (or project to make) from all the ticket sales. The money that the lottery actually has on hand to give away for that particular game, is the lump sum cash value. In other words, the lump sum is the "real" jackpot.
The annuity, on the other hand, is the projected value of an investment (an annuity). It's how much money that lump sum would be worth in the future, if the lottery commission took that lump sum money for you, and invested it themselves by purchasing an annuity.
Most people here probably know this already, but I wanted to get this out anyway for the people who may not know, because it's a bit frustrating every time I see someone who's complaining about the lump sum amount and thinks that the lottery is running some kind of scam when they see it compared to the annuity value.