I don't think they got screwed at all.
The choice is cash option or annuity. Anyone that would take the annuity is whacko, but the nice folks at the Powerball place hit you with an incredible vig for the pleasure of getting a big bulk of your win up front. I suspect the remaining funds get spread among Powerball states. You can do a helluva lot more with a nice chunk of cash as opposed to a cracker each year for the next twenty years!
Near as I can figure, these 8 folks kicked in $8 and got 8 quick pick tickets. Happens that the first ticket was the bingo. So, they put in $1, and came out with $22.1m each before taxes. After taxes they NET $15.5m. Not a shabby return.
I suspect with prudent investments, each could live like a king (or queen) off the interest alone, never touching the principle. Nice situation to have, no? Oh, let's not forget they all worked in some capacity for a Con Agra meat packing plant in Lincoln, NE. I suspect they will all be retired within the next week or two.
As amazing as this win is for these folks, imagine...many major league baseball players make this and more in about 6 months, year in and year out for a lot of years, and don't do much more than play a kid's game, although they do play it very, very well.
BTW, isn't megabucks paid in annuity only form? So, let's say you win a $20m megabucks. They give you $1m per year for 20 years. How much interest did the megabucks folks enjoy off YOUR win, and how much interest (not to mention investment opportunity) did you lose? I'd say a helluva lot.
So, no, I don't think they got screwed.