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Weak bond market lowers lottery annuity jackpots

Wisconsin LotteryWisconsin Lottery: Weak bond market lowers lottery annuity jackpots

Situation serves as reminder of how jackpots are calculated

The nation's financial crisis is causing a dip in one of the optional jackpots offered in Wisconsin's Megabucks lottery game.

The lottery said Tuesday that the annuity option — which has a jackpot paid in installments over 29 years — will decline for the first time because of a weak bond market.

State lotteries fund their annuity options by using ticket revenue to buy conservative, government-backed bonds.

For the Wisconsin lottery, that option had been projected to be worth $8.5 million last Saturday night, but by the time of the drawing, the bond market had changed.  The lottery now estimates the bonds it can buy will only fund an annuity of $8.2 million for Wednesday night's drawing.

The lesser lump-sum cash option relies on ticket revenues and hasn't been affected.

With some exceptions, lottery ticket sales across the nation continue to be strong.

AP

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8 comments. Last comment 8 years ago by DC81.
Page 1 of 1
JackpotWanna's avatar - squiz

United States
Member #4121
March 23, 2004
817 Posts
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Posted: October 29, 2008, 11:26 am - IP Logged

Take the cash and run!!!

    Avatar
    NY
    United States
    Member #23835
    October 16, 2005
    3474 Posts
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    Posted: October 30, 2008, 2:05 am - IP Logged

    I'm somewhat surprised this hasn't happened sooner. It would seemthat MM and PB are still getting very nearly the same rates they got 1,2 and 3 months ago. As far as taking the cash, I expect that even ChuckS and other lottery representatives would agree that taking the annuitynow is probably a poor choice. Nobody knows for sure what investmentswill do in the future, but you can probably do better than locking yourself into a 3% return for 20 to 30 years.

    Iwonder if this might influence lotteries to see the light and advertisethe only real measure of a jackpot's worth, and use the actual cash. Itcertainly won't help their bottom line to tell people there was nowinner last night, so the jackpot is being decreased by a milliondollars.

      Trained2beRich's avatar - home
      Houston,TX
      United States
      Member #35196
      March 13, 2006
      54 Posts
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      Posted: October 30, 2008, 9:45 am - IP Logged

      I'm somewhat surprised this hasn't happened sooner. It would seemthat MM and PB are still getting very nearly the same rates they got 1,2 and 3 months ago. As far as taking the cash, I expect that even ChuckS and other lottery representatives would agree that taking the annuitynow is probably a poor choice. Nobody knows for sure what investmentswill do in the future, but you can probably do better than locking yourself into a 3% return for 20 to 30 years.

      Iwonder if this might influence lotteries to see the light and advertisethe only real measure of a jackpot's worth, and use the actual cash. Itcertainly won't help their bottom line to tell people there was nowinner last night, so the jackpot is being decreased by a milliondollars.

      You're absolutely right....why did this not happen sooner?  I think other state lotteries will follow like California.  Take the cast and run but make sure is park it where the ENTIRE amoutt is safe...

      r

        wizeguy's avatar - animaniacs04

        United States
        Member #15143
        May 10, 2005
        414 Posts
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        Posted: October 30, 2008, 2:04 pm - IP Logged

        I'd take the cash amount! Always would have, always will.

          bashley572's avatar - starwars14
          West Side of Sunny Florida
          United States
          Member #55048
          September 8, 2007
          3371 Posts
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          Posted: October 31, 2008, 11:37 am - IP Logged

          Now is the BEST time to take the cash option.  The market is going to EXPLODE UP in the next couple of years as that is the effect of the fast drop right now.  So if you sit on your winnings and then jump in when it starts to explode you will make TONS more then if you took the annuity. 

          Money won is twice as good as money earned!

            dingo's avatar - lottery of-birth.jpg
            San Jose, California
            United States
            Member #42003
            June 26, 2006
            206 Posts
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            Posted: November 3, 2008, 1:24 am - IP Logged

            Now is the BEST time to take the cash option.  The market is going to EXPLODE UP in the next couple of years as that is the effect of the fast drop right now.  So if you sit on your winnings and then jump in when it starts to explode you will make TONS more then if you took the annuity. 

            I am not sure about market is going to EXPLODE UP in the next couple years, but CASH OPTION has always been in my favor. Cash is King. I want to think optimistically also, still every investment market is failing.

             

              OldSchoolPa's avatar - Lottery-057.jpg
              Gurnee, Illinois
              United States
              Member #49731
              February 12, 2007
              917 Posts
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              Posted: November 3, 2008, 10:13 am - IP Logged

              You're absolutely right....why did this not happen sooner?  I think other state lotteries will follow like California.  Take the cast and run but make sure is park it where the ENTIRE amoutt is safe...

              r

              I would park it in a diversified portfolio of mutual funds to include a portion in a money market fund...safe...yes; in a position to capitalize on market upswing and rebound...definitely; the last place I would park the ENTIRE amount is in some CD or savings account...safe...yes; in a position to keep up with inflation...NO (and yes, even inflation bites at those who are wealthy and rich).

              And for those BO-S's out there (oh, that stands for Barack Obama supporters), all I have to say is we can only hope that the Congress and administration that will surely follow in 2012 repeals much of what HE and the liberal Democrats in Congress will enact SHOULD he happen to get elected tomorrow and the Dems win majority in Congress.   Otherwise, we are going to be saddled with expensive, inefficient, ineffective, flawed social policies like Social Security, Medicare and Medicaid.

              If you are a senior citizen, I know that what I just wrote will seem like a person cursing in your face, but the truth is the truth.

              Get MONEY!!! Winning a JACKPOT lottery is all the HOPE and CHANGE I desire!!!  NOW give me MONEY!US Flag

              The guy who won the presidency in 2008 really won the lottery...he is now millions richer, travels in first class style, and even has a staff that would be the envy of the richest Powerball winner (she has a staff of 2). Every night he goes to sleep, he probably plays the close of Dave Chappelle's Show: I'm rich beyatch!

                DC81's avatar - batman39
                MI
                United States
                Member #54830
                August 31, 2007
                985 Posts
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                Posted: November 25, 2008, 3:23 pm - IP Logged

                It took me awhile for some reason to put it together but I started thinking that the current MM jackpot was kind of low for being on its ninth roll and after looking at the recent MM history and comparing it with where it has been after the same number of rolls as well as the sales info I guess the weak bond market is probably why unless they're setting up for a big roll over after tonight if it rolls or Friday if it rolls then. Sales which from what little checking I did seems to be a bit higher (by percentage) than usual at this level of JP and makes it even more attractive to take.

                Then again I could be (and probably) wrong...

                You can't predict random.