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Illinois Lottery not paying big winners because state legislature won't pass budget

Topic closed. 62 replies. Last post 1 year ago by DELotteryPlyr.

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dpoly1's avatar - driver
PA
United States
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October 16, 2008
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Posted: August 30, 2015, 12:09 pm - IP Logged

And this is why you never ever ever take the annuity, take the cash and run because you never know what will happen down the road, especially with these governments. 

I Agree! 100%

dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

 

Eschew Poverty ........... Vote Conservative!

    Teddi's avatar - Lottery-008.jpg

    United States
    Member #142499
    May 13, 2013
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    Posted: August 30, 2015, 7:22 pm - IP Logged

    I would think if you chose an annuity before this budget crisis it would be safe. The annuity would be separate  from IL budget unless you needed to claim a winner right now.

    Supposed to and actuality are two different things here. In the same way lottery winners are supposed to be getting paid but in reality they are not, I see nothing saying that winners who took the annuity prior to this fiscal mess are being paid. Because if they have money for the annuity, they should have the money for the new winners as well. This reads as every payment over $25,000 is being frozen, so I say again, take the lump sum and don't ever look back. You leave yourself open for headaches with annuities.

    I might wake up early and go running.  I might also wake up and win the lottery.

    The odds are about the same.

      savagegoose's avatar - ProfilePho
      adelaide sa
      Australia
      Member #37136
      April 11, 2006
      3300 Posts
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      Posted: August 31, 2015, 5:53 am - IP Logged

      " We IOU'd some folks! "

      2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

      keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

        Gleno's avatar - Lottery-001.jpg
        New Jersey
        United States
        Member #80354
        September 25, 2009
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        Posted: August 31, 2015, 9:42 am - IP Logged

        8/31/15

        Excellent point. If they are not going to payout on big prizes , which is selective discrimination, then a lawsuit should be filed by the winners first. 

        If they don't file within say 30 days then hope some folks in IL get a class action suit started against the Ill Lottery commission,for breach of contract.

        Group Hug

          Get paid's avatar - Lottery-062.jpg
          texas
          United States
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          February 11, 2014
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          Posted: August 31, 2015, 2:55 pm - IP Logged

          Typical politicians,the people in that state should stop playing until they have a budget.

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            Maryland
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            January 2, 2015
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            Posted: August 31, 2015, 4:09 pm - IP Logged

            Typical politicians,the people in that state should stop playing until they have a budget.

            power to the player!!! Drum

              Avatar
              Wyomissing, PA
              United States
              Member #161050
              November 15, 2014
              301 Posts
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              Posted: August 31, 2015, 5:24 pm - IP Logged

              And this is why you never ever ever take the annuity, take the cash and run because you never know what will happen down the road, especially with these governments. 

              Other risks include insolvency of one or more of the annuity companies. Many would assume the state government would backstop such losses, but not necessarily so. Pennsylvania Lottery says this:

              What happens to the prize money if a company who got an annuity bid goes bankrupt?
              Published 08/04/2003 01:14 PM | Updated 10/21/2010 04:23 PM

              "The obligation to pay the prize is based upon contract law. The method that the state uses to fund the prize is a business decision. During a three-month period in 1986, the Lottery funded prizes through the purchase of Treasury notes, but then switched to annuity contracts. If we purchase an annuity from a company that goes bankrupt, the state still has a contractual obligation, so the Lottery would pay the prize.

              As a footnote, although we do use the lowest bid, it is the lowest bid from a bidder that qualifies to submit a quote. Those insurance companies qualifying are all companies whose names are easily recognizable to the general public. In addition we have a limit on the amount of outstanding obligations we fund through any one company."

              I've underlined some portions for emphasis. No mention of any government guarantee. Contractual obligations can be broken / reworked - courts do it all the time. The second paragraph in the PA Lottery response alludes to the risk of default by emphasizing the PA Lottery spreads the risk around.

              Another risk, which briefly occurred in New Hampshire several years ago (law was promptly repealed), is additional tax being levied on annuity lottery payments. Taking the money upfront avoids this potential risk...

              States are desperate for revenue. There's talk in PA of taxing lottery winnings. Wonder if that will apply to PA Lottery annuity payments too? It could, which will be a nasty surprise to past winners who opted for the annuity and are still receiving payments. Those future payments could be upwards of 4% less than previously, if PA changes the law and taxes lottery winnings. Hopefully, it doesn't happen. All the more reason, to reiterate your comment, take the cash and run!

                dpoly1's avatar - driver
                PA
                United States
                Member #66141
                October 16, 2008
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                Posted: August 31, 2015, 5:49 pm - IP Logged

                Other risks include insolvency of one or more of the annuity companies. Many would assume the state government would backstop such losses, but not necessarily so. Pennsylvania Lottery says this:

                What happens to the prize money if a company who got an annuity bid goes bankrupt?
                Published 08/04/2003 01:14 PM | Updated 10/21/2010 04:23 PM

                "The obligation to pay the prize is based upon contract law. The method that the state uses to fund the prize is a business decision. During a three-month period in 1986, the Lottery funded prizes through the purchase of Treasury notes, but then switched to annuity contracts. If we purchase an annuity from a company that goes bankrupt, the state still has a contractual obligation, so the Lottery would pay the prize.

                As a footnote, although we do use the lowest bid, it is the lowest bid from a bidder that qualifies to submit a quote. Those insurance companies qualifying are all companies whose names are easily recognizable to the general public. In addition we have a limit on the amount of outstanding obligations we fund through any one company."

                I've underlined some portions for emphasis. No mention of any government guarantee. Contractual obligations can be broken / reworked - courts do it all the time. The second paragraph in the PA Lottery response alludes to the risk of default by emphasizing the PA Lottery spreads the risk around.

                Another risk, which briefly occurred in New Hampshire several years ago (law was promptly repealed), is additional tax being levied on annuity lottery payments. Taking the money upfront avoids this potential risk...

                States are desperate for revenue. There's talk in PA of taxing lottery winnings. Wonder if that will apply to PA Lottery annuity payments too? It could, which will be a nasty surprise to past winners who opted for the annuity and are still receiving payments. Those future payments could be upwards of 4% less than previously, if PA changes the law and taxes lottery winnings. Hopefully, it doesn't happen. All the more reason, to reiterate your comment, take the cash and run!

                AND as you know, we do not have a budget in place here in PA. SO it would be tough luck if the annuity company were bankrupt.

                If I win, it will be the cash option for me!

                Dance

                dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

                 

                Eschew Poverty ........... Vote Conservative!

                  zinniagirl's avatar - flower avatar_0026.jpg
                  nc
                  United States
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                  October 26, 2010
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                  Posted: August 31, 2015, 7:35 pm - IP Logged

                  No budget here in NC for three months either, but still paying prizes.

                    Coin Toss's avatar - shape barbed.jpg
                    Zeta Reticuli Star System
                    United States
                    Member #30470
                    January 17, 2006
                    10353 Posts
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                    Posted: August 31, 2015, 8:53 pm - IP Logged

                    No budget here in NC for three months either, but still paying prizes.

                    zinniagirl,

                    NC doesn't have Chicago to contend with.

                    We have a saying in Illinois, "The dog barks in Chicago and wags its tail in Springfield (state capital).

                    Bang Head

                    Illinois lottery:
                    Administrative Offices

                    101 West Jefferson Street Springfield, IL 62702
                    122 South Michigan Avenue, 19th Floor Chicago, IL 60603

                    Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                    Lep

                    There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

                      Avatar
                      Maryland
                      United States
                      Member #162434
                      January 2, 2015
                      889 Posts
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                      Posted: August 31, 2015, 8:55 pm - IP Logged

                      Other risks include insolvency of one or more of the annuity companies. Many would assume the state government would backstop such losses, but not necessarily so. Pennsylvania Lottery says this:

                      What happens to the prize money if a company who got an annuity bid goes bankrupt?
                      Published 08/04/2003 01:14 PM | Updated 10/21/2010 04:23 PM

                      "The obligation to pay the prize is based upon contract law. The method that the state uses to fund the prize is a business decision. During a three-month period in 1986, the Lottery funded prizes through the purchase of Treasury notes, but then switched to annuity contracts. If we purchase an annuity from a company that goes bankrupt, the state still has a contractual obligation, so the Lottery would pay the prize.

                      As a footnote, although we do use the lowest bid, it is the lowest bid from a bidder that qualifies to submit a quote. Those insurance companies qualifying are all companies whose names are easily recognizable to the general public. In addition we have a limit on the amount of outstanding obligations we fund through any one company."

                      I've underlined some portions for emphasis. No mention of any government guarantee. Contractual obligations can be broken / reworked - courts do it all the time. The second paragraph in the PA Lottery response alludes to the risk of default by emphasizing the PA Lottery spreads the risk around.

                      Another risk, which briefly occurred in New Hampshire several years ago (law was promptly repealed), is additional tax being levied on annuity lottery payments. Taking the money upfront avoids this potential risk...

                      States are desperate for revenue. There's talk in PA of taxing lottery winnings. Wonder if that will apply to PA Lottery annuity payments too? It could, which will be a nasty surprise to past winners who opted for the annuity and are still receiving payments. Those future payments could be upwards of 4% less than previously, if PA changes the law and taxes lottery winnings. Hopefully, it doesn't happen. All the more reason, to reiterate your comment, take the cash and run!

                      I know states are seeing there costs go up due to commitments they made to employees over the last 30-50 years, in the form of pensions & insurance.  WHY must the rest of us pay the price since THEY offered WAY TOO much 30 years ago? I think the contracts for pensions and insurance should be reopened to stop the bleeding of the states.  Soon they will be NOTHING left but them paying pensions & health insurance, all other state operations will be cut to cover those.

                        Gleno's avatar - Lottery-001.jpg
                        New Jersey
                        United States
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                        September 25, 2009
                        705 Posts
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                        Posted: September 1, 2015, 12:57 am - IP Logged

                        This story has made it to Nightly Business Report on TV. Is it going to bring transparency to Ill Politics?

                        No No

                          Funtimz's avatar - Lottery-022.jpg

                          United States
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                          March 30, 2015
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                          Posted: September 1, 2015, 3:46 am - IP Logged

                          Wonder if people stop playing the big ticket prizes or if they went to neighboring states would this light a fire under those politicians

                          Take Risks: If you win, you'll be happy.  If you lose, you will be wiser...

                            Coin Toss's avatar - shape barbed.jpg
                            Zeta Reticuli Star System
                            United States
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                            January 17, 2006
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                            Posted: September 1, 2015, 7:56 pm - IP Logged

                            Here's a little more to the story, this is from the Southern Illinois University newspaper:

                            Rossi would not speculate on what effect the delays might have on the lottery's revenues if people choose to stop playing until the state resolves the budget crisis, and he was not aware of any effort to pass a special measure to allow the comptroller to pay out winnings while lawmakers and the governor haggle over the budget.

                            State Rep. Jack Franks, D-Marengo, has been a frequent critic of the state's handling of the lottery and said this is just another example.

                            "I sort of like the business model, because if we take the money in and never have to pay, how do we lose?" Franks said sarcastically.

                            "Our government is committing a fraud on the taxpayers, because we're holding ourselves out as selling a good, and we're not — we're not selling anything," Franks said. "The lottery is a contract: I pay my money, and if I win, you're obligated to pay me and you have to pay me timely. It doesn't say if you have money or when you have money."

                            Longtime lottery and gaming consultant Matthew Smith said Illinois lawmakers and lottery officials should have found a way to ensure winners were promptly paid, regardless of whether there was a budget in place, because failing to do so risks destroying consumer trust in the lottery.

                            "Any other brand that would come back and say, 'Well, we promised we would have this product, this service, and you will get it but we just can't tell you when' — any other brand that would do that to you, you would never use again," said Smith, vice chairman of Shapiro+Raj. "Is it going to affect their play? I think in the short term, if the state is able to find a way to get (winners) paid and paid quickly, and kind of puts this aside as a glitch, they can probably save things."

                            But if the delays stretch on indefinitely, Smith said, word will spread — especially if it affects people who play regularly.

                            "If that news just continues to go viral, and it goes back to their neighborhoods and people are talking about it, I think it could have an impact," Smith said. "And even if it affects sales by a percent or two, that's bad for the lottery."

                            Rick said she and Chasteen had to cancel their trip to see her daughter, which they planned to pay for out of Chasteen's lottery winnings. She said delays in payment will only discourage people from playing because it will seem like false hope that they will win.

                            "Who do you think buys lottery tickets most of the time?" Rick said. "Not millionaires. People who don't have a lot of money. You're messing with all those dreams."

                            http://www.dailyegyptian.com/global/article_a4e530f0-5045-11e5-a060-8b5c80b69a04.html

                            Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                            Lep

                            There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

                              Avatar
                              Maryland
                              United States
                              Member #162434
                              January 2, 2015
                              889 Posts
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                              Posted: September 1, 2015, 8:32 pm - IP Logged

                              Here's a little more to the story, this is from the Southern Illinois University newspaper:

                              Rossi would not speculate on what effect the delays might have on the lottery's revenues if people choose to stop playing until the state resolves the budget crisis, and he was not aware of any effort to pass a special measure to allow the comptroller to pay out winnings while lawmakers and the governor haggle over the budget.

                              State Rep. Jack Franks, D-Marengo, has been a frequent critic of the state's handling of the lottery and said this is just another example.

                              "I sort of like the business model, because if we take the money in and never have to pay, how do we lose?" Franks said sarcastically.

                              "Our government is committing a fraud on the taxpayers, because we're holding ourselves out as selling a good, and we're not — we're not selling anything," Franks said. "The lottery is a contract: I pay my money, and if I win, you're obligated to pay me and you have to pay me timely. It doesn't say if you have money or when you have money."

                              Longtime lottery and gaming consultant Matthew Smith said Illinois lawmakers and lottery officials should have found a way to ensure winners were promptly paid, regardless of whether there was a budget in place, because failing to do so risks destroying consumer trust in the lottery.

                              "Any other brand that would come back and say, 'Well, we promised we would have this product, this service, and you will get it but we just can't tell you when' — any other brand that would do that to you, you would never use again," said Smith, vice chairman of Shapiro+Raj. "Is it going to affect their play? I think in the short term, if the state is able to find a way to get (winners) paid and paid quickly, and kind of puts this aside as a glitch, they can probably save things."

                              But if the delays stretch on indefinitely, Smith said, word will spread — especially if it affects people who play regularly.

                              "If that news just continues to go viral, and it goes back to their neighborhoods and people are talking about it, I think it could have an impact," Smith said. "And even if it affects sales by a percent or two, that's bad for the lottery."

                              Rick said she and Chasteen had to cancel their trip to see her daughter, which they planned to pay for out of Chasteen's lottery winnings. She said delays in payment will only discourage people from playing because it will seem like false hope that they will win.

                              "Who do you think buys lottery tickets most of the time?" Rick said. "Not millionaires. People who don't have a lot of money. You're messing with all those dreams."

                              http://www.dailyegyptian.com/global/article_a4e530f0-5045-11e5-a060-8b5c80b69a04.html

                              That is a great story **BUT** the Lottery is not your average company.  You see Illinois has a monopoly on the lottery.  There is no competition.  So, as much as I would like to see the players stop playing in IL until they start getting paid, it most likely will not happen. 

                              Classic example of a monopoly, they do what they want regardsless of the 'contracts' they have issued (in the form of winning tickets).