Future Colorado Lotto winners will receive an extra 10 percent beginning October 31, 2003 when they choose the Cash Value Option. The Cash Value has been set at 40 percent since it was introduced on July 10th, 1994.
"It's always exciting to announce changes that provide our winners with more money," said Lottery Director Mark Zamarripa. "The Cash Value has been the same for almost ten years and it was time for us to bring it in line with the current market situation."
The Cash Value Option is determined by the amount it will cost to purchase a 25-year Annuity that will cover the advertised jackpot amount. Short-term annuities can fluctuate dramatically, but over the long term they are quite predictable, and when the option was introduced in 1994 the market dictated the 40 percent amount. Current market trends, along with more precise jackpot management has allowed for the increase to 50 percent.
"When comparing Lotto payouts from lottery to lottery, most are in the 50 percent payout range," said Zamarripa. "The Colorado Lottery continuously tracks industry trends to see if there are best practices we can apply to our games. We are always looking to provide our players with the best products available, and this will only help to improve Lotto."
Players will still be able to choose the 25-year progressive Annuity Option or the new 50-percent Cash Value Option. This decision is made when winners claim their prize at the Lottery office. Lottery officials suggest players receive financial advice prior to claiming a Lotto or Powerball jackpot.