Why an Annuity?

Reply #19

ryanm — Sat, 06 May 2006 05:34:56 GMT

Yes, $0.99 pricing as opposed to $1.00 pricing is a form of internal control as well as a psychological device.

Reply #18

savagegoose — Sat, 06 May 2006 04:46:17 GMT

i always thought cash pots where the original prize, and that kidnaps and such caused lottery comissions to change th payout to annuities!

on the topic of $2.99c prices, i thought that ws to force the clerk to get change out the till and not jus pocket the $3 paid by a customer?

o well differnt views on things i spose.

Reply #17

CASH Only — Thu, 04 May 2006 17:10:12 GMT

Companies that sell annuities had an opportunity to make money off of the players' winnings. Unfortunately, this scenario still exists since some games STILL are annuity-only.

Reply #16

ryanm — Wed, 03 May 2006 23:32:19 GMT

The whole point of annuities was to increase the jackpot amount so it pays out more than the lotteries can rack up in actual present day cash.

Reply #15

Tim Quan — Wed, 03 May 2006 20:08:01 GMT

My question (challenge) is why make the Jackpot an annuity prize in the first place? I'm not saying that because the cash value option was added that now they should advertise more clearly what they mean by jackpot. Just the opposite.

If jackpot means an annuity value, and that has become the convention, then by all means, I think it's perfectly justifiable to keep referring to the annuity as the jackpot without having to clarify it or change it to the cash value. That's been... [ More ]

Reply #14

RJOh — Wed, 03 May 2006 18:03:58 GMT

State lotteries jackpots started out as annuities. Cash options were offered later after some winners (especially the older ones) were selling their prizes for an amount of cash much less than their real value which was an issue. Now that winners have a choice of taking the cash value of their prize from the get go, it's no longer an issue. You seem to be arguing that now because the cash option is offered to the winners the jackpot should be advertised differently, would it be more honest to... [ More ]

Reply #13

Tim Quan — Wed, 03 May 2006 17:07:58 GMT

My mistake. I skewed what you originally said (probably seeing what I wanted to see).

I thought you were stating that at some earlier point, state-run lotteries were required, by law, to issue jackpots as annuities. But what you're saying (and correct me if I'm wrong) is that state-run lotteries governed themselves and required that prizes be paid through annuities.

This wasn't law, right? This was more a matter of convention selected by the lotteries preferencing annuitie... [ More ]

Reply #12

ryanm — Wed, 03 May 2006 03:12:50 GMT

lol

Reply #11

DoctorEw220 — Tue, 02 May 2006 22:19:23 GMT

Alright,

You may be new here, but here's a tip to make sure you don't get a bunch of useless posts on a thread:

Don't get CASH Only started.

Reply #10

CASH Only — Tue, 02 May 2006 22:15:39 GMT

Actually, all the state lottery regulations required prizes to be paid through annuities. There was no federal law dictating annuities.

Reply #9

Tim Quan — Tue, 02 May 2006 22:05:53 GMT

Thanks for the replies. I agree with the enticement answer. That was my going-in guess. I was just looking to see if there wasn't some other historical reason or explanation for why annuity jackpots are the default, promoted jackpot amounts. It seemed obvious to me that lottery promoters like the psychological enticement of the bigger number, similar to the way knocking off a penny from the price of something to make it in the next dollar value down is an illusion of savings. I was just hop... [ More ]

Reply #8

Dream — Tue, 02 May 2006 06:14:53 GMT

Quote: Originally posted by SirMetro on May 1, 2006 I preface this comment with this is merely my concept of the reason and I could be wrong .

First, I think the biggest reason the States offer an Annuity is to allow the State an oppurtunity to retain as much cash reserve as possible. One of the primary laws in Lottery and Gambling is that the entity offering the Game must have a reserve equal to an amount preset by the initial Constitution of that Game to insure that in the case of a large

Reply #7

dvdiva — Tue, 02 May 2006 04:55:43 GMT

I far prefer annuity nonsense staying only in the US. If tickets weren't tax-free and all cash it would loose most of the appeal for me to play them. I'm sure players from the US represent a very small percentage of buyers but all cash make conversions very easy to make and represent truth in advertising for what is being won.

Reply #6

JimmySand9 — Tue, 02 May 2006 00:25:20 GMT

The reason is simple. Big jackpots sell more tickets, and annuities allow lotteries to inflate jackpots higher than they really are. That means more tickets are sold for the same amount in the kitty.

Reply #5

CASH Only — Mon, 01 May 2006 23:27:04 GMT

Thank you, Sir Metro. Always choose LUMP SUM, and never play games like GA's Lose for Life.

Reply #4

SirMetro — Mon, 01 May 2006 23:24:30 GMT

I preface this comment with this is merely my concept of the reason and I could be wrong .

First, I think the biggest reason the States offer an Annuity is to allow the State an oppurtunity to retain as much cash reserve as possible. One of the primary laws in Lottery and Gambling is that the entity offering the Game must have a reserve equal to an amount preset by the initial Constitution of that Game to insure that in the case of a large payout, there are adequate funds to cover the payout... [ More ]

Reply #3

CASH Only — Mon, 01 May 2006 23:18:31 GMT

I would have NO problem if Canada went to annuity jackpots. Provided of course that ALL their games would continue to have a cash option, as IMO they would.

Reply #2

pacattack05 — Mon, 01 May 2006 23:14:58 GMT

The officials assume everyone is well aware of the reality, but some lawyer found a loop hole.

Just like the prices of different things we see all around us. Why do you always see $2.99, instead of $3.00? The answer is because they know how the human brain works. $2.99 looks alot better than $3.00

Just like they know that you know in reality it's 3 bucks, works just the same with before taxes with Jackpot amounts. It's all about enticement. Believe me, they found a loop hole. There are en... [ More ]

Reply #1

CASH Only — Mon, 01 May 2006 23:10:04 GMT

US lotteries at one time (before the 1990s) had rules where all online jackpot winners had to receive their prize through annuity payments. Even today, MA Megabucks, various scratch games and most lifetime prizes are still paid only as periodic payments. Elsewhere, US lotteries have been symphathetic to the majority of lottery players who would prefer getting paid in lump sum should they win.

Why an Annuity?

Tim Quan — Mon, 01 May 2006 23:02:19 GMT

Does anyone know why lotteries that offer the annuity option advertise that as the jackpot , with the cash value appearing secondary, rather than vice versa?

The reason seems fairly obvious to me, but I can't find a formal statement on it anywhere from any of the lotteries or lottery analysts/advisors/spokespersons.

Here's the deal. I'm in a debate over whether or not the practice of promoting the annuity value amount is a deceptive practice. I argue that it isn't. But what... [ More ]