Why is the new cash option so low for MM?

Reply #15

ryanm — Sun, 22 Dec 2013 20:35:22 GMT

Right, Jon D, California sales are not counted in the 50% or 300% of sales, and California prize liability is not counted for purposes of the MM total prize liability cap either, since CA's prize liability is always fixed at 50% of sales.

Reply #14

Jon D — Sun, 22 Dec 2013 07:17:20 GMT

Well, there's different reserves.

States have their own reserves in general for each of their lotteries. But I haven't seen anything about a MM jackpot reserve or how it is funded. PB on the other hand has an explicitly stated 2% of sales going to a reserve fund unless it is funded to certain levels. The states are responsible for the 2nd-9th prizes, and the liability cap is just to limit the damage to their profit margin. It's not the same as a reserve specifically for that purpose, although... [ More ]

Reply #13

ryanm — Sun, 22 Dec 2013 06:01:22 GMT

PB is over $70 million on its fourth draw in any given run for the first time ever. Of course, sales for that game have been strong lately (partially thanks in part to the recent MM jackpot run giving publicity to these jackpot games in general), but this also could mean PB's set prize reserves are finally full.

Reply #12

ryanm — Sun, 22 Dec 2013 04:19:36 GMT

I'm pretty sure MM has a reserve fund, but they don't need to steal from their jackpots as much because of how low their jackpots start relative to Powerball's. MM SHOULD have a reserve fund though, because their cash prizes are set prizes. I think their reserve fund is $50 million, because I've read in their rules at one point (unless it's changed recently), that the total prize liability cap is the lesser of 300% of sales or 50% of sales plus $50 million.

Reply #11

mrcraft — Sat, 21 Dec 2013 17:21:49 GMT

Thanks for that detailed info.

Reply #10

Jon D — Sat, 21 Dec 2013 17:14:21 GMT

It's not so much that PB has more guts than MM, it's because they have that explicitly stated 2% of sales going to the reserve fund.

MM contributes 32.58% of sales to the JP, while PB contributes less: 29.98% most of the time, unless the reserve fund is fully funded to certain levels. They need to do this because of the inflated starting JP of PB at $40M which is not nearly supported by sales. Remember that stretch this same time last year when the PB JP kept getting early wins and went $40M... [ More ]

Reply #9

ryanm — Sat, 21 Dec 2013 15:37:07 GMT

Yeah, I think it's from people buying multi-draws, because the Mega Millions lotteries sold over 20 million tickets for last night's draw, according to the TLC website. Also, the jackpot already increased by more than the minimum rollover advertised! I've said it before, and I'll say it again, if Mega Millions really had as much guts as the MUSL (Powerball), they would have increased their opening jackpot to $20 million and still had the $5 million minimum rollovers, which would basically be the... [ More ]

Reply #8

ttech10 — Sat, 21 Dec 2013 09:44:33 GMT

Seeing that the rollover amount jumped up by $2,850,000, I wonder if that's how much it will typically raise or if it's from people buying multi-draws when they went for Tuesday's jackpot.

Since the take home amount is how above what the usual 2nd rollover would be, I might just end up sticking with my 10 draw tickets. Maybe there will be a lower amount winner and we'll be able to see how the rollover amount changes then.

Reply #7

Win$500Quick — Thu, 19 Dec 2013 00:47:20 GMT

I will take any jackpot for $1.

Reply #6

ttech10 — Thu, 19 Dec 2013 00:28:29 GMT

Sorry, I mean the after tax amount. Before, their advertised cash option for a $15,000,000 annuity was $11,000,000 but the take home (at least in my state, without state tax) was $8,250,000.

Thanks to the others for clearing it up, didn't realize they changed the annuity payout schedule/rules. I knew the payout schedule on USA Mega for the MM annuity seemed strange. I just recall them changing around the actual payout (advertised cash versus take home) well before the matrix change and f... [ More ]

Reply #5

Jon D — Thu, 19 Dec 2013 00:07:32 GMT

You need to change your thinking. But many others also feel this way.

The cash value is not low, it's really the annuity value is high. They're playing a mind trick on you.

Not only did they boost the annuity from 26 years to 30 years, they changed from fixed to graduated payments with 5% per year increase, higher than Powerball's 4% per year increase. It's inflated for marketing purposes. And unfortunately, it works.

Again, the cash value is not low, it's the annuity value that is arti... [ More ]

Reply #4

haymaker — Thu, 19 Dec 2013 00:05:57 GMT

Yea, it's the annuity change w/out a doubt, amazing what a few years of compounding can do.

Reply #3

onlymoney — Thu, 19 Dec 2013 00:05:34 GMT

They have to get their cut. The term Too Much is not their forte.

Reply #2

mrcraft — Wed, 18 Dec 2013 23:51:46 GMT

Along with the matrix change, MM changed the annuity from 26 years to 30 years. It's marketing. Many people just see the advertised annuity amount and won't know that the cash value relative to the advertised jackpot was considerably weakened with the change.

I know this will never happen, but it would be nice if lottery jackpots are advertised with their cash values rather than annuity values, then people will be comparing apples with apples across various JP games, old/new, etc. The annuity... [ More ]

Reply #1

Deeyar948 — Wed, 18 Dec 2013 23:51:42 GMT

on mega millions site it says 8 million cash option for 15 million jackpot, when the jackpot was 12 the cash was around 7.2 mill.

Why is the new cash option so low for MM?

ttech10 — Wed, 18 Dec 2013 23:39:15 GMT

October 4 - $12,000,000 annuity - $6,150,000 cash

October 8 - $14,000,000 annuity - $7,200,000 cash

December 20 - $15,000,000 annuity - $6,000,000 cash

I remember when the $12,000,000 rollover used to be $6,750,000 cash option at the minimum. $15,000,000 before the change used to be over $8,000,000 cash option.

I was excited for a minute seeing the raised the minimum but then I saw how misleading they were. Raise the annuity but drastically lower the actual amount.

I wish Tex... [ More ]