The ever increasingly inflated jackpot prizes for MM and PB

Reply #12

KY Floyd — Sun, 05 Mar 2023 05:32:00 GMT

How about the most I can collect jackpot if I wisely invest my 30 annuity payments?

I'm sure you've seen the posts that say you can buy your own, better, annuity. I doubt anyone will do it, but you can buy an annuity that pays you over 50 years if you want to. You can buy an annuity that won't pay you a dime until 30 yrs has passed. If you want to, you can easily turn the average lottery jackpot into a total payout of a billion dollars. They're still all based on today's actual cash.... [ More ]

Reply #11

Stack47 — Sat, 04 Mar 2023 05:06:02 GMT

I suppose states could advertise the cash value jackpot, but someone will complain about after tax cash value or the after back child support, back taxes, etc cash value too. How about the most I can collect jackpot if I wisely invest my 30 annuity payments?

When states first started drawing lotto type games with rolling jackpots, most of the payoffs were annuities. For instance a $1 million jackpot was paid by 20 payments of $50,000. Not sure if the PB and MM jackpots always gave a cash opt... [ More ]

Reply #10

KY Floyd — Fri, 03 Mar 2023 06:01:25 GMT

I doubt you have any real evidence showing MUSL decided to advertise the annuitized jackpot to fool gullible players

When virtually everybody takes the cash can you think of any reason for advertising the annuity value other than being able to advertise a larger amount of money? Can you think of any reason to advertise an artificially inflated amount unless they're hoping players will think that's how much they can actually collect right away?

There are also at least a few states that e... [ More ]

Reply #9

garyo1954 — Tue, 28 Feb 2023 19:37:17 GMT

Shocking that an advertised jackpot of 2.04 Billion results in a $997 million payout.

And then the aftershock of federal taxes make it $628.5 million take home.

California has the nation's highest state tax at 13.3%, thankfully, it exempts Powerball winnings from taxation else there would be another $132.7 million disappearing.

https://www.forbes.com/sites/robertwood/2022/11/09/204-billion-powerball-winner-takes-home-628-million-after-taxes/?sh=d5d6b697bbeb

G

Reply #8

Stack47 — Tue, 28 Feb 2023 04:28:12 GMT

Saw news headline saying California $2 billion jackpot winner ONLY gets $997 million after taxes. And the take home would be less another $147 million if California taxed the winnings.

Reply #7

Stack47 — Tue, 28 Feb 2023 04:17:10 GMT

When interest rates were stable, the take home cash value after federal taxes was around 1/3 of the advertised jackpot.

Setting aside the fact the United States is the only country that taxes lottery wins

Never lived in Bulgaria so don't know if they tax gambling winnings or not, but in the U.S. lottery winnings are defined as gambling winnings and is defined as income. Winners get a W-2G for $600 or more if the amount is at least 300 times the wager (the payer has the option to reduce... [ More ]

Reply #6

db101 — Tue, 28 Feb 2023 04:06:45 GMT

Good topic, but the superstitious players are loathe to criticize PB and MM deceptive advertising and other shady practices because they think it'll jinx their chance of winning.

Most ticket sales come from the kinda people that don't notice, don't care, gotta play their lucky numbers come he11 or high water. PB could advertise a $19 billion 100-year annuity with only a $50 million cash value and some people would still hawk it as a $19 billion prize, no matter that they ain't got 100... [ More ]

Reply #5

garyo1954 — Mon, 27 Feb 2023 22:56:13 GMT

The gulf between the cash and annuity options has become larger because inflation has prompted a rise in interest rates, which in turn results in potentially larger investment gains. With annuities, the jackpot cash is essentially invested and then paid out to winners over three decades.

https://www.bigcountryhomepage.com/news/if-you-win-1-2b-powerball-perhaps-consider-not-taking-cash/

Another article worth a read....

https://www.msn.com/en-us/money/markets/why-the-2-04-billion... [ More ]

Reply #4

thaencyder — Mon, 27 Feb 2023 22:49:39 GMT

Indeed but the lotteries are increasing the rate in which they estimate and advertise said deception. It's insane how they think the public won't notice. Maybe they know the average player could t care less.

Reply #3

thaencyder — Mon, 27 Feb 2023 22:48:13 GMT

It is now and that's the point. It used to be a much much higher percentage. Technically the jackpot prize being advertised currently should not be as high as it is since the cash value is low. It's deception on a grand scale towards a race for a larger and larger jackpot numbers that grab headlines.

Reply #2

cottoneyedjoe — Mon, 27 Feb 2023 22:38:20 GMT

Seeing as nobody ever takes the annuity, I agree that advertising jackpots by annuity is misleading. It's the same kind of deception as when a package of junk food makes the number of calories per serving seem small by making the serving size 1/10 of what a normal person would eat, LOL. Technical correctness doesn't always comport with reality.

Reply #1

rcbbuckeye — Mon, 27 Feb 2023 21:36:25 GMT

In MM the cash value is 51.24% of the annuity. Interest rates affect the difference between cash and annuity.

The ever increasingly inflated jackpot prizes for MM and PB

thaencyder — Mon, 27 Feb 2023 21:15:40 GMT

Not sure if many have noticed ( look at current jackpot) there's a huge gap between estimated cash value and jackpot prize. It used to be cash value representing roughly 80-85% of total jackpot prize then states and federal taxes where apply. Now it's almost less than 40%. That is a huge change in how lotteries are estimating jackpot prizes. Setting aside the fact the United States is the only country that taxes lottery wins, it's also the only country in the developed world where it's legal to... [ More ]