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Powerball cash option

Topic closed. 14 replies. Last post 10 years ago by KY Floyd.

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rundown99's avatar - cigar

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Posted: June 25, 2006, 1:36 pm - IP Logged

Have you noticed that the cash option on the advertised jackpot for Powerball has decreased.  Right now the cash option for the $28 Million Powerball jackpot is only $12.6 Million !!!  The cash option used to be at least 50% of what they advertised.  What is going on?  Somebody please explain this to me!!!

Smart lottery winners form trust to claim their winnings.  They send an attorney to the lottery headquarters to claim the prize in trust, so that ONLY the name of the trust is revealed.  And they tell NO ONE, especially relatives.

If you ever win a lottery and you are single, the only person you should ever marry is someone who was truly in love with you BEFORE you won the jackpot!

    Coin Toss's avatar - shape barbed.jpg
    Zeta Reticuli Star System
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    Posted: June 25, 2006, 2:21 pm - IP Logged

    There was a thread here not too long ago about the PB cash option going to somewhere around 46%, guess it was pretty accurate -

    12.6 / 28 = 45% exactly.  

    This is the kind of thing I was trying to get at with a thread I started about do the lottery commissions consider the players customers or chumps:

    http://www.lotterypost.com/thread/134519

     If they were given free reign to "get it on",  no telling how much they'd lower the cash option to.  

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      Morrison, IL
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      Posted: June 25, 2006, 2:33 pm - IP Logged

      The cash option has been like this ever since PB went to 5/55 + 1/42, because they restructured the annuity so payments increase each year. Therefore, they can get a higher annuity than they could under the equal payments method from the same cash amount. The cash value has not decreased; the annuity has simply increased. However, it is also true that less than 30.28855% of sales is going to the cash jackpot, because the states can deduct up to 2% of sales for the cash reserve to pay the set cash prizes and guaranteed jackpots, and Powerball has had two occasions last year when the actual prize payout was at least six times the actual allocated amount from sales due to an unbelievable number of second place winners, and I guess the states would be damned if they have to take money from their own program funds, so ultimately the nonguaranteed jackpot winners end up paying, and probably still are to cover those extraoridinary prize payouts. Mega Millions probably has a similar policy on cash reserves for fixed prizes, but it just isn't showing because that game hasn't really had any extraordinary second place prize payouts.

        RJOh's avatar - chipmunk
        mid-Ohio
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        Posted: June 25, 2006, 3:28 pm - IP Logged

        I expect MegaMillions luck to change as soon as the participants in the MegaMillions challenge get their act together and start hitting some 5+0's.Wink

         * you don't need to buy more tickets, just buy a winning ticket * 
           
                     Evil Looking       

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          Morrison, IL
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          Posted: June 25, 2006, 6:35 pm - IP Logged

          lol That could be coming soon since Mega Millions' jackpot keeps getting hit lately.

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            New Mexico
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            Posted: June 26, 2006, 10:10 am - IP Logged

            There was a thread here not too long ago about the PB cash option going to somewhere around 46%, guess it was pretty accurate -

            12.6 / 28 = 45% exactly.  

            This is the kind of thing I was trying to get at with a thread I started about do the lottery commissions consider the players customers or chumps:

            http://www.lotterypost.com/thread/134519

             If they were given free reign to "get it on",  no telling how much they'd lower the cash option to.  

            What appears to be happening is a move on the part of MM (and probably PB) to keep the exact dollar amount in the prize roughly the same as the money provided by ticket sales amounts for that draw.

            By using the shell game illusion of longer annuities they're able to disguise it, but a person could conclude the object is to assure every roll stands alone, is profit, and every jackpot payout is entirely covered by the ticket sales for that draw.

            I don't know where a person would find the ticket sales information for each draw so's to confirm this, but someone provided on another thread with information from the Texas site.  Texas was poor-mouthing how the lotteries weren't making any money and put up some 'info' to support the tears.

            Instead, close examination supported the idea they're trying to make every draw (except the winning one) a total profit.

            Then they can begin trying to figure out how to shave it down so's the draws with winners don't ruin things by causing them to have to pay something out.

            From their perspective the appeal of larger jackpots is higher ticket sales and a lot of rolls with those sales.  The downside is that occasionally someone becomes a spoil-sport and tries to get into their pocketbooks by winning. 

            They're just trying to protect their investments, same as any businessman would do.  Nobody's going to dance in the streets over there when there's a winner until someone can figure out how to keep him satisfied with that big phony check that won't spend. 

            Instead of an annuity one of these days you'll see them offering to pay out in tickets for the next draw.

            Jack

            Absorb the good, ignore the bad, weigh the ugly.

            It's about number behavior.

            Egos don't count.

             

            Dedicated to the memory of Big Loooser

             

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              Posted: June 26, 2006, 10:28 am - IP Logged

              ATTENTION:

              PB and MM employees:

              The idea at the end of the above post was intended to be humorous.

              Surely you don't believe a person who just won, say, $100 Million (annuit), $45 Million (actual before taxes), $22 Million (after taxes) would accept 100 million tickets for the next (now deflated draw)?

              Here's why he might:

              If he can get the amount you said he won down far enough there's a chance you'll have to actually pay him something.

              Jack

              Absorb the good, ignore the bad, weigh the ugly.

              It's about number behavior.

              Egos don't count.

               

              Dedicated to the memory of Big Loooser

               

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                NY
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                Posted: June 27, 2006, 11:48 am - IP Logged

                Have you noticed that the cash option on the advertised jackpot for Powerball has decreased.  Right now the cash option for the $28 Million Powerball jackpot is only $12.6 Million !!!  The cash option used to be at least 50% of what they advertised.  What is going on?  Somebody please explain this to me!!!

                There is no cash option. The cash from ticket sales is, and always has been, what determines the jackpot. The optional annuity is based on investing the cash, and since interest rates have been going up a given amount of cash will generate bigger annuity payments for any given schedule.

                  spy153's avatar - maren

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                  Posted: June 27, 2006, 11:59 am - IP Logged

                  Now I understand why people dont even bother playing until the advertised pot gets huge. It just doesn't seem worth all the hard work for money that is not even going to last.

                  voir-vous dans mes reves!Cool

                    bellyache's avatar - 64x64a9wg

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                    Posted: June 27, 2006, 1:03 pm - IP Logged

                    People can't last on 12.6 million?!? LOL I promise you that I could retire nicely on that amount.

                    Dance like no one is watching.

                      weshar75's avatar - Lottery-042.jpg
                      Mcminnville, Oregon
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                      Posted: June 27, 2006, 6:40 pm - IP Logged

                      I sure would like the chance to choose between cash option and annuity.  $12.6 million or $28 million over 30 years.  We could all use to have a decision like this once in our lives.-weshar75

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                        New Mexico
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                        Posted: June 27, 2006, 8:02 pm - IP Logged

                        Have you noticed that the cash option on the advertised jackpot for Powerball has decreased.  Right now the cash option for the $28 Million Powerball jackpot is only $12.6 Million !!!  The cash option used to be at least 50% of what they advertised.  What is going on?  Somebody please explain this to me!!!

                        There is no cash option. The cash from ticket sales is, and always has been, what determines the jackpot. The optional annuity is based on investing the cash, and since interest rates have been going up a given amount of cash will generate bigger annuity payments for any given schedule.

                        The cash from ticket sales is, and always has been, what determines the jackpot.

                         So where can a person get a look at the history of ticket sales for the draws over the past year or so?

                        You sound as though you know what you're talking about, but if you do, you must have some way of knowing it other than reading it in a newspaper.

                        Where's the information available that would allow a person to compare ticket sales for each draw to the size of the jackpots?

                        J

                        Absorb the good, ignore the bad, weigh the ugly.

                        It's about number behavior.

                        Egos don't count.

                         

                        Dedicated to the memory of Big Loooser

                         

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                          Morrison, IL
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                          Posted: June 27, 2006, 8:35 pm - IP Logged

                          Now I understand why people dont even bother playing until the advertised pot gets huge. It just doesn't seem worth all the hard work for money that is not even going to last.

                          Not being able to last on $12.6 million? How sad. Most people won't see that much money in their lifetimes.

                            guesser's avatar - Lottery-017.jpg

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                            Posted: June 28, 2006, 4:18 pm - IP Logged

                            Now I understand why people dont even bother playing until the advertised pot gets huge. It just doesn't seem worth all the hard work for money that is not even going to last.

                            'hard work' ??????????

                             

                            I spend maybe 30 minutes twice a week doing this 'hard work', whereas I could be playing Solitaire or some other game.

                             

                            I find it amusing that people won't play it until the pot gets BIG, that's like saying 'oh, you just tossed 15 mill in my lap, thanks but no thanks, it's not enough to make it worth my while, get back to me when you want to toss 150 mill in my lap, THEN I will take it'. 

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                              NY
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                              Posted: June 28, 2006, 5:19 pm - IP Logged

                              Have you noticed that the cash option on the advertised jackpot for Powerball has decreased.  Right now the cash option for the $28 Million Powerball jackpot is only $12.6 Million !!!  The cash option used to be at least 50% of what they advertised.  What is going on?  Somebody please explain this to me!!!

                              There is no cash option. The cash from ticket sales is, and always has been, what determines the jackpot. The optional annuity is based on investing the cash, and since interest rates have been going up a given amount of cash will generate bigger annuity payments for any given schedule.

                              The cash from ticket sales is, and always has been, what determines the jackpot.

                               So where can a person get a look at the history of ticket sales for the draws over the past year or so?

                              You sound as though you know what you're talking about, but if you do, you must have some way of knowing it other than reading it in a newspaper.

                              Where's the information available that would allow a person to compare ticket sales for each draw to the size of the jackpots?

                              J

                              I have no idea if any of the old information is easily available online. If you've got abit of patience you could find some of the info by looking in the usamega archives for news stories that report bot the cash and anuity value. The people who run the lottery certainly keep track of it, but I don't know how readily they'll hand it over. I suppose you could file a Freedom of Information request if you really wanted accurate data, but why would you need it? The current information is readily available at a number of websites, and if you watch for a while you'll see any obvious trends.

                              About 30 cents of each ticket goes to the jackpot, so that gives you a close approximation of how many tickets were sold, but other than figuring the probability of a winner I don't have any interest in how many tickets are sold. How much cash is available is the only thing that really matters. Unless they change the way ticket proceeds are divided among the different prize levels, having 20 million in cash means they sold twice as many tickets as when they had 10 million in cash, but unless interest rates (and what investment firms think will happen to them) don't change at all the annuity value will be a bit more or less than twice as much. I don't recall what the ratio of cash to annuity was before the  payment schedule changed, but in the last year the cash available has dropped from about 53 to 55% of the annuity value to the 45% figure for the current jackpot. For MM it was about 63% and has now dropped to about 56%. The difference is based on MM paying out the principal faster, so there's less interest earned to pay an annuity.