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Limited Editon Game : Win $1,000,000 A Year For Life

Topic closed. 12 replies. Last post 10 years ago by KY Floyd.

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United States
Member #1826
July 11, 2003
2645 Posts
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Posted: December 15, 2006, 12:53 am - IP Logged

For any state looking to really set someone up for life.

Price : $2

Pick 6 out of 54

 Prize
Odds
Match 6

$1,000,000/year/life

(win or share)

1: 25,827,165
Match 5
$5,000
1 : 89,677.7
Match 4
$150
1 : 1,526.4
Match 3
$20
1 : 74.7
Match 2
Free Ticket
1 : 8.8


Overall Odds : 1 in 7.87

Top prize winners may opt for a cash-out option of $10,000,000.

If more than one person wins the top prize in a given drawing, then they shall share the top prize.

(insert signature here)

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    California
    United States
    Member #46824
    October 1, 2006
    270 Posts
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    Posted: December 15, 2006, 10:28 am - IP Logged

    CASH Only....how much should the cash option be in order to be worth playing?

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      NY
      United States
      Member #23835
      October 16, 2005
      3474 Posts
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      Posted: December 15, 2006, 11:40 am - IP Logged


      You don't really think any of the states care about setting someone up for life, do you? The lottery is only interested in a product that will sell. Of course I think plenty of people would be more than happy to put down $2 for a chance at a million bucks a year for life, but since the states are interested in what they get out of the lottery rather than what the players get I think the numbers would have to be changed a bit.

      How much principal the state would need to pay the annual prize could have a wide range depending on the life expectancy of the winners. With advances in medicine and the possibility of young winners I think they'd have to plan on the possibility of making payments for 40 years and more, which means making the payment strictly from interest on principal. The expected payout for your numbers requires about 60% of sales, and that's not what the states want. 6 of 55 or 6 of 56, and possibly a minor change in the lower prizes might work well.

      Making annual payments of $1 million from interest at 7% would require just over $14 million in principal. Assuming some of the winners would die within 10 to 20 years they could get by with a little less principal, but off the top of my head they'd need at least $13 million, so that's what the cash payment option should be. After taxes that would net roughly 7.5 to 8 million, which would give you an income of about $550,000, again assuming 7%. That means that taking the cash would be pretty stupid for most people, but I know of at least one person who would go that route.

        Raven62's avatar - binary
        New Jersey
        United States
        Member #17843
        June 28, 2005
        49642 Posts
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        Posted: December 15, 2006, 11:51 am - IP Logged


        You don't really think any of the states care about setting someone up for life, do you? The lottery is only interested in a product that will sell. Of course I think plenty of people would be more than happy to put down $2 for a chance at a million bucks a year for life, but since the states are interested in what they get out of the lottery rather than what the players get I think the numbers would have to be changed a bit.

        How much principal the state would need to pay the annual prize could have a wide range depending on the life expectancy of the winners. With advances in medicine and the possibility of young winners I think they'd have to plan on the possibility of making payments for 40 years and more, which means making the payment strictly from interest on principal. The expected payout for your numbers requires about 60% of sales, and that's not what the states want. 6 of 55 or 6 of 56, and possibly a minor change in the lower prizes might work well.

        Making annual payments of $1 million from interest at 7% would require just over $14 million in principal. Assuming some of the winners would die within 10 to 20 years they could get by with a little less principal, but off the top of my head they'd need at least $13 million, so that's what the cash payment option should be. After taxes that would net roughly 7.5 to 8 million, which would give you an income of about $550,000, again assuming 7%. That means that taking the cash would be pretty stupid for most people, but I know of at least one person who would go that route.

        I Agree! Good Analysis! Thumbs Up

        A mind once stretched by a new idea never returns to its original dimensions!


          United States
          Member #379
          June 5, 2002
          11296 Posts
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          Posted: December 15, 2006, 2:01 pm - IP Logged

          CASH Only....how much should the cash option be in order to be worth playing?

          At least 13 years. Canada's cash options for lifetime games usually are for about 13 years.

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            United States
            Member #1826
            July 11, 2003
            2645 Posts
            Offline
            Posted: December 15, 2006, 5:22 pm - IP Logged


            You don't really think any of the states care about setting someone up for life, do you? The lottery is only interested in a product that will sell. Of course I think plenty of people would be more than happy to put down $2 for a chance at a million bucks a year for life, but since the states are interested in what they get out of the lottery rather than what the players get I think the numbers would have to be changed a bit.

            How much principal the state would need to pay the annual prize could have a wide range depending on the life expectancy of the winners. With advances in medicine and the possibility of young winners I think they'd have to plan on the possibility of making payments for 40 years and more, which means making the payment strictly from interest on principal. The expected payout for your numbers requires about 60% of sales, and that's not what the states want. 6 of 55 or 6 of 56, and possibly a minor change in the lower prizes might work well.

            Making annual payments of $1 million from interest at 7% would require just over $14 million in principal. Assuming some of the winners would die within 10 to 20 years they could get by with a little less principal, but off the top of my head they'd need at least $13 million, so that's what the cash payment option should be. After taxes that would net roughly 7.5 to 8 million, which would give you an income of about $550,000, again assuming 7%. That means that taking the cash would be pretty stupid for most people, but I know of at least one person who would go that route.

            Well, I did calculate it, and it was 53% of sales (including the approximatly $15,000,000 in principal). And just made the cash option $10 mil for liability purposes. It could be $15,000,000 easily if the lottery wanted to take a small risk. 

            And no, I don't think the lottery really cares about setting anyone up for life. I was just using that as a slogan. 

            But it's a fair analysis, so I'm not hurt.

            (insert signature here)

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              Delaware
              United States
              Member #30273
              January 14, 2006
              494 Posts
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              Posted: December 15, 2006, 5:54 pm - IP Logged

              Interesting concept. Reminds me a little of the huge prize that New York is offering on its $20 Win for Life ticket.


                United States
                Member #379
                June 5, 2002
                11296 Posts
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                Posted: December 16, 2006, 12:32 pm - IP Logged

                Interesting concept. Reminds me a little of the huge prize that New York is offering on its $20 Win for Life ticket.

                Don't bother with NY's $20 Lose for Life scratch. Or NY's $10 games for that matter.

                BTW I'm glad that you no longer mention annuities in your signature.

                  emilyg's avatar - cat anm.gif

                  United States
                  Member #14
                  November 9, 2001
                  31342 Posts
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                  Posted: December 16, 2006, 12:35 pm - IP Logged

                  Don't bother with NY's $20 Lose for Life scratch. Or NY's $10 games for that matter.

                  BTW I'm glad that you no longer mention annuities in your signature.

                  cash only - please, please stop.

                  love to nibble those micey feet.

                   

                                               

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                    NY
                    United States
                    Member #23835
                    October 16, 2005
                    3474 Posts
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                    Posted: December 16, 2006, 7:25 pm - IP Logged

                    cash only - please, please stop.

                    If you quote him or do anything else to indicate that you've even looked at his repetitive drivel, never mind actually reading it, you'll only prove that he's been heard, or at least noticed. I don't think ignoring him will make him go away because he obviously has some sort of pathological obsession, but acknowledging anything will just add fuel to a pointless fire that just continues to smolder over the same scorched ground.

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                      NY
                      United States
                      Member #23835
                      October 16, 2005
                      3474 Posts
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                      Posted: December 16, 2006, 7:31 pm - IP Logged

                      Well, I did calculate it, and it was 53% of sales (including the approximatly $15,000,000 in principal). And just made the cash option $10 mil for liability purposes. It could be $15,000,000 easily if the lottery wanted to take a small risk. 

                      And no, I don't think the lottery really cares about setting anyone up for life. I was just using that as a slogan. 

                      But it's a fair analysis, so I'm not hurt.

                      Did you account for the free tickets? For every 25,827,165 tickets should you should expect 2,934,905 to win free tickets. That's just over 11% of sales. adding that to your 53% and cutting back the amount required to pay the jackpot gets you pretty close to the 60% I come up with.

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                        United States
                        Member #1826
                        July 11, 2003
                        2645 Posts
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                        Posted: December 16, 2006, 7:49 pm - IP Logged

                        Did you account for the free tickets? For every 25,827,165 tickets should you should expect 2,934,905 to win free tickets. That's just over 11% of sales. adding that to your 53% and cutting back the amount required to pay the jackpot gets you pretty close to the 60% I come up with.

                        A free ticket is only worth about 11 cents because the only thing free tickets cost is replacing the prize pool money. If it was a flat $1 cash prize, then yes it would be 60%.

                        (insert signature here)

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                          NY
                          United States
                          Member #23835
                          October 16, 2005
                          3474 Posts
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                          Posted: December 16, 2006, 11:19 pm - IP Logged

                          A free ticket is only worth about 11 cents because the only thing free tickets cost is replacing the prize pool money. If it was a flat $1 cash prize, then yes it would be 60%.


                          That 11 cents isn't the cost per free ticket to replace the prize pool, it's the cost for *every* ticke sold. The state has to pay any prizes won by free tickets, so giving away a free ticket costs exactly as much as selling the ticket for $2, except that the state doesn't collect the $2. Each ticket, whether it was free or sold for $2 has an expected payout determined by the odds. For your game the payout is 53 cents onthe dollar for tickets that are sold, plus another 53 cents on the dollar that isn't collected for all the free tickets.

                          Here's a really simple demonstration. The state sells 1000 tickets and collects $1000. Planning to return 53% as winnings, the state simply pays 53 cents to every ticket holder. That's the 53% you think they'd payout in your game. On top of the 53 cent cash payout, though, 11.3% of the tickest would also win a free ticket. That's another 113 tickets that would each win 53 cents, for a total of $59.89. That means the state's total payout for selling 1000 tickets is $530 + $59.89, or $599.89.