The Cash Value of the Hoosier Lottery is exactly 40%. The information posted in the question and answer section which states it is between 40% to 50% is WRONG!
Former Executive Director Esther Q. Schneider changed it to exactly 40% at the same time she extended the annuity to 30 years (without increasing the annuity prize value) and when she eliminated the first rollover increase. (i.e When the Hoosier Lottery Lotto game is reset to it's base prize...if no one wins it on the first draw the amount stays the same for the next draw.)
These changes were all done without making a public announcement and in violation of the IC Codes which state studies must be done in order to determine the effect the changes might have on player attitudes.
Let's do a little math:
$42 million Lotto prize.
At a 40% Cash Value = $16,800,000
Minus 25% Federal tax = $12,600,000
Minus 3.4% Indiana state Income tax = $12,028,800
Minus County Income tax (Which varies from county to county but is at least .05% = $12,020,400
So we see that the much vaunted $42 million jackpot means if you elect to take the cash you'll receive just over $12,000,000. A nice chuck of change indeed but a bit short of $42,000,000. $30 MILLION SHORT TO BE EXACT!
Oh and don't forget when you settle up with the IRS at the end of the year. The tax liability on $42 million will be 35% of everything over (approximately) $325,000. So you'll owe another 10% of the jackpot total or roughly $1,650,000 in additional taxes leaving you with approximately $10,370,400 or .2469% of the total jackpot.
Win $42 million. Net $10.37 million.
Would I take $10.37 million. Absolutely. But this math goes to show that when you consider everything associated with it...$40% cash value and 39% total tax liability it is clear...Hoosier Lottery Lotto payouts are horrible!
Win $42 million and take home $10 million. What a joke! It just goes to show the legnths the lHoosier Lottery will go to in order to deceive players so they can sell tickets for what is in all probability a rigged game. Including posting false information on their website about the Cash Value.
Let me close by asking all of you...who's really the big winner here?
Jim