|Posted: February 26, 2010, 5:18 pm - IP Logged|
Annuity PB: $95M. Cash: $46.1M
Annuity MM: $99M Cash $60.6M
And the odds, of course, for PB, are much, much, much worse.
The annuity value of either is a case of false advertising but PB is worse than MM.
It's not false advertising. What a lot of people seem to realize is that the jackpot prize itself is an annuity. Meaning the prize itself is payed over some number of payments in some number of years. It's that annuity amount that is advertised.
Look at the advertised Powerball and Mega Millions amounts - annuities. Look at the advertised state lottos - annuities. Annuities are not something new. They've been around for a long time. So when someone plays a jackpot game, it's their responsibility to research the game and know what the prizes are.
The cash option is what the lottery has in cash to pay you in full TODAY, which they make available to you. Again, the cash option is exactly that: an option. Not only is it an option, it is a SECONDARY option. How do I know this? Because the DEFAULT is the annuity. The jackpot winner(s) usually have 60 days to decide whether they want the annuity or cash. If they don't make their decision within that time period, the prize is DEFAULTED to the annuity.
Also, Powerball's cash option isn't "worse" than Mega Millions. It's paid over a longer period of time and the payments gradually increase. In other words Powerball is able to achieve a higher annuity with less cash because of the way it's structured. One must not assume that the cash value will be such and such % of the annuity in every jackpot game. How the game is structured plays a big role with the jackpot amounts available.