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Can MM & PB Start Being Honest? Must this farce continue?

Topic closed. 53 replies. Last post 3 years ago by OldSchoolPa.

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Teddi's avatar - Lottery-008.jpg

United States
Member #142499
May 13, 2013
1182 Posts
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Posted: June 18, 2013, 11:24 am - IP Logged

Go to the Powerball website and in big bold letters they claim a $105 Million. In much smaller letters is the cash payout, valued at less than 61% of that large-fonted $105M. 

They'll give you that full amount in drips and drabs over so long a period, you're using a walker and gumming baby food by the time you get it all, or you settle for 60 cents on the dollar to get it now.

Yet even with the lump sum ripoff option, they force the winners to parade with that cardboard check for the amount they are NOT going to be paying them. 

Can't we be like the other countries? What you see is what you get with no ambiguity? No fancy accounting?

Why can't it be possible for $105 Million to actually mean that? Can we stop with the farce?

Bang Head

I might wake up early and go running.  I might also wake up and win the lottery.

The odds are about the same.

    HoLeeKau's avatar - YheaShea
    Idaho
    United States
    Member #94283
    July 17, 2010
    2284 Posts
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    Posted: June 18, 2013, 11:30 am - IP Logged

    Hot Lotto just switched to an all-cash jackpot where the amount they advertise is the amount you win.

    Honestly, it doesn't bother me at all to have the annuity amount advertised.  Within a few days of starting to play the lottery I had it figured out that because of my choice to take the cash option I would receive the amount they would have to invest to pay out the annuity. 

    If they advertised the cash amount, you know someone will start whining that they didn't know the annuity was higher and it somehow affected them or their play.  Can't please everyone.  Unless they discontinue the annuity and award only cash, I don't see a reason to do it any other way.

      Teddi's avatar - Lottery-008.jpg

      United States
      Member #142499
      May 13, 2013
      1182 Posts
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      Posted: June 18, 2013, 11:45 am - IP Logged

      Hot Lotto just switched to an all-cash jackpot where the amount they advertise is the amount you win.

      Honestly, it doesn't bother me at all to have the annuity amount advertised.  Within a few days of starting to play the lottery I had it figured out that because of my choice to take the cash option I would receive the amount they would have to invest to pay out the annuity. 

      If they advertised the cash amount, you know someone will start whining that they didn't know the annuity was higher and it somehow affected them or their play.  Can't please everyone.  Unless they discontinue the annuity and award only cash, I don't see a reason to do it any other way.

      My point is either discontinue the annuity payments, or make the annuity payment equal to the cash payout. Make neither a higher option than the other. 

      But if they are going to keep JP amounts different, at the very least quit posing the people who choose the lump sum payment with the total JP amount. At best it's disingenuous, and worst it's a grand lie. Either way, it isn't honest since that check doesn't represent the amount they are  planning on giving that person. 

      Other countries have one payout amount. There's no pretense. Why do we keep doing this nonsense with PB and MM?

      I might wake up early and go running.  I might also wake up and win the lottery.

      The odds are about the same.

        rcbbuckeye's avatar - Lottery-043.jpg
        Texas
        United States
        Member #55889
        October 23, 2007
        5593 Posts
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        Posted: June 18, 2013, 11:52 am - IP Logged

        This has been explained so many times I'm amazed this still comes up.

        The cash value is the amount that the lottery would INVEST over a period of time to achieve the ANNUITY amount.

        You want the money now? Take the cash option.

        You want an income stream over x number of years? Take the annuity.

        Yes they promote the annuity amount. It's the larger amount. Ok. No big deal.

        If you go to PB's website and read it, they explain it in precise detail.

        CAN'T WIN IF YOU'RE NOT IN

        A DOLLAR AND A DREAM (OR $2)

          Teddi's avatar - Lottery-008.jpg

          United States
          Member #142499
          May 13, 2013
          1182 Posts
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          Posted: June 18, 2013, 12:10 pm - IP Logged

          This has been explained so many times I'm amazed this still comes up.

          The cash value is the amount that the lottery would INVEST over a period of time to achieve the ANNUITY amount.

          You want the money now? Take the cash option.

          You want an income stream over x number of years? Take the annuity.

          Yes they promote the annuity amount. It's the larger amount. Ok. No big deal.

          If you go to PB's website and read it, they explain it in precise detail.

          Yes, I think anyone with an internet connection can see how they do it. But my question is WHY do they do it?

          The economics, finance and accounting lesson not withstanding, it doesn't answer the why.

          Canada doesn't do it, neither does the UK. If there's a lottery amount, that's the only amount the winner gets. There's no: who will buy what at what percentage to give a lottery winner at X time X amount.

          If you win a house (except for taxes) that's the house you get. There isn't a smaller house if you want it immediately. There isn't someone giving you a piece of the house at a time, over the course of 30 years. Why should cash be handled any different? From what I can tell, the only reason it's treated differently is because it can be manipulated where as a house cannot 

           

          If you have an issue or annoyance with my question, ignore it.

          I asked it because I honestly want to know the answer. I'll wait for someone else to explain to me why our lottery system is handled so differently from other 1st world western countries for no apparent real reason.

            ameriken's avatar - 33ojew2
            Denver, Co
            United States
            Member #103046
            December 29, 2010
            546 Posts
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            Posted: June 18, 2013, 12:17 pm - IP Logged

            Yes, I think anyone with an internet connection can see how they do it. But my question is WHY do they do it?

            The economics, finance and accounting lesson not withstanding, it doesn't answer the why.

            Canada doesn't do it, neither does the UK. If there's a lottery amount, that's the only amount the winner gets. There's no: who will buy what at what percentage to give a lottery winner at X time X amount.

            If you win a house (except for taxes) that's the house you get. There isn't a smaller house if you want it immediately. There isn't someone giving you a piece of the house at a time, over the course of 30 years. Why should cash be handled any different? From what I can tell, the only reason it's treated differently is because it can be manipulated where as a house cannot 

             

            If you have an issue or annoyance with my question, ignore it.

            I asked it because I honestly want to know the answer. I'll wait for someone else to explain to me why our lottery system is handled so differently from other 1st world western countries for no apparent real reason.

            "The economics, finance and accounting lesson not withstanding, it doesn't answer the why"

             

            Because the higher annuity amount sells more tickets. And judging by how people go nuts over an inflated annuity amount, it works.

            Give someone a fish and feed them for a day. Teach them to use the internet and they won't bother you for weeks. 

              RJOh's avatar - chipmunk
              mid-Ohio
              United States
              Member #9
              March 24, 2001
              19825 Posts
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              Posted: June 18, 2013, 12:27 pm - IP Logged

              The higher annuity amount doesn't ever effect my decision to play since I always know the cash value too.

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


                United States
                Member #116268
                September 7, 2011
                20244 Posts
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                Posted: June 18, 2013, 12:33 pm - IP Logged

                Not only does it increase sales, but I would think the states make some profits off the annuity.

                  Jon D's avatar - calotterylogo
                  Los Angeles, California
                  United States
                  Member #103813
                  January 5, 2011
                  1530 Posts
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                  Posted: June 18, 2013, 12:46 pm - IP Logged

                  "The economics, finance and accounting lesson not withstanding, it doesn't answer the why"

                   

                  Because the higher annuity amount sells more tickets. And judging by how people go nuts over an inflated annuity amount, it works.

                  I Agree!The reason is Sales and Marketing. They do it because it works. People fall for it.

                  Obscuring the true value of things for Sales and Marketing purposes is the American way. Like they sell you a $800 smartphone for $300, but what they are really doing is making you take out a loan on the phone and if you end your 2 year contact early, they come after you for the deficiency.(they refer to as the ETF)

                  The jast big jackpot was advertised as over half a billion dollars, $590M. But it was only about 1/3 of a billion, $371M cash value. The annuity is really a way of letting the government do your investing for you. We know that, they know that. But the effect of the higher annuitized jackpot in terms of Sales and Marketing works in feeding the buying frenzy, which is how they make their money.(more revenue)


                    United States
                    Member #130815
                    July 25, 2012
                    1636 Posts
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                    Posted: June 18, 2013, 1:19 pm - IP Logged

                    Yes, I think anyone with an internet connection can see how they do it. But my question is WHY do they do it?

                    The economics, finance and accounting lesson not withstanding, it doesn't answer the why.

                    Canada doesn't do it, neither does the UK. If there's a lottery amount, that's the only amount the winner gets. There's no: who will buy what at what percentage to give a lottery winner at X time X amount.

                    If you win a house (except for taxes) that's the house you get. There isn't a smaller house if you want it immediately. There isn't someone giving you a piece of the house at a time, over the course of 30 years. Why should cash be handled any different? From what I can tell, the only reason it's treated differently is because it can be manipulated where as a house cannot 

                     

                    If you have an issue or annoyance with my question, ignore it.

                    I asked it because I honestly want to know the answer. I'll wait for someone else to explain to me why our lottery system is handled so differently from other 1st world western countries for no apparent real reason.


                    EEEHhhh they do it to attract the people who dont normally buy tickets on a regular basis...they show that hyperinflated amount and people just loose their minds....I mean alot of people buy tickets when it is 300 million but I dont know anybody that wouldnt throw at least 1 or 2 bucks at it when it is at 600 million....and they dont think about the cash value they just see that 600 million and the media hypes it up as well talking about how many ferrarris you could buy etc etc

                      Avatar
                      Sunny California
                      United States
                      Member #40295
                      May 31, 2006
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                      Posted: June 18, 2013, 1:36 pm - IP Logged

                      Very simple. Huge amounts draw huge ticket sales. Nobody wants to see a PB winner holding a $1,000,000 check. Where's the excitement in that? People want to see lots of 00000000's :) Our country is run on media hype,period. Ads,ads,ads,commericials,commercials,commercials pounding at us all day long. 1,000,000 might not catch your ear but 500 million will.

                        Avatar
                        Kentucky
                        United States
                        Member #32652
                        February 14, 2006
                        7308 Posts
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                        Posted: June 18, 2013, 2:13 pm - IP Logged

                        When the huge jackpot (huge compared to their other prizes) lotto games began there was no cash option; if the jackpot was $2 million, it was payed in 20 installments of $100,000. It wasn't until they started offering $10 million jackpots when players began asking for a cash option. In some states the decision of cash or payments had to be made when the ticket was purchased.

                        As of today, nothing has really changed because the jackpot is still advertised at the installment prize. The length of the installments has changed that gives an even larger jackpot, but the winner can still get full advertised jackpot. Since the cash or payment option only applies to the winners, they are now given 60 or more days after validated the ticket to make that decision.

                        Many lottery sites not only show the current cash value of a jackpot, but also show the approximate after tax value. We'll hear the players with losing tickets say they wouldn't play had they known the details, but we'll never hear a jackpot winner say it.

                          whiteballz's avatar - Lottery-015.jpg
                          Nutley, New Jersey
                          United States
                          Member #131058
                          August 1, 2012
                          875 Posts
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                          Posted: June 18, 2013, 4:23 pm - IP Logged

                          what makes things even worse for US lottery players is not only do the other countries advertise the cash value of their jackpot,

                          almost all the other countries do NOT tax lottery winnings.

                          So if you're a US lottery player who wants the cash value, you need to take the advertise jackpot, subtract about 40% to get to the cash amount, then take away about 50% of the cash amount for state income tax and federal income tax to finally arrive at what the government will allow you to keep.

                          Remember the fact that as a lottery player you're taking all the risk by wagering your money against astronomical odds, the government takes no risk and wagers nothing but in a sense, they are your partner because when or if you win, they take half. What a sweetheart deal the government gets. Imagine if you can partner up with someone, your partner takes all of the risk because they will wager their own money you will wager nothing, so if they lose they lose their money and the best part, if they some how manage to beat the laughable odds against them, you will keep half! Please sign me up for a deal like that.

                          I'd love to be a UK lottery player. If you win, you get to keep the advertised amount, you'll pay zero income tax on the lottery winnings and you will be given the option to collect the prize anonymously.

                          .

                            haymaker's avatar - Lottery-012.jpg
                            Egg Harbor twp.south Jersey shore
                            United States
                            Member #112968
                            June 29, 2011
                            3854 Posts
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                            Posted: June 18, 2013, 4:31 pm - IP Logged

                            Yea, that's the problem, gov't wants to be a partner in everything.

                            Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

                              whiteballz's avatar - Lottery-015.jpg
                              Nutley, New Jersey
                              United States
                              Member #131058
                              August 1, 2012
                              875 Posts
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                              Posted: June 18, 2013, 4:39 pm - IP Logged

                              Yea, that's the problem, gov't wants to be a partner in everything.

                              I Agree!

                              .