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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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rcbbuckeye's avatar - Lottery-043.jpg
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Posted: June 19, 2013, 8:33 am - IP Logged

Do you get equally upset when car dealers advertise for only $200 a month you can own a new car?  You really  know you will eventually have to pay $25K+ plus interest if you ever do own that car even when it's old and a piece of junk.

We have a car dealer in the Metroplex that advertises $88 down and $88 a month on any car. Really???

And you can bet (literally) there are people who fall for that.

Just like people who just can't understand how the lottery works.

CAN'T WIN IF YOU'RE NOT IN

A DOLLAR AND A DREAM (OR $2)

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    Kentucky
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    Posted: June 19, 2013, 1:22 pm - IP Logged

    That is where we differ because I consider risk as putting my money into something where the outcome is not certain regardless of amount. To me it is calculated risk to buy a one dollar Mega Millions ticket. I weigh the risk, which is, the ticket I bought matches none of the numbers drawn meaning I lose the dollar I spent to my perceived benefit, the idea I may win a large sum of money and then decide if that it is an acceptable risk for me to take.

    Another reason I call it risk is to drive home my point that the US government takes no risk in that you and you alone are using your own money to buy lottery tickets but if you win, the US government decides to take half your winnings, which in my opinion is wrong. It seems all the other countries in the world, including Canada, the UK, Spain, France and Italy would agree with me because they do not tax lottery winnings at all.

    It depends on how we define risk and how we perceive buying a $1 lottery ticket. I look at it as probably wasting a dollar because I know I have a very tiny chance of winning the jackpot. A risk to me is if I had a dollar coin, was going to buy a lottery ticket with it, but dropped it into a pool of hungry man-eating sharks. Should I risk my life for a very tiny chance to win the jackpot?

    "It seems all the other countries in the world, including Canada, the UK, Spain, France and Italy would agree with me because they do not tax lottery winnings at all."

    That's true, but in last nights MM drawing, only 0.0055% of all the winning tickets will be taxed. I do agree with your point because our state governments are running gambling games were very few players can benefit and those who do benefit still pay a large portion of their winnings in taxes. It's a win-win situation for government and we have very little control on how they spend waste our money.

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      Kentucky
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      Posted: June 19, 2013, 2:23 pm - IP Logged

      You guys are all probably right. I guess I'd just prefer their honesty. I'd be ecstatic to win $60M, and know that it's $60M (not counting taxes of course). Don't tell me it's $105 when it's not.  Don't give me a check for $105M to hold up when they have no intention of giving that amount. 

      Definitely $500M caught our attention, but wouldn't it have caught our attention just as much as billboards and websites touting a guaranteed payout of $370M?

      Is it just me or does knowing someone might give me hundreds of millions of dollars still ridiculously exciting. There's no need to pretend that it's more than that.

      Tell me that's what you're going to give me, no fancy finance tricks, give me THAT check to hold up, it would still make big news. 

      Surely we as a nation haven't gotten so greedy that $370M isn't enough.

      US Flag

      "Don't give me a check for $105M to hold up when they have no intention of giving that amount."

      Speaking of farces, this is a real one. The lottery commission will pay you $105 million and told you before you bought the ticket it will be paid off in yearly installments. They will give you the choice of getting a check for the cash value too. They would probably make the amount on fake check in the amount of the cash value if that was your choice.

      "Is it just me or does knowing someone might give me hundreds of millions of dollars still ridiculously exciting. There's no need to pretend that it's more than that."

      Which part of the lottery commission will pay you their advertised jackpot amount and there are players who will elect to take the payments and collect the full advertised prize don't you understand?

      I'm no advertising expert, but it sure makes more sense to me to advertise the top possible prize than to advertise about 3% of the tickets will be winners and of those, only 0.004% will win more than $100.

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        Posted: June 19, 2013, 4:01 pm - IP Logged

        "Don't give me a check for $105M to hold up when they have no intention of giving that amount."

        Speaking of farces, this is a real one. The lottery commission will pay you $105 million and told you before you bought the ticket it will be paid off in yearly installments. They will give you the choice of getting a check for the cash value too. They would probably make the amount on fake check in the amount of the cash value if that was your choice.

        "Is it just me or does knowing someone might give me hundreds of millions of dollars still ridiculously exciting. There's no need to pretend that it's more than that."

        Which part of the lottery commission will pay you their advertised jackpot amount and there are players who will elect to take the payments and collect the full advertised prize don't you understand?

        I'm no advertising expert, but it sure makes more sense to me to advertise the top possible prize than to advertise about 3% of the tickets will be winners and of those, only 0.004% will win more than $100.

        I can see both sides of this argument.

         

        I completely agree with you, stack47, in that it "makes sense" for them to advertise the aunnitized jackpot, and give you a check for the annuitiized amount even though that's not what you're gonna get.

         

        It also makes sense for a guy who accidentally hit and badly injured an old lady at night to drive away as fast as possible so no one knows he did it. It just makes sense for him to avoid the trouble.

         

        But you know what? That's not what a good hearted person would do.

         

        It is absolutely meaningless to make the lottery even offer an annuity payment. If the winner wants an annuity, he can go find a seller himself. The annuitized amount is completely misleading. How would you like winning a ONE TRILLION DOLLAR JACKPOT, that is annuitized for 1 dollar a year for a trillion years?

        I'm sure you would rather just win even 500k cash, no?

          Teddi's avatar - Lottery-008.jpg

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          Posted: June 19, 2013, 8:39 pm - IP Logged

          "discontinue the annuity payments, or make the annuity payment equal to the cash payout."

          It sounds like you still don't understand how the jackpot payouts work. That or you either want the lottery to give out money they never collected or keep more of what they did collect when somebody chooses the anuity. The only real jackpot is the cash, and the cash is a known percentage of sales. If you don't want all the cash right away you can collect it in small chunks and earn interest on the part you haven't collected yet. Unless you're stupid enough to ask for the cash you  aren't collecting yet to just be kept in a box and not invested the annuity payments  have to be more than the cash value.

          Of course you're right that it's the cash value that should be advertised, since the annuity value is only a theoretical amount that you can collect over an extended period of time. PB and MM have both extended the period of the annuity payments, and PB has deferred more of the principal to later payments, and the only realistic reason for that is to inflate the fictional amount that they advertise. Advertising the annuity value is akin to advertising a 30 year mortgage as only requiring you to pay back $1 for each $1 you borrow, since that's what it would cost if you paid it all back immediately after getting the money.  If a private company advertised the way the lotteries do the goverment would be suing them for false advertising.

          As for the taxes,  the job of the lotteries is to tell people how the lottery works, not how the rest of the world works. A player not understanding taxes is no more the concern of the lottery than a player's understanding of how their car works. Besides, what a player will owe in taxes depends on many factors the lottery can't possibly know.

          In the end, a good rule of thumb is that a single winner will  end up with about 1/3 of the advertised amount. Some players are smart enough to know that (or to find out), and some aren't.

          It sounds like you still don't understand how the jackpot payouts work. That or you either want the lottery to give out money they never collected or keep more of what they did collect when somebody chooses the anuity.

           

          No, I get how they work and in a way I was being facetious. I know there are some who prefer annual payouts as a way of reducing the risk that they won't manage a large lump sum properly. So for these people, I guess offer them a yearly payment option that isn't worth more than what the cash payment option is. Ridiculous really, which is the point. 

          If the amount collected is only $60M that's all that should be up for grabs. As you say, the advertised JP now is only a theoretical figure. And yes, it had dawned on me that in most other businesses, that form of business practice and advertising wouldn't be allowed.

          If it's one thing I've come to realize, is most buyers of anything aren't invested enough to find out details. It's why they changed the law for how prescrtiption meds are advertised. Saying consult your physician wasn't enough, nor were they allowed to assume consumers would read the fine print. They have to verbally tell you in the ad what the side effects are. I think the lottery realizes that's the mindset of most of the public. 

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

          The odds are about the same.

            Teddi's avatar - Lottery-008.jpg

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            Posted: June 19, 2013, 8:58 pm - IP Logged

            Do you get equally upset when car dealers advertise for only $200 a month you can own a new car?  You really  know you will eventually have to pay $25K+ plus interest if you ever do own that car even when it's old and a piece of junk.

            Well, considering we're on a lottery website on a lottery discussion forum, I thought I'd stick with discussing the lottery and not air my gripes towards ALL industries that engage in misleading advertising. A lot of industries have been forced to clean up their acts when it comes to their advertising methods. Just seems like the lottery isn't one of them. 

            That being said. I've never seen a car dealer advertise $x/month without letting you know how many months are involved. That seems more than fair to me.

            Would it really be so terrible for the lottery to say $105 million jackpot spread out over 30 years in their ads as well? I mean, if EVEN a dealership can do that, it says something when the lottery has to hide that fact in the fine print.

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

            The odds are about the same.

              Teddi's avatar - Lottery-008.jpg

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              Posted: June 19, 2013, 9:22 pm - IP Logged

              "Don't give me a check for $105M to hold up when they have no intention of giving that amount."

              Speaking of farces, this is a real one. The lottery commission will pay you $105 million and told you before you bought the ticket it will be paid off in yearly installments. They will give you the choice of getting a check for the cash value too. They would probably make the amount on fake check in the amount of the cash value if that was your choice.

              "Is it just me or does knowing someone might give me hundreds of millions of dollars still ridiculously exciting. There's no need to pretend that it's more than that."

              Which part of the lottery commission will pay you their advertised jackpot amount and there are players who will elect to take the payments and collect the full advertised prize don't you understand?

              I'm no advertising expert, but it sure makes more sense to me to advertise the top possible prize than to advertise about 3% of the tickets will be winners and of those, only 0.004% will win more than $100.

              In no other type of gambling win would this two tiered payout system be acceptable.

              In which other type of gambling win would this be okay to anyone? The people who win a $5M house aren't given an option of a 500K house if they want the house now or they can own parts of the house, once a year, until they get the full $5M house at the end of 30 years. 

              Okay, that example is a little ridiculous, but the underlying principle still stands.

              You don't win a diamond necklace a get a diamond per year over the course of 30 years.

               

              You don't win a BMW and then get told that if you want your winnings now you'll have to settle for a Corolla instead. 

              In all cases you end up with more than you started with, but no one would put up with it. 

              In any other regard but money, the underlying principle would be utterly ridiculous to anyone and lawsuits would be unending. But when it comes to cash, we accept it and are told to suck it up, because you're still getting more money than you spent. Well, the entire point of gambling is to end up with more money than you spend otherwise no one would gamble. Doesn't make what's being done any less disingenuous.

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

              The odds are about the same.

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                Kentucky
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                Posted: June 20, 2013, 1:18 am - IP Logged

                I can see both sides of this argument.

                 

                I completely agree with you, stack47, in that it "makes sense" for them to advertise the aunnitized jackpot, and give you a check for the annuitiized amount even though that's not what you're gonna get.

                 

                It also makes sense for a guy who accidentally hit and badly injured an old lady at night to drive away as fast as possible so no one knows he did it. It just makes sense for him to avoid the trouble.

                 

                But you know what? That's not what a good hearted person would do.

                 

                It is absolutely meaningless to make the lottery even offer an annuity payment. If the winner wants an annuity, he can go find a seller himself. The annuitized amount is completely misleading. How would you like winning a ONE TRILLION DOLLAR JACKPOT, that is annuitized for 1 dollar a year for a trillion years?

                I'm sure you would rather just win even 500k cash, no?

                "in that it "makes sense" for them to advertise the aunnitized jackpot, and give you a check for the annuitiized amount even though that's not what you're gonna get.

                If you're talking about deducting Federal and State taxes, I thought a smart guy like you (Jimmy4164 thinks you are smart) knew the lottery commissions are required by Federal and State law to deduct taxes.

                "It also makes sense for a guy who accidentally hit and badly injured an old lady at night to drive away as fast as possible so no one knows he did it. It just makes sense for him to avoid the trouble."

                Only an idiot would compare a hit an run driver to what "makes sense" in advertisement.

                "But you know what? That's not what a good hearted person would do."

                Then why even say it?

                "It is absolutely meaningless to make the lottery even offer an annuity payment. If the winner wants an annuity, he can go find a seller himself."

                And maybe Gloria took the cash to purchase a 40 year annuity.

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                  Kentucky
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                  Posted: June 20, 2013, 1:36 am - IP Logged

                  In no other type of gambling win would this two tiered payout system be acceptable.

                  In which other type of gambling win would this be okay to anyone? The people who win a $5M house aren't given an option of a 500K house if they want the house now or they can own parts of the house, once a year, until they get the full $5M house at the end of 30 years. 

                  Okay, that example is a little ridiculous, but the underlying principle still stands.

                  You don't win a diamond necklace a get a diamond per year over the course of 30 years.

                   

                  You don't win a BMW and then get told that if you want your winnings now you'll have to settle for a Corolla instead. 

                  In all cases you end up with more than you started with, but no one would put up with it. 

                  In any other regard but money, the underlying principle would be utterly ridiculous to anyone and lawsuits would be unending. But when it comes to cash, we accept it and are told to suck it up, because you're still getting more money than you spent. Well, the entire point of gambling is to end up with more money than you spend otherwise no one would gamble. Doesn't make what's being done any less disingenuous.

                  "In which other type of gambling win would this be okay to anyone?"

                  Have you ever read the fine print on the large jackpot slot machines or some of the Caribbean Stud jackpots?

                  "The people who win a $5M house aren't given an option of a 500K house if they want the house now or they can own parts of the house, once a year, until they get the full $5M house at the end of 30 years."

                  A little late to be changing the subject trying to compare apples to oranges. Besides those raffles usually include a cash value prize too and if they don't, bring an auctioneer along.

                  "In any other regard but money, the underlying principle would be utterly ridiculous to anyone and lawsuits would be unending."

                  Haven't you ever read the terms and conditions on the backs of lottery tickets?

                  "Well, the entire point of gambling is to end up with more money than you spend otherwise no one would gamble."

                  May be true, but you seem to be the only here that doesn't know all the choices are known BEFORE you decide to gamble. If you're just gambling to "end up with more money than you spend", why are you complaining about how the lotteries advertise their jackpots?

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                    Posted: June 20, 2013, 5:28 pm - IP Logged

                    "in that it "makes sense" for them to advertise the aunnitized jackpot, and give you a check for the annuitiized amount even though that's not what you're gonna get.

                    If you're talking about deducting Federal and State taxes, I thought a smart guy like you (Jimmy4164 thinks you are smart) knew the lottery commissions are required by Federal and State law to deduct taxes.

                    "It also makes sense for a guy who accidentally hit and badly injured an old lady at night to drive away as fast as possible so no one knows he did it. It just makes sense for him to avoid the trouble."

                    Only an idiot would compare a hit an run driver to what "makes sense" in advertisement.

                    "But you know what? That's not what a good hearted person would do."

                    Then why even say it?

                    "It is absolutely meaningless to make the lottery even offer an annuity payment. If the winner wants an annuity, he can go find a seller himself."

                    And maybe Gloria took the cash to purchase a 40 year annuity.

                    I made no personal attacks against you, yet in your response, what do you have, other than ad hominem?

                     

                    When did I even mention anything about taxes? I was clearly talking about the annuitized amount, and saying that it's not the true amount. That's it. Why in the world would you think I'm talking about taxes? If you want to insult my intelligence, at least prove that you have the intelligence yourself to judge. And the amount of reading comprehension (or lack thereof) certainly doesn't support your case.

                     

                    Your responses with absolutely no logic nor reasoning shows that you cannot argue against my points. You can only make ad hominem and red herring against some of my points, and some you can't even use logical fallacies against, so you choose to ignore completely. It's so sad when a person uses such desperate measures when they know they're wrong but cannot admit it.

                      duckman's avatar - ducklogodrake64x64
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                      Posted: June 20, 2013, 6:07 pm - IP Logged

                      Annunity amounts are all about marketing and attempts at making jackpots seem as high as possible. It's the same kind of marketing mind set on scratch tickets that have statements such as "Win up to 10 times on this ticket" which has absolutely nothing to do with how much the actual ticket was destined to be worth...

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                        Posted: June 21, 2013, 7:16 pm - IP Logged

                        I just thought of a good example.

                         

                        Next time, instead of annuity, they should just say

                         

                        "105,175,000,000 Jackpot!"

                         

                        And in fine prints say "In vietnamese dongs. Worth about 5,000,000 USD." Doesn't that sound nice? 105 billion jackpot!

                         

                        Actually this example is EXACTLY the same as what powerball/MM is doing. The currencies are different, because of the time value of money.

                         

                        In this case, the PV (Present Value) of 105 billion vietnamese dongs is about 5 million USD. Similarly, the PV of a 127 Million Powerball is just 77.3 Million USD. This is because money in the future is expected to be much more inflated and worth less. Adding together today's money and money in 30 years is exactly the same as adding together vietnamese dongs and USD at a 1:1 ratio. It doesn't make sense.

                         

                        In other words, the fundamental difference between the lottery and the car dealer, is that the car dealer isn't adding up different currencies. He's saying 200/month for however long, it's clear you're just paying 200 when that month comes, and not the PV of 200 dollars 10 years later.

                        IF the lottery really wants to continue with this annuity nonsense, don't give the winners a fake bloated check. Give them 30 post-dated checks to pose with.

                          Jon D's avatar - calotterylogo
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                          Posted: June 21, 2013, 9:54 pm - IP Logged

                          I just thought of a good example.

                           

                          Next time, instead of annuity, they should just say

                           

                          "105,175,000,000 Jackpot!"

                           

                          And in fine prints say "In vietnamese dongs. Worth about 5,000,000 USD." Doesn't that sound nice? 105 billion jackpot!

                           

                          Actually this example is EXACTLY the same as what powerball/MM is doing. The currencies are different, because of the time value of money.

                           

                          In this case, the PV (Present Value) of 105 billion vietnamese dongs is about 5 million USD. Similarly, the PV of a 127 Million Powerball is just 77.3 Million USD. This is because money in the future is expected to be much more inflated and worth less. Adding together today's money and money in 30 years is exactly the same as adding together vietnamese dongs and USD at a 1:1 ratio. It doesn't make sense.

                           

                          In other words, the fundamental difference between the lottery and the car dealer, is that the car dealer isn't adding up different currencies. He's saying 200/month for however long, it's clear you're just paying 200 when that month comes, and not the PV of 200 dollars 10 years later.

                          IF the lottery really wants to continue with this annuity nonsense, don't give the winners a fake bloated check. Give them 30 post-dated checks to pose with.

                          Horrible example.

                          Next time, instead of annuity, they should just say "105,175,000,000 Jackpot!" And in fine prints say "In vietnamese dongs. Worth about 5,000,000 USD."

                          The wager is in US Dollars, so the prize payment would be in USD. We don't pay with dongs here in America.

                          Actually this example is EXACTLY the same as what powerball/MM is doing. The currencies are different, because of the time value of money.

                          Incorrect. The value of the dong and dollar is different because of the currency exchange rate, not because of TVM.

                          It's so sad* when a person doesn't understand the difference between separate areas of finance.

                           

                          * denotes purposeful re-use of passive aggressive insult commonly employed by yoho.

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                            Kentucky
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                            Posted: June 21, 2013, 10:19 pm - IP Logged

                            I made no personal attacks against you, yet in your response, what do you have, other than ad hominem?

                             

                            When did I even mention anything about taxes? I was clearly talking about the annuitized amount, and saying that it's not the true amount. That's it. Why in the world would you think I'm talking about taxes? If you want to insult my intelligence, at least prove that you have the intelligence yourself to judge. And the amount of reading comprehension (or lack thereof) certainly doesn't support your case.

                             

                            Your responses with absolutely no logic nor reasoning shows that you cannot argue against my points. You can only make ad hominem and red herring against some of my points, and some you can't even use logical fallacies against, so you choose to ignore completely. It's so sad when a person uses such desperate measures when they know they're wrong but cannot admit it.

                            It wasn't a personal attack, but a response to an idiotic comparison.

                            "Your responses with absolutely no logic nor reasoning shows that you cannot argue against my points."

                            Where is the logic in saying "It also makes sense for a guy who accidentally hit and badly injured an old lady at night to drive away as fast as possible so no one knows he did it."?

                            Using your mindless logic it also makes sense to stop and a steal her purse before driving away as fast as possible.

                            I'm not arguing any of your points against the advertise jackpot because you have none. Do you actually believe it makes no sense from a business standpoint to advertise the highest possible jackpot they will pay?

                              rcbbuckeye's avatar - Lottery-043.jpg
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                              Posted: June 21, 2013, 11:51 pm - IP Logged

                              Horrible example.

                              Next time, instead of annuity, they should just say "105,175,000,000 Jackpot!" And in fine prints say "In vietnamese dongs. Worth about 5,000,000 USD."

                              The wager is in US Dollars, so the prize payment would be in USD. We don't pay with dongs here in America.

                              Actually this example is EXACTLY the same as what powerball/MM is doing. The currencies are different, because of the time value of money.

                              Incorrect. The value of the dong and dollar is different because of the currency exchange rate, not because of TVM.

                              It's so sad* when a person doesn't understand the difference between separate areas of finance.

                               

                              * denotes purposeful re-use of passive aggressive insult commonly employed by yoho.

                              "We don't pay (play) with dongs here in America. LOL.

                              Yoho, just check the annuity box on your playslip and you will get the annuitized amount. All of it. Or if you croak before you get all of it, your beneficiary will get the rest of it. It's not that hard. Really.

                              CAN'T WIN IF YOU'RE NOT IN

                              A DOLLAR AND A DREAM (OR $2)