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NY Lottery Lump Sum Payout On Scratch Tickets Is Higher. How Come?

Topic closed. 3 replies. Last post 2 years ago by maringoman.

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maringoman's avatar - images q=tbn:ANd9GcTbRxpKQmOfcCoUqF2FyqIOAwDo7rg9G-lfJLAALPGWJWwiz19eRw
Massachusetts
United States
Member #37433
April 14, 2006
2747 Posts
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Posted: August 4, 2014, 11:00 pm - IP Logged

Most states that sell scratch offs have some that players can win $1M which is usually an annuity.

For MA if you win $1M and choose to claim it as a lump sum, you automatically lose about 35% of that $1M. Then on the $650,000 that remains you still have to pay taxes thereby ending with less than half of the jp. That's not the case in NY. There, the lump sum payout is $780,000 so after taxes you still end up with more than half of the jp. Does anybody know why the lump sum pay-out for NY tickets is higher than that of MA and many other states?

That money's gone fo ever

    LottoMetro's avatar - Lottery-024.jpg
    Happyland
    United States
    Member #146344
    September 1, 2013
    1131 Posts
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    Posted: August 4, 2014, 11:12 pm - IP Logged

    Most states that sell scratch offs have some that players can win $1M which is usually an annuity.

    For MA if you win $1M and choose to claim it as a lump sum, you automatically lose about 35% of that $1M. Then on the $650,000 that remains you still have to pay taxes thereby ending with less than half of the jp. That's not the case in NY. There, the lump sum payout is $780,000 so after taxes you still end up with more than half of the jp. Does anybody know why the lump sum pay-out for NY tickets is higher than that of MA and many other states?

    The lump sum is the real prize not the annuity even though that's the one advertised......some states invest at different rates thus the annuity is higher. Kind of like the differences between Powerball and Mega Millions. If you adjust the prizes for cost they will still be different due to the way each group invests the pool.

    If NY scratcher lump sum is higher at the same odds and price then it is a better deal. But many times this will not be the case

    If the chances of winning the jackpot are so slim, why play when the jackpot is so small? Your chances never change, but the potential payoff does.
    If a crystal ball showed you the future of the rest of your life, and in that future you will never win a jackpot, would you still play?

    2017: 0% (0 tickets)
    P&L % = Total Win($)/Total Wager($) - 1

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      Kentucky
      United States
      Member #32652
      February 14, 2006
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      Posted: August 4, 2014, 11:21 pm - IP Logged

      The lump sum is the real prize not the annuity even though that's the one advertised......some states invest at different rates thus the annuity is higher. Kind of like the differences between Powerball and Mega Millions. If you adjust the prizes for cost they will still be different due to the way each group invests the pool.

      If NY scratcher lump sum is higher at the same odds and price then it is a better deal. But many times this will not be the case

      With a fixed $1 million annuity prize, the cash value depends on when the ticket is validated and can change for the reasons you mentioned. A larger discrepancy might be because of the number of payments which changes the amount of cash necessary.

        maringoman's avatar - images q=tbn:ANd9GcTbRxpKQmOfcCoUqF2FyqIOAwDo7rg9G-lfJLAALPGWJWwiz19eRw
        Massachusetts
        United States
        Member #37433
        April 14, 2006
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        Posted: August 5, 2014, 9:15 am - IP Logged

        I will look into the issues raised and see if my question is answered. From a casual look, it seems to pay better if you play scratch offs in NY.

        That money's gone fo ever