Great find, James78! Thanks for being on top of it. Here is the text of the memo, the bold has been added by me:
ISSUE
The California State Lottery (Lottery) proposes regulation amendments to modify the
SuperLotto Plus annuity structure to a 5 percent graduated annuity rate, which will reduce
the prize expense and increase funding for education.
BACKGROUND
Currently, SuperLotto Plus has a 4 percent graduated annuity whereas Mega Millions®
and Powerball® have a 5 percent graduated annuity. The Lottery is estimating an
approximate savings of 2 percent per year in annual SuperLotto Plus jackpot prize
expense by utilizing the 5 percent graduated annuity. Had the Lottery been using a
5 percent graduated annuity over the last four fiscal years, it would have saved
approximately $6 million dollars, with individual year’s savings ranging from $769,000 to
$2.4 million.
DISCUSSION
Increasing the graduated annuity rate results in larger dollar values being paid out in the
later years of the annuity stream. This reduces the overall cost of the annuity prize. Since
the cash value of a jackpot prize is based on the cost of the annuity, this change will result
in lower prizes whether the annuity or the cash option is selected. This recommended
change is consistent with Mega Millions and Powerball and supports the Lottery’s effort
to improve profitability and increase contributions to public education.
To put this in better context for people who are reading this thread but don't know CA games very well, the advertised annuity value of the SLP jackpot is increased by exactly $1,000,000 each rollover, regardless of ticket sales (not true for other jackpot games). So they are screwing players, especially in the cash option, but in a way that most players won't feel very much or notice.
I don't know what it means for other SLP players, but personally, I only play when the cash value of the jackpot hits a certain amount. The proposed change means it will take longer to hit that target on average, so I will probably have slightly less occasion to play.