Last Friday we questioned the Saturday night California Super Lotto Plus cash value offering of $4.2M because the implied Cash to Annuity Yield was an extremely high 6.075%.
No one won the jackpot that evening, and the California Lottery increased Wednesday's Annuity to $9.0M with an estimated Cash Value or $5.4M.
While the cash value was increased a whopping $1.2M from Saturday to this coming Wednesday, this value realigns the differential between Cash and Annuity to a more rational 4.63% implied yield. Based on current interest rate levels, we believe that these offerings are more realistic and fair to the players.
Since the California Lottery realigned the cash value offering so quickly, we believe that Saturday's minimal increase was purely an honest mistake, and not an attempt to withhold monies from the players.
We applaud California's quick action in adjusting the jackpot levels.
Note, however, that we continue to believe that anyone who wins the Super Lotto Plus Lottery of $9.0 million should seriously consider opting for the Annuity payout, since it would be difficult to achieve a guaranteed 4.63% tax deferred annual return on the $5.4M cash offered. But, that's our personal choice.
JL........
No one won the jackpot that evening, and the California Lottery increased Wednesday's Annuity to $9.0M with an estimated Cash Value or $5.4M.
While the cash value was increased a whopping $1.2M from Saturday to this coming Wednesday, this value realigns the differential between Cash and Annuity to a more rational 4.63% implied yield. Based on current interest rate levels, we believe that these offerings are more realistic and fair to the players.
Since the California Lottery realigned the cash value offering so quickly, we believe that Saturday's minimal increase was purely an honest mistake, and not an attempt to withhold monies from the players.
We applaud California's quick action in adjusting the jackpot levels.
Note, however, that we continue to believe that anyone who wins the Super Lotto Plus Lottery of $9.0 million should seriously consider opting for the Annuity payout, since it would be difficult to achieve a guaranteed 4.63% tax deferred annual return on the $5.4M cash offered. But, that's our personal choice.
JL........
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