Is California Digging into Lottery Coffers?

Since nobody won Super Lotto Plus on Wednesday, the advertised annuity jackpot for Saturday 06/27 was increased to $8.0 million from $7.0 million.

However, after a bit of delay, the estimated Cash Payment posted on Thursday was $4.2 million, up only $0.1 million from the previous drawing.

Based on an $8.0M jackpot with a $4.2M cash value, we calculate that the implied yield of Saturday's drawing is 6.075%.

By comparison, the previous drawing's yield was 4.878% while the yield of the 10-year Treasury Note on Thursday was less than 3.60%.

Had the yield remained constant from Wednesday to Saturday, we estimate that the cash value for Saturday should be $4.7 million.

The difference between our estimated cash value of $4.7M and California's stated $4.2M is $500,000 dollars, or 1/2 of a million dollars! That's a lot of money.

Realizing that:

1. The State of California is strapped for cash, and that
2. Most lottery winners automatically opt for the cash value,

we wonder if:

This is simply an honest mistake?

or

Is California trying to add another
half a million dollars
into its revenue by
taking it away from unsuspecting Lottery Winners?

We'd love to know what you think.

JL........

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