I'm not sure how to feel about this guy after reading about "grab.com". Not sure how I missed that back in 2000 but apparently Andrew started a company with a "billion dollar prize" from an online lottery. Turns out no one one the billion dollar prize but someone won a million dollars from their random drawing. http://www.allbusiness.com/health-care/health-care-professio...
So naturally I had to look at the odds, and if you pull up grab.com from archive.org you see:
"Billion Dollar Sweepstakes: GRAND PRIZE PAYABLE IN 20 ANNUAL INSTALLMENTS OF US $5,000,000 EACH, FOLLOWED BY 10 ANNUAL INSTALLMENTS OF US $10,000,000 EACH, FOLLOWED BY 9 ANNUAL INSTALLMENTS OF US $20,000,000 EACH, FOLLOWED BY A BALLOON PAYMENT OF US $620,000,000 IN THE 40TH YEAR, WITHOUT INTEREST. ODDS 1:2,404,808,340. NO PURCHASE NECESSARY.
WINNER MAY TAKE IMMEDIATE PAYOUT OF US $170,000,000 INSTEAD OF ANNUITY."
So 62% of the payment came 40 years later, otherwise a payout of $170 million. Lame. Yet, I guess enough people were foolish enough to sign up for it...
Most huge cash prizes are annuitized. I went on Who Wants to Be a Millionaire (airing Wednesday) knowing that even if I answered every question correctly, I would at best be looking at a cash value of under $800,000. It's just the way it works, and it's always spelled out in the official rules.
They must have changed the prize distribution procedure for Who Wants to Be a Millionaire. I was on the show in 2000. They gave us a big speech about how if you win a big prize, they will literally cut you a check for that amount and you should talk to a tax advisor before spending anything. One of their early winners got into some tax trouble. I didn't win anything on the show, but they sent me a check for $400 in January to cover my taxes on the plane tickets and hotel.
Ah, the primetime show with Regis. How many times I played their phone game. I went on the syndicated show, where they got rid of the qualifying round and now award everyone $1,000 even if they answer the first question wrong.
However, they do annuitize the million and half-million dollar prizes and don't pay for your travel expenses (but again, everyone leaves with a $1,000 minimum).
Well you make good points, but paying out 62% on the 40th year only seems a bit extreme, it's not quite an annuity is it if the payments aren't fixed to a certain amount?
Every US lottery I've seen uses the same system. It's not nice, sure, but it's not uncommon. Also, since all the US lotteries use it, I suspect there's a reason. For example, perhaps the underwriters require it. (Or perhaps since they all do it, they all can do it).
OK, that's what I meant. I presumed the grandfather was complaining about the lottery being split over multiple years rather being awarded all at once (like the UK or Irish lottery for instance).
So naturally I had to look at the odds, and if you pull up grab.com from archive.org you see:
"Billion Dollar Sweepstakes: GRAND PRIZE PAYABLE IN 20 ANNUAL INSTALLMENTS OF US $5,000,000 EACH, FOLLOWED BY 10 ANNUAL INSTALLMENTS OF US $10,000,000 EACH, FOLLOWED BY 9 ANNUAL INSTALLMENTS OF US $20,000,000 EACH, FOLLOWED BY A BALLOON PAYMENT OF US $620,000,000 IN THE 40TH YEAR, WITHOUT INTEREST. ODDS 1:2,404,808,340. NO PURCHASE NECESSARY. WINNER MAY TAKE IMMEDIATE PAYOUT OF US $170,000,000 INSTEAD OF ANNUITY."
So 62% of the payment came 40 years later, otherwise a payout of $170 million. Lame. Yet, I guess enough people were foolish enough to sign up for it...