Saturday, February 20, 1999
Lackluster Lotto goes to smaller base
BY MARK CHELLGREN
The Associated Press
FRANKFORT — The Lotto Kentucky jackpot for today is $1.6 million, $900,000 less than it would have been before a change in policy the Kentucky Lottery Corp. has made to keep from losing its own money.
Rising prices for the annuities to cover winnings, players spoiled by huge jackpots in other games and some plain old-fashioned boredom have combined to force lottery officials to use smaller prize packages.
Lottery spokesman Rick Redman said the policy change is an uncomfortable one because smaller prizes usually translate into lower sales. But the alternative was for the lottery to open itself up to losing money if winners come along too often.
“That's where we get into that vicious cycle,” Mr. Redman said Friday. “We want to entice sales, but you can't expose yourselves.”
The lottery pays jackpots two ways. When a winner chooses 20 annual installments for the payout, the lottery buys a bond or annuity that pays the total face amount of the jackpot during that time. When a winner picks a cash payoff, the lottery pays the amount it would take to buy the annuity.
This past Wednesday's $1.5 million jackpot would have required $1,134,850 to pay the jackpot and other estimated prizes. Howard Kline, the lottery's chief financial officer, said total sales through Wednesday for the current Lotto Kentucky cycle were $1.4 million.
For the last three years, when a Lotto Kentucky jackpot was not hit, the prize grew by $200,000 for a Wednesday drawing and $300,000 for a Saturday drawing. After the lottery paid a $9 million prize on Jan. 27, the new prize elevator took effect with a $100,000 increase.
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