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From: terryl@tekcrl.UUCP ()
Newsgroups: net.consumers
Subject: Re: Question about Sweepstakes
Message-ID: <427@tekcrl.UUCP>
Date: Thu, 9-Jan-86 16:34:59 EST
Article-I.D.: tekcrl.427
Posted: Thu Jan  9 16:34:59 1986
Date-Received: Sat, 11-Jan-86 07:40:57 EST
References: <474@iheds.UUCP> <829@bu-cs.UUCP> <7951@amdcad.UUCP>
Lines: 24

> In article <829@bu-cs.UUCP> bzs@bu-cs.UUCP (Barry Shein) writes:
> >Re: How do they make money on those $10M sweepstakes selling magazines?
> >	-Barry Shein, Boston University
> 
> 
> I just saw a interesting calculation of the California Lottery
> situation. I don't remember the details but if you win two
> million dollars they only give you $100K per year for 20 years.
> So just for fun lets say they put the other 1.9M$ in the bank
> or a money market fund making say 10%. In a year when they owe
> you another $100K, they've made $190K in interest.

     Except for a couple of lotteries back East, that's how most of the
state-run lotteries are paid off.

> You know how those $10M magazine sweepstakes always come with some
> bank's gearantee of "sufficient funds on deposit"? Most of those
> sweepstakes are also $X per year for 20 years, so "sufficient funds
> on deposit" is nowhere near $10M. I'm not saying they don't sell
> mailing lists too, but I am saying that those sweeps don't cost
> as much as the prizes are big.

     True, except for one of the $10M magazine sweepstakes, it takes
40 YEARS to pay off the $10M (another takes 30 YEARS).