NY State Lottery Considers An Investment Gamble

At first, we thought this Bloomberg News lede was from The Onion: "The New York Lottery is proposing a gamble where the odds aren’t always in its favor -- moving its $1.3 billion prize fund into investments such as stocks, corporate bonds, real estate and hedge funds and out of the safety of U.S. Treasuries." But it turns out lottery officials are really considering the risky move in order to increase revenue, as the state faces a huge budget deficit. Lottery director Gordon Mendencia tells Bloomberg News, “We’re not going to be wild and crazy with investments" and is looking for “solid investments, like a pension fund or endowment" that will perform well, versus the Treasury bonds that have been yielding very little. If the NY Lottery did switch to higher-performing investments, it might be able to reduce the lump sum payments given to winners and free up money for state education funding. One lottery enthusiast is okay with that: "If I win $30 million, it won’t break my heart if the cash prize is $18 million instead of 20.”