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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.”
NY State Lottery Considers An Investment Gamble
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State-run lotteries are a regressive tax on the poor and should be shuttered.
A little while ago, this would have been right up Bernie Madoff's alley.
Where O where can we find a really good ponzi scheme in which to invest. Maybe we could buy some good mortgage backed securities, or buy some GM or a big bank stock. Yeah that sounds like a really good idea.
The way things are going, U.S. Treasuries are probably not a safe investment either.
I know this guy Bernie; he always has great returns and would definitely be a great investment.
They are regressive with regards to intelligence.
So if I won the lottery and decided to get the payout over 20 years or so, if the fund goes bankrupt because of bad investments then I guess I won't get the rest of the money? Is that the gamble?
Maybe Lottery winners won't notice that they haven't won anything at all. Maybe the next $30 million prize winner will actually owe the NYS Lottery $20 million.