Jackpots in the New York State Lottery have shrunk by as much as $3 million in recent weeks.
The state lowered its jackpot payouts after low interest rates this past year forced it to dip into reserve funds to come up with more up-front cash for jackpots.
When a Lotto jackpot is won, the lottery does not immediately pay out the full winnings. Instead, the lottery determines how much it will have to invest in government bonds over 26 years so the investment increases in value to match the advertised jackpot.
To pay a $25 million jackpot last year, the state had to invest $12 million up front. Now, the same jackpot would cost $14 million. For the past two years, the jackpot for a Lotto drawing when there was no winner would roll over to $10 million. Beginning Nov. 14, the jackpot rose to $8 million.