Illinois budget deadlock may force shutdown of Powerball and Mega Millions

[NewYorkExpress]

http://money.cnn.com/2017/06/17/news/illinois-powerball-mega-millions-lottery-tickets/index.html

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[ProudModerate2]

I didn't read the article, but I thought that the prize money comes directly from the sale of the tickets. The price that consumers pay for each ticket has the full amount necessary to pay the prize(s), plus a small amount that goes to the state for education or other budgetary necessities.

So the money is there to pay prizes, up-front. All they have to do is "save" the funds necessary to pay prizes. What the hell is Illinois doing ? Do they have their hands in the cookie jar, and are spending monies that are not allocated to them ? Are they reaching-in and grabbing money from the prize fund ? That is just silly ? How are they getting away with this, and is it legal ?

[pbrower2a]

State lotteries need to be self-funding. They should be separate from the budget (except for profits going into the general fund or as otherwise dictated by statute).

Generally-accepted accounting principles (GAAP) require that that income be recognized only when a service is performed. For a lottery that would be the awarding of prizes (if those are not forfeited in accordance with the rules of the lottery). States must not borrow against inflows of cash from bettors.

Payoffs might be made as lump sums of cash or installments as an annuity, depending upon the nature of the prize. It is best that the lottery buy an annuity on behalf of the winning bettors and not control the annuity. There are plenty of entities that can sell such an annuity, and they can do so at modest cost. Those are called insurance companies. 

[ProudModerate2]

State lotteries need to be self-funding. They should be separate from the budget (except for profits going into the general fund or as otherwise dictated by statute).

But I thought they were.

States must not borrow against inflows of cash from bettors.

I agree completely. State governments can not, and should not, use the prize fund as collateral for loans (state bonds). It's not their money ! How are they able to borrow against an asset that is not theirs ?

[ProudModerate2]

Ok ... I read the article now.
The article is short and doesn't really say that the money is not present or "in a safe place" to pay winners. I think the problem is that without a Illinois budget approved by their legislature and governor, then the lottery bureaucracy (department) required to process the winning tickets and pay the winners (in that state only), is not functioning/operational.
This is the difficulty to why Illinois winners are not being paid.

[Green Line]

Shut it all down.  The lottery, the highways, the schools.  We can't afford it.

[dead0man]

How the hell do you screw up a state run lottery?  Oh yeah, decades of corruption!
 Illinois is a train wreck.  I'm glad I got out of that sh**t stain.

[muon2]

The IL Constitution requires all expenditures to have specific appropriation authority. There are three ways that happens: the legislature appropriates the money specifically for that fiscal year, the legislature passes a statute providing for a continuing appropriation in all fiscal years, or a court orders the appropriation. The lottery fund is state money, and even though the fund is segregated from other state moneys, it still requires an appropriation. Bills have been filed to make the lottery a continuing appropriation but haven't been moved.

[Matty]

It boggles my mind that a state with the city of chicago in it can't be better financially

[Okay, maybe Mike Johnson is a competent parliamentarian.]

Illinois could makes its first great contribution to US politics since the Haymarket riot by becoming the first state to place a moratorium on its dystopian lottery.

[SWE]

Hopefully this happens.