Winning a multimillion-dollar lottery jackpot should be a dream come true. Then why do so many winners wish they’d never won at all?
Maxim, May 2005By Steve Kandell
It’s the single greatest moment of your life, so surreal you can’t believe it’s actually happening. You check your lotto ticket a hundred times, and unbelievably, the numbers you picked match the ones on the news. Suddenly you are being introduced to the world: WINNER. MULTIMILLIONAIRE. PUBLIC FIGURE. You stand in front of TV cameras and blazing lights, proudly holding an oversize check that’ll never fit into an ATM slot, no matter how many times you fold it. On your left is a grinning representative of the state lottery commission, eager to trot you out as the system’s most recent success story. Flashbulbs pop as the questions come at lightning pace:“What are you going to do with all that money?”“How did you pick the numbers?”“Will you quit your job?”“What are you going to do with all that money?”You feed the wolves and toss out a couple of clichéd lines about buying your folks a new house and donating to the Red Cross or Save the Whales, all while smiling wide for the cameras. Anyone in his right mind would kill to face these questions, and since no one can ever truly be prepared for a multimillion-dollar windfall, don’t feel bad that you lack any real answers. Most importantly, remember how you feel right now, at this very moment, in the face of all this adulation and good-natured envy. Because you will remember this as the precise moment your life completely and utterly turned to shit.The OutlawNo recent jackpot winner faced the press more memorably than 55-year-old Andrew Jackson “Jack” Whittaker. When the gregarious West Virginia contractor won a record-breaking $315 million Powerball prize on Christmas Day 2002, his Southern charm made him a national media darling. Even after Uncle Sam took an ample bite from the winnings—Whittaker took the lump sum payment option and was left with a mere $114 million after taxes—it was the single-largest undivided prize ever awarded in the United States. Looking half Johnny Cash, half Jed Clampett, Whittaker accepted the bounty wearing his trademark black suit, black cowboy hat, and devilish smirk. Despite his outlaw appearance, he promised to do noble things with his winnings, first cutting a check for $17 million to the Church of God and then using the rest to take care of the people closest to him. “It’s really going to excite my granddaughter and daughter,” he told the gathered reporters. “They’re the ones who are going to be spending the money. I get my enjoyment out of that.” Unlike most lottery winners, who make a point of disappearing after the obligatory press conference, Whittaker couldn’t stay out of the headlines. He developed a bad habit of carrying large sums of cash with him everywhere he went, forcing police in his hometown of Scott Depot to spend much of their time trying to track down thousands of dollars repeatedly stolen from his home, his office, and his SUV. One night in the summer of 2003, Whittaker passed out at a strip club called the Pink Pony, and his briefcase—filled with $545,000 in cash—was taken. Cops recovered the money and arrested an ex-stripper and the Pony’s manager for robbing Whittaker when he was unconscious.Then Whittaker began racking up his own charges. In January 2004, police arrested him for assaulting a local bar manager, whom he also apparently threatened to kill. Then he was arrested for drunk driving—twice. Finally, three female racetrack employees filed a suit claiming Whittaker had fondled them between pulls at a slot machine. (He denies all the charges.)By September 2004, things started getting weird: While Whittaker was out of town, cops investigating a reported break-in at his house found a body inside—it was a friend of his granddaughter Brandi, dead of a drug overdose. Three months later, Brandi herself went missing. Eleven days after that, her body was found wrapped in plastic behind a van. Whittaker’s pride and joy, the girl he’d named his company’s building after, was dead at 17 under mysterious circumstances, her body apparently dumped by her panicky boyfriend. “I wish all of this had never happened,” Whittaker’s wife, Jewel, cried to a local newspaper. “I wish I would’ve torn the ticket up.”It’s a feeling shared by lots of unprepared jackpot winners, and while Jack Whittaker’s story is by no means typical, lottery activists think it sets an important example—and may not be entirely his fault. “He has a chance now to educate people about the reality of the lottery,” says Dawn Nettles of the Texas-based Lotto Report, a newsletter she started to keep fellow lottery enthusiasts apprised of winning numbers. In 1999, after the state of Texas announced it would add four extra balls to its 50-ball lotto drawing, Nettles began to take a closer look at how the states conduct their lottery operations. It seemed to her that state lottery commissions were taking advantage of players who didn’t bother to read the fine print on the backs of their tickets and were using fuzzy math to determine how much to pay winners.These are just two of the reasons why she is currently helping to prepare a lawsuit against the Texas Lottery Commission on behalf of 13 winners who allege they were “cheated.” (Reagan Greer, executive director of the Texas Lottery Commission, refused to comment for this article.) The Lotto Report has become a one-woman crusade against what Nettles now sees as a morally corrupt con game that ruins more lives than it saves, and she regularly hears hard-luck stories about winners who have been ripped off or have otherwise hit the skids. “Everyone who wins has some sort of problem with their family or friends,” she says. “It’s a known fact.” "I Can't Trust Anybody."There was a time when “Bugs,” a 38-year-old oil field laborer, would blow $300 of every paycheck on the lottery. He realized his spending had gotten out of hand, so he eventually weaned himself down to an occasional ticket purchased on a whim. On one of those whims five years ago, he accidentally picked the number 50 when he meant to mark 40. It was a simple mistake that earned him an $8.9 million one-time payment. The money allowed him to quit his backbreaking job and become a benefactor to his friends and family—only to have them promptly turn around and exploit him. “I’d loan people money when they needed it,” Bugs says. “Then I’d hear them say, ‘Why should I ever pay him back? He’s a millionaire.’” Financial entanglements and poor investments led to ruined friendships and strained relations. His phone rang so often, he tore it off the wall and has yet to replace it.“Don’t get me wrong—I love being able to help people,” he says. “But I went too far and now I have more problems than I did before I won the money.” After he won, his ex-wife suddenly wanted to reconcile after years of estrangement, and he says he desperately wants to have a family. But even this modest goal seems unattainable. “My lawyer tells me that if I have a kid, I’d have to pay $40,000 a year in child support,” Bugs says. At this point he’s too cynical to believe a woman would be with him for any reason other than to milk him dry. In fact, he has grown so paranoid, he refuses to let us reveal any potentially distinguishing characteristics about him for fear of attracting more unwanted attention. All this multimillionaire will admit is that he lives alone in a trailer. It’s a single-wide. “I just want to be happy,” he says, “but it’s not gonna happen. I can’t trust anybody.” If he had to do it all over again, Bugs claims he’d rather not have won the jackpot. But he still buys lottery tickets on a regular basis.“Well,” he says with a shrug, “it’s something to do.”Falling Apart“Everybody resents you, everybody has their hands out, and you become totally isolated,” Nettles says about the ill-prepared lottery winner. “Either that’s where the drinking and drugs come in, or you go broke helping everyone else. The pressure is mind-boggling…look at what happened to Billie Bob Harrell.”In 1997, the 47-year-old Harrell was struggling to support his wife, Barbara Jean, and their three children on a Home Depot shelf stocker’s paycheck in Harris County, Texas. He pinned all his hopes for financial salvation on the one-in-47,000,000 odds of winning a lotto jackpot, because, well, somebody has to be that one. On June 28, Harrell won $31 million.Like Whittaker, he used the money to buy extravagant gifts and cars for his friends and family. But the demands for handouts from acquaintances and strangers alike never stopped, even after he changed his unlisted phone number seven times. He always had checkbook in hand to help parishioners of his church, and he quickly realized that $1.2 million a year wasn’t as much money as it seemed. Less than a year after winning the lottery, his family was in shambles and Barbara Jean filed for divorce.Desperate to get his hands on more cash, Harrell arranged to sell 10 years’ worth of future winnings—upwards of $6 million—to a Maryland-based firm called Stone Street Capital for $2.25 million, against the advice of his family, his lawyer, and anyone who could grasp that six is a bigger number than two and a quarter.As his life continued its downward spiral, Harrell became depressed and lost 50 pounds. He tried to reconcile with Barbara Jean, but she wasn’t interested. She did agree, however, to a family dinner at her house. So Harrell arrived at her place on the afternoon of Saturday, May 22, 1999. He was early, and no one was there.When his children came home that evening, they found their father’s naked body in the master bedroom, dead from a shotgun blast to the chest. Despite the autopsy report and three suicide notes found near his body, Harrell’s parents suspected foul play. The money from Stone Street mysteriously went missing, and Harrell’s heirs couldn’t afford to pay the estate taxes. It’s little wonder, then, that shortly before his death, Harrell had confessed to a financial adviser, “Winning the lottery is the worst thing that ever happened to me.”Are You Prepared?Much of the turmoil that comes from winning large sums of money stems from the fact that lotteries are overwhelmingly played by people with lower incomes who aren’t prepared to take on such enormous financial and emotional burdens. Even calling the lottery a “game” is misleading. Many people who “play” are just looking for a way out of an otherwise hopeless situation. “People who come into money need a plan and a sense of who they are and where they’re going,” says Steven Danish, Ph.D., a psychologist who has worked with the Virginia Lottery Commission. “They don’t find that out just because they won the lottery.”Though states try to downplay this aspect of the economic reality, it’s clear that the majority of the nearly $45 billion annual intake comes disproportionately from the poor and those without college educations. One recent study found that households making less than $10,000 per year spent an average of $289 on tickets annually, while households earning over $50,000 spent $187.While Whittaker, Bugs, and Harrell may seem like extreme examples of how winning the lottery can be more of a curse than a blessing, they aren’t alone. Last November, 49-year-old New York parking attendant Juan Rodriguez stepped forward to claim a $149 million Mega Millions jackpot. He had 78 cents in his bank account at the time. Within days his estranged wife Iris sued him for divorce…and for her share of his winnings. But Rodriguez’s main concern was for his mother—she still lived in Colombia, and he was terrified that his newfound notoriety could get her kidnapped. Not long after his travails became tabloid fodder, Rodriguez did everything he could to disappear from the public eye. He had learned what most lottery winners eventually grasp—there’s nothing worse than being found.Case in point: Richard Krenzer, a crane operator in Rochester, New York. He won a $25 million prize in December 2002, and four months later, was stabbed six times in the very same bar where he bought his winning ticket. Somehow he survived the attack—and, inexplicably, still lives in Rochester. So how did this brutal incident change his feelings about winning so much money?“I don’t know how you found me, but please put me on your ‘do not call’ list. Now. I have nothing to say.” Click.Hotter Than EverFor every sob story on record, countless others go unreported. Yet no one seems particularly worried that people will stop playing for fear of winning. Lottery revenue nationwide has grown an average of nine percent each year over the past four years. More than half of all Americans participated in some sort of lottery game in 2003, despite the fact that more than 25 percent of them admit the game is harmful both to individuals and to society.California’s most recent Richie Rich is Colin McLean, a 25-year-old from Newport Beach who won $81 million in January. Seemingly the anti-Whittaker, McLean eschewed the traditional glad-handing press conference, instead offering the usual thank-God-and-must-help-those-less-fortunate-and-buy-a-new-car platitudes through his lawyer. “With everything going on in the world,” he announced, “I think it’s inappropriate to gain notoriety for [winning the lottery].” Though the odds and common sense are against McLean, Dr. Danish thinks his youth, lack of family commitments, and aversion to publicity could give him an advantage where o many before him failed.Even doomsayer Dawn Nettles knows there are exceptions to the winning-is-losing rule. One of her close friends recently won $50 million, and before he even told his wife, he called a financial adviser who immediately put him on a strict budget. Already a well-paid businessman before the jackpot, he sticks to the budget religiously, fighting impulses to buy bulletproof Hummers and gold-plated Learjets. So far it’s been smooth sailing.So smooth, in fact, that even as Nettles prepares mountains of legal documents and spreadsheets designed to expose the Texas Lottery Commission as deceitful, she can’t always resist the urge to get in on the action. “I’m not proud of it,” she says, “but I just bought a ticket myself.”
Out for Blood
Several companies will gladly buy your yearly lottery payments…at a huge discount.If you can’t wait 25 years to collect your fortune, companies like Stone Street Capital and Prosperity Partners will come to the rescue. These firms hunt down winners and try to convince them to sell out. “We get their names from the state lotteries’ Web sites and track the people down,” a researcher from one of the firms anonymously admits. One in 10 winners shows interest right away; the other nine are called again…and again. Critics claim these companies prey upon winners’ most irresponsible instincts by providing heavily discounted one-time payments in the name of instant gratification. Some reports on these types of firms have put compounded interest rates on their loans as high as 35 percent, and if you’re not careful, the results can be devastating. One woman who won $4.2 million in Virginia in 1993 now owes more than $100,000 to a loan company. “Those kinds of companies are the worst thing that can happen to winners,” Dawn Nettles says. “If they can’t handle their newfound yearly income, how will they handle a lump sum payment?” We suggest you deal with your money the old-fashioned way: Bury it.
* * * * *Ask AnythingQ. So what the hell do I do if I win the lottery?A. Absolutely nothing. Well, not right away, anyway. “Life as you know it is over, and life after the lottery begins,” says Susan Bradley of the Sudden Money Institute, which specializes in counseling big winners. Before spending a cent, Bradley suggests, allow yourself a “decision-free zone.” Dawn Nettles concurs: “I tell winners to do nothing for 30 days.” To avoid blowing your wad, make a dream list of things you’d like to buy, then retain sensible lawyers and financial advisers to help you get it. To fend off predatory friends and family, change your phone number and consider moving. Once you’ve cashed in, put the loot into a money market account or short-term CD until you’ve decided on long-term investments. “Winners generally overcommit to buying homes and undercommit to making their money last,” says Bradley. According to one study, a full 70 percent of people who suddenly come into money wind up blowing it within a few years, so for once in your less-pathetic-than-it-used-to-be life, use your head.
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