aTypical Joe: a gay New Yorker living in the rural South

Tuesday, March 13, 2007

Lottery ticket-holder losing big time

So says The Philadelphia Inquirer about the no-show New Jersey half-winner of the $390 million Mega Millions prize. “The mystery millionaire has already lost as much as $140,625 - interest that the giant jackpot could have earned in a bank for a week. That’s nearly three times what the typical New Jersey resident makes in a year.” But does the winner actually get that lump sum?

I don’t think so but I can’t find an explanation of how the winnings will be paid out anywhere in the ample press coverage of whoop-dee-doo over the jackpot give-away. If the winner actually gets what the Inquirer implies, things have changed more than a little since that April 23, 1995 New York Times Magazine cover story on lottery winners, TICKET TO TROUBLE: Congratulations! You’ve won one million dollars. Your troubles have just begun, by Lois Gould. I still haven’t found a web reference to it (including in the NYTimes archive). I went to the library and found it on microfiche:

A Lotto grand prize winner who drives a yellow truck for the District of Columbia Department of Public Works has left the truck double-parked, lights flashing, while he meets for lunch at Union Station with his lawyer and a man who wants to pay him cash for what’s left of his million-dollar prize.

Eugene Peterson has no appetite for lunch. He has just lost Round 1 in his lawsuit against the Washington lottery over its refusal to let winners sell their prizes, or even give them away. Most lottery states have the same rule, which they say is for the winner’s protection. Left to his own devices, the argument goes, a winner with a really big wad of money in hand would probably squander or lose it all.

Peterson’s lawyer, David R, Fontaine, is hardly the first to ask the question: “Why doesn’t the state worry about people squandering their money on Lotto” - with up to 18-million-to-1 odds? [...]

Five state lotteries now offer a lump-sum “winner’s choice” paying about the same as companies like Stone Street, 40 or 45 cents on the dollar. You get the option only when you claim the prize; some states, in fact, require you to choose in advance, when you buy the ticket. For those who do take their lumps this way, the tax bite - on the whole amount - is instant too. And the lottery won’t wait while you consult a financial planner.

More winners now take some time to chink things over, and get advice, before they even identify themselves and show up to claim the prize. Peterson is thinking things over now, while his appeal is pending: The court upheld the D.C. lottery’s no-assignment rule, even though it didn’t exist when Peterson won.

If you play Lotto, what you buy for your dollar, besides a chance at a fortune, is a binding contract with the state. On the back of the ticket you sign an agreement to abide by the lottery’s rules. If they change the rules later; as they did in Washington, you’re still bound by your agreement.

SEE ALSO: The lottery: You’re rich! Wait - got a calculator? and Winning the lottery: Your deadbeat pal’s on line 2. I’ll have more as the Mega Millions saga continues.