Merle and Pat Butler of Red Bud, Ill., look happy in the video that has been circulating online. That’s not surprising, because in the video, Merle Butler is holding a novelty check for over $218 million.
He was the last of three winners to claim a share of the $656 million Mega Millions lottery prize that set the record for the largest jackpot in U.S. history.
Most likely, all three winners were pleased. But the Butlers were the only ones whose smiles were broadcast to the world. Maybe they enjoyed their turn in the spotlight; my guess is that they were just being good sports and would have preferred to keep the news quiet.
Unlike the other winners, however, the Butlers did not have a choice in the matter. Illinois requires that its lottery winners present their beaming faces for news conferences and other promotional appearances unless they have “compelling reasons” not to.
In fact, only six states - Kansas, Maryland, Delaware, Michigan, North Dakota and Ohio - allow lottery winners to remain anonymous. As it happened, the other two Mega Millions winners were from Kansas and Maryland. At a news conference, a poster stood in for the Kansas winner. The Maryland ticket belonged to three public school employees, who, like the Butlers, posed with a novelty check, but did so while holding the check, made out to “The Three Amigos,” over their faces.
The other 37 states that run lotteries, along with the District of Columbia, differ in just how much publicity they require of winners. Some, like Illinois, insist on dragging winners before a camera, while others simply publish the winners’ names and let media hounds follow the trail. In some places, including Colorado, Connecticut and Vermont, winners can evade the spotlight by forming a trust or a limited liability company to claim the money on their behalf. However, at least one state, Oregon, explicitly forbids this practice. I can’t imagine the strategy would play well in states that require news conferences, either. No matter where one stands on issues of corporate personhood, trusts and limited liability companies are notoriously un-photogenic.
On its website, the Illinois Lottery has this to say on winners’ obligations: “Multi-million dollar winners must participate in a one-time news conference, but we’ll always respect your wishes of privacy as much as possible.” Illinois Lottery Superintendent Michael Jones told The Associated Press that, despite the stated rule, the lottery would work with prizewinners wishing to retain their privacy. He warned, however, that “ultimately an enterprising reporter can find out who that person is.” Missouri, one of the states that doesn’t require a press conference but does release winners’ names, similarly advises winners that they may prefer to simply get their unwanted 15 minutes of fame over and done with, since “If you choose not to do a news conference, the media may still attempt to contact you at home or your place of employment.”
When it talks about “compelling reasons” for remaining anonymous, Illinois seems to have in mind things like restraining orders. But in my view, most people have compelling reasons not to broadcast personal financial information, particularly news about coming into sudden, unexpected wealth. Dennis Wilson, the Kansas Lottery’s executive director, said that the Mega Millions winner in that state chose to remain anonymous “for the obvious reasons that most of us would consider.”
There is the so-called “lottery curse,” in which big winners quickly find themselves broke after being barraged by requests from friends and distant family members and being aggressively targeted by salespeople. Roughly nine out of 10 big prize winners lose their windfall within five years, according to both a Florida study that looked at bankruptcies and a Stanford University study on lottery winners, each cited by Reuters. While some lottery winners are wise enough to hire reputable lawyers and financial advisors, others do not, and find themselves facing demands they are not equipped to handle.
According to the Missouri Lottery, 97 percent of jackpot winners say that the experience is a “very positive” one. Even accepting that statistic at face value means that, for 3 percent of winners, the hassles of winning, including having their names released to the media, outweigh the benefits of being handed thousands or millions of dollars. And despite advertising campaigns that urge players to dream big, we can assume that the percentage of less-than- positive outcomes is higher than 3 percent among those with the largest prizes.
The lotteries claim that they need to be able to identify winners in order to prove that they are actually paying out prizes. While lottery scams are a real problem, I doubt many people would steer clear of the Powerball out of skepticism. Independent auditors and state attorneys general could maintain public confidence, as they already do in the case of legally registered charities.
What lotteries really want, when they parade winners in front of the cameras, is to convince other people that they, too, could win. Of course the vast majority cannot and will not win. That’s what makes a lottery a lottery and not something productive, like an investment.
Amid the hype before the big Mega Millions drawing, several news and blogging sites released lists of things more likely than winning the jackpot. Yet such information makes little difference in the way most people behave. Thanks to a phenomenon known as the “availability heuristic,” people tend to consider events to be more probable if they can easily think of examples of those events occurring. So the more lottery winners we see, the more probable we think winning the lottery is, despite the fact that the real odds of a jackpot remain minuscule.
State-run lotteries thus exploit winners and losers alike. Winners are subjected to publicity they don’t want so that lotteries can sell more tickets to people who are almost uniformly destined to lose.
I hope, for the Butlers’ sake, that they avoid the “lottery curse.” So far, they seem to be doing the right things. They took the time to consult with financial advisers and an attorney, keeping their big news quiet before appearing for the mandatory news conference. They have both had full careers, have raised two children, and own the home they have lived in since 1977. If anyone is prepared to deal with the complications the publicized prize will bring, it is a mature, rock-steady couple like the Butlers seem to be.
Of course, their responsibility won’t stop strangers from making poorly informed judgments about their character, as I am doing here. Nor will it prevent the Butlers from being made to feel guilty when they are inevitably accosted by former coworkers, neighbors, charities and suddenly not-so-distant relatives. They will have to field not only more requests to give, but requests to give greater amounts as well.
A fundraiser for a local civic group, who might have been very happy with a $100 contribution before the Butlers’ windfall, may now look at them and say, “You have all this money, and you’re just giving $100?” The implication, which is often used to manipulate suddenly wealthy people, is that they do not deserve their good fortune and thus have an obligation to share when asked. A lot of us, raised to be good citizens on the playground and in kindergarten, have a very hard time saying “no.” The pressure is greater for those who live in small towns, where saying no means getting a healthy dose of snark and spite from people they will see every day.
All lottery winners are, by definition, lucky. The luckiest are those who live in states that respect winners’ privacy.
Posted by Larry M. Elkin, CPA, CFP®
Merle and Pat Butler of Red Bud, Ill., look happy in the video that has been circulating online. That’s not surprising, because in the video, Merle Butler is holding a novelty check for over $218 million.
He was the last of three winners to claim a share of the $656 million Mega Millions lottery prize that set the record for the largest jackpot in U.S. history.
Most likely, all three winners were pleased. But the Butlers were the only ones whose smiles were broadcast to the world. Maybe they enjoyed their turn in the spotlight; my guess is that they were just being good sports and would have preferred to keep the news quiet.
Unlike the other winners, however, the Butlers did not have a choice in the matter. Illinois requires that its lottery winners present their beaming faces for news conferences and other promotional appearances unless they have “compelling reasons” not to.
In fact, only six states - Kansas, Maryland, Delaware, Michigan, North Dakota and Ohio - allow lottery winners to remain anonymous. As it happened, the other two Mega Millions winners were from Kansas and Maryland. At a news conference, a poster stood in for the Kansas winner. The Maryland ticket belonged to three public school employees, who, like the Butlers, posed with a novelty check, but did so while holding the check, made out to “The Three Amigos,” over their faces.
The other 37 states that run lotteries, along with the District of Columbia, differ in just how much publicity they require of winners. Some, like Illinois, insist on dragging winners before a camera, while others simply publish the winners’ names and let media hounds follow the trail. In some places, including Colorado, Connecticut and Vermont, winners can evade the spotlight by forming a trust or a limited liability company to claim the money on their behalf. However, at least one state, Oregon, explicitly forbids this practice. I can’t imagine the strategy would play well in states that require news conferences, either. No matter where one stands on issues of corporate personhood, trusts and limited liability companies are notoriously un-photogenic.
On its website, the Illinois Lottery has this to say on winners’ obligations: “Multi-million dollar winners must participate in a one-time news conference, but we’ll always respect your wishes of privacy as much as possible.” Illinois Lottery Superintendent Michael Jones told The Associated Press that, despite the stated rule, the lottery would work with prizewinners wishing to retain their privacy. He warned, however, that “ultimately an enterprising reporter can find out who that person is.” Missouri, one of the states that doesn’t require a press conference but does release winners’ names, similarly advises winners that they may prefer to simply get their unwanted 15 minutes of fame over and done with, since “If you choose not to do a news conference, the media may still attempt to contact you at home or your place of employment.”
When it talks about “compelling reasons” for remaining anonymous, Illinois seems to have in mind things like restraining orders. But in my view, most people have compelling reasons not to broadcast personal financial information, particularly news about coming into sudden, unexpected wealth. Dennis Wilson, the Kansas Lottery’s executive director, said that the Mega Millions winner in that state chose to remain anonymous “for the obvious reasons that most of us would consider.”
There is the so-called “lottery curse,” in which big winners quickly find themselves broke after being barraged by requests from friends and distant family members and being aggressively targeted by salespeople. Roughly nine out of 10 big prize winners lose their windfall within five years, according to both a Florida study that looked at bankruptcies and a Stanford University study on lottery winners, each cited by Reuters. While some lottery winners are wise enough to hire reputable lawyers and financial advisors, others do not, and find themselves facing demands they are not equipped to handle.
According to the Missouri Lottery, 97 percent of jackpot winners say that the experience is a “very positive” one. Even accepting that statistic at face value means that, for 3 percent of winners, the hassles of winning, including having their names released to the media, outweigh the benefits of being handed thousands or millions of dollars. And despite advertising campaigns that urge players to dream big, we can assume that the percentage of less-than- positive outcomes is higher than 3 percent among those with the largest prizes.
The lotteries claim that they need to be able to identify winners in order to prove that they are actually paying out prizes. While lottery scams are a real problem, I doubt many people would steer clear of the Powerball out of skepticism. Independent auditors and state attorneys general could maintain public confidence, as they already do in the case of legally registered charities.
What lotteries really want, when they parade winners in front of the cameras, is to convince other people that they, too, could win. Of course the vast majority cannot and will not win. That’s what makes a lottery a lottery and not something productive, like an investment.
Amid the hype before the big Mega Millions drawing, several news and blogging sites released lists of things more likely than winning the jackpot. Yet such information makes little difference in the way most people behave. Thanks to a phenomenon known as the “availability heuristic,” people tend to consider events to be more probable if they can easily think of examples of those events occurring. So the more lottery winners we see, the more probable we think winning the lottery is, despite the fact that the real odds of a jackpot remain minuscule.
State-run lotteries thus exploit winners and losers alike. Winners are subjected to publicity they don’t want so that lotteries can sell more tickets to people who are almost uniformly destined to lose.
I hope, for the Butlers’ sake, that they avoid the “lottery curse.” So far, they seem to be doing the right things. They took the time to consult with financial advisers and an attorney, keeping their big news quiet before appearing for the mandatory news conference. They have both had full careers, have raised two children, and own the home they have lived in since 1977. If anyone is prepared to deal with the complications the publicized prize will bring, it is a mature, rock-steady couple like the Butlers seem to be.
Of course, their responsibility won’t stop strangers from making poorly informed judgments about their character, as I am doing here. Nor will it prevent the Butlers from being made to feel guilty when they are inevitably accosted by former coworkers, neighbors, charities and suddenly not-so-distant relatives. They will have to field not only more requests to give, but requests to give greater amounts as well.
A fundraiser for a local civic group, who might have been very happy with a $100 contribution before the Butlers’ windfall, may now look at them and say, “You have all this money, and you’re just giving $100?” The implication, which is often used to manipulate suddenly wealthy people, is that they do not deserve their good fortune and thus have an obligation to share when asked. A lot of us, raised to be good citizens on the playground and in kindergarten, have a very hard time saying “no.” The pressure is greater for those who live in small towns, where saying no means getting a healthy dose of snark and spite from people they will see every day.
All lottery winners are, by definition, lucky. The luckiest are those who live in states that respect winners’ privacy.
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