In the fall of 2018, America was infected with Mega Millions fever. The jackpot for the Mega Millions — one of the two biggest nationwide lottery games, along with Powerball — had climbed to an astonishing $1.6 billion, the highest in history, and across the country, cartoon dollar signs were popping into people’s eyes.
After weeks of breathless media speculation, it was announced: A single ticket, sold at a KC Mart in Simpsonville, South Carolina, had won the grand prize — a feat with the approximate odds of one in 302.6 million.
Yet the ticket went unclaimed for months. A winner only has 180 days to come forward with the prize ticket; otherwise, the money would be dispersed among the states based on ticket sales, and the expected windfall for South Carolina ($61 million) and even the clerk whose convenience store sold the golden ticket ($50,000) would evaporate.
Finally, on March 4, just under the cutoff, a woman came forward to claim the prize. But because South Carolina law allows lottery winners to remain anonymous, we may never know the name of the person whose stroke of luck let her walk away with a lump sum of nearly $878 million, the largest payout to a single winner in history.
Four days later, news outlets had moved on: to the story of an unemployed 54-year-old man who won $173 million off a Mega Millions ticket he bought — and mistakenly left — at a Quick Check in Phillipsburg, New Jersey, and was able to reclaim after a Good Samaritan turned in the ticket for the store to hold.
We love stories like this. Lottery wins are a staple of local news coverage, and periodically, when the jackpot climbs high enough, the national press gets in on the action too — and even people who otherwise would never think of it might find themselves shelling out for a ticket. It’s that potent combination of envy and hope; in a world where the American ethos of hard work and perseverance paying off seems increasingly like a lie, where the chips seem stacked against us anyway, why couldn’t it be me, or you, who somehow beats the odds and finds riches beyond measure at a Quick Check off the interstate?
But while the game of lightning-strike fame and fortune might seem like a product of the modern culture that birthed Instagram and the Kardashians, the roots of the lottery in America are as old as the country itself.
A brief history of the lottery
First, a few definitions. Per the North American Association of State and Provincial Lotteries (NASPL) “lottery” can refer to three things:
1) An entity that operates or administers lottery games — usually a governmental or quasi-government agency or a corporation licensed by a government. 2) A game in which all plays have an equal chance of winning. 3) A game with three components for the players: a prize to be won, a chance to win and not win, and an element of consideration (such as buying a ticket) to enter the game.
Under the umbrella of lottery games are many types: number or daily games (such as Pick 3 and Pick 4), instant games (scratch-off tickets), keno (in which players pick numbers to match numbers chosen by the game from a certain quantity of numbers — 10 of 20 of 80, for instance), online games, and more. The ones that collect the biggest jackpots in North America, and thus the ones you’ve probably heard the most about, are the Mega Millions and Powerball games (more on these below).
While the ways to play have expanded over time, along with the jackpots, the basic concept of lotteries is swirled into the DNA of the country; they were first used to fund the colonies and eventually became the province of the newly formed states. As Jonathan Cohen detailed in a great piece for Vox, they served (and still do) as a sort of voluntary tax, bringing in significant sums for the government without the type of pushback that raising tax rates elicits:
Once states took control of the lottery system, they could authorize games as they saw fit in order to help specific institutions raise money. State governments owned lottery wheels, which were used for drawing tickets, and politicians would lend them to the organizations the state permitted to hold drawings.
Though conservative Protestants have opposed gambling for centuries, many of the first church buildings in the United States were built with lottery money. Many of the world’s most elite universities, too, owe their existence to lotteries. Parts of the campuses of Harvard, Yale, Brown, Princeton, and Dartmouth were paid for with lottery money, and the New York legislature held multiple lotteries to fund the creation of what is now Columbia University. And because lotteries were tied to specific institutions — or even specific buildings — the public had obvious evidence of their effectiveness in avoiding taxes and building the new nation.
Lotteries fell out of favor around the 1850s and were outlawed in the 1890s, and it wasn’t until the mid-20th century that the modern lotto emerged: first in 1934 with the Puerto Rico Lottery, then 30 years later with the New Hampshire Sweepstakes. Lotteries were then still illegal at the federal level, but the Department of Justice determined the New Hampshire contest would be permissible as long as tickets didn’t cross state lines (people in Rhode Island, New Jersey, and New York were arrested for being in possession of New Hampshire lottery tickets).
According to NH Magazine, it proved to be a huge draw: People flocked to the Granite State to take part in the sweepstakes, which was a horse race; names of ticket holders would be drawn and randomly assigned to one of the 11 competing horses, and dollar amounts were designated for first place ($100,000), second place ($50,000), and so on. If their horse won, so would they. By the time the race began, the state had sold $5.7 million in $3 tickets. Among that first lotto’s grand prize winners were a barber named Frank Malkus and his wife Eleanor, who won $100,000 off a stallion named Roman Brother (about $819,000 today).
After that, the lottery began to catch on in other states. According to the NAASPL, Massachusetts pioneered the scratch-off game in 1975; the “quick pick” numbers option, which now accounts for 35 percent of all lottery sales, launched in 1982; and three years later, Maine, New Hampshire, and Vermont banded together for the first multi-state lottery, the Tri-State Megabucks.
These days, 44 states and the District of Columbia run their own lotteries. The six states that don’t — and where you also can’t play Powerball or Mega Millions — are Alabama, Alaska, Hawaii, Mississippi, Utah, and, somewhat incredibly, Nevada, home to the gambling paradise of Las Vegas. The reasons vary, per the BBC; Alabama and Utah’s absences are motivated by religious concerns; the state governments of Mississippi and Nevada, which allow gambling, already get a cut of that revenue and don’t want a competing entity to cut into the profits; and Alaska, thanks to its budget surplus from oil drilling, lacks the “fiscal urgency” that might motivate other states to adopt the lottery.
So people in those states who want a crack at the multimillion-dollar jackpots regularly offered by the major multi-state lotto games, Powerball and Mega Millions, are out of luck.
And what, you might ask, is the difference between the two games, anyway? According to Slate, there’s not much. Powerball draws five balls from a lot of 69, versus five from 70 for Mega Millions. And while the two were introduced at different times (Powerball in 1988, Mega Millions in 1996), and were originally mutually exclusive — states where one game could be played couldn’t offer the other — that hasn’t been true since they merged jurisdictions in 2009. Now they’re offered everywhere that also has a state lotto, and per Slate’s Nick Greene, there’s little appreciable difference between them, which is likely intentional to motivate sales:
If it seems like everyone rushes to play Powerball one month and then stocks up on Mega Millions tickets the next, that’s because it’s intentional. The cycle of highly publicized mega-jackpots followed by a trickle of lesser winnings is by design. Powerball reduced its odds to produce bigger prizes in 2015, and Mega Millions followed suit two years later. The result is a kind of seesaw effect, in which the games’ terrible odds allow their jackpots to grow ever-bigger.
Opponents argue that the lottery preys on the already marginalized
Lotteries may be great for states, whose coffers swell thanks to both ticket sales and winners, but that money comes from somewhere, and study after study has suggested it’s largely from low-income people, minorities, and people with gambling addiction.
Vox’s Alvin Chang looked at the data for Connecticut, which has some of the richest and poorest neighborhoods in the country, and found that lotto ticket sales are disproportionately concentrated in zip codes with more low-income and minority residents.
A Business Insider analysis of census data, which divided the total income from all the lotteries in a state by the estimated number of residents, found that Massachusetts spends the most on lottery tickets by far, an average of $767 per person in 2016. West Virginia is in second place at $594, and Rhode Island is in third at $513. All that spending adds up to tens of billions of dollars for state governments, which largely goes to education (though it still represents just a tiny fraction of overall state spending).
While probably few would argue that more funding for education is a bad thing, the demographics of regular lottery players are concerning to the games’ opponents. A Bankrate survey found that among households in the lowest income bracket, 28 percent play the lottery once a week, and those seemingly insignificant ticket purchases add up to more than $400 a year — money that could go toward paying off debt or accumulating savings.
The NASPL disputes these findings. Its website links to a 2016 Gallup poll that found lower-income and less educated Americans were less likely to say they had bought a state lottery ticket in the past year — about 40 percent for people with a household income of less than $36,000 per year, versus 56 percent and 53 percent for middle- and high-income people, respectively.
Still, the lottery’s business model relies on a base of regular players. As Les Bernal, an anti-state-sponsored gambling activist, told Pew Charitable Trusts, state-sponsored lotteries rely heavily on super users, “getting up to 70 to 80 percent of their revenue from 10 percent of the people that use the lottery.” The problem is so pervasive that some state lawmakers have even put forth proposals to limit lotteries, or at least restrict new modes of play like credit card sales of tickets and online games.
And even for those rare few whose hopeful ticket purchases actually pay off, their issues might just be beginning.
The “curse” of lottery winners
Stories of lottery winners may inspire envy, but there’s no shortage of schadenfreude either — which brings us to the cottage industry of horrific stories about “cursed” lottery winners.
While curses aren’t real (as far as I know), winning the lottery has historically seemed to precede a string of terrible luck for many otherwise ordinary people. To preface: In a majority of states, lottery winners are legally not allowed to remain anonymous. As Aditi Shrikant wrote for Vox:
Winners must sign the back of the ticket to officially claim it, then contact their state’s lottery commission, which announces the lottery is closed by saying who won. In only eight states — Delaware, Georgia, Kansas, Maryland, North Dakota, Ohio, South Carolina, and Texas — are winners allowed to conceal their names, but even then, they can only stay anonymous below a certain earnings threshold or for a certain time period.
It makes sense from the states’ perspective: Putting a face and a name to that big ol’ pile of money makes it easier for other people to imagine themselves in that lucky person’s shoes, and can thus drive the ticket sales that put money in the state budget. To wit, past winners’ full names, hometowns, and even photos are listed right on the Powerball and Mega Millions websites.
But this also means that winner is now low-grade famous — and a potential target for robbery, kidnapping, scam artists, and even murder.
There was Abraham Shakespeare, who won $31 million in 2006 and whose body was found in 2010 concealed under a concrete slab; and Jeffrey Dampier, who after he won $20 million was kidnapped and then shot in the head by his sister-in-law and her boyfriend; and Urooj Khan, who dropped dead the day after winning a comparatively tame $1 million and was later found to have been poisoned by cyanide.
Perhaps the most widely reported tale of woe is that of Jack Whittaker, a kindly West Virginia man who became somewhat of a folk hero in his state after winning $314 million in 2002. As April Witt wrote for the Washington Post Magazine in 2005, Whittaker’s seeming stroke of good luck destroyed his life: He was robbed and sued multiple times, he got a DUI, his business and his marriage fell apart, and his granddaughter Brandi died less than two years later from a drug overdose.
And this isn’t even to touch on the more straightforward issue of financial mismanagement. Per the National Endowment for Financial Education, 70 percent of lottery winners end up bankrupt in just a few years. As Jim Shagawat, a financial adviser with Windfall Wealth Advisors, told me, this could be attributed to the fact that “a lot of lottery winners simply don’t have life experience having a lot of money. They do things like give away too much to family and friends, or have scam artists take advantage of them, or they get a feeling like this money’s unlimited and start spending it all.”
Low-income people living paycheck to paycheck — again, the people who are most likely to play the lottery regularly — may not have much experience with investment or savings. “If you’re a trust fund baby, you’re kinda taught about the team of advisers you need” to manage your money, Shagawat told me. Many of us might be able to handle smaller sums but aren’t equipped to deal with, say a windfall of $15 million. “All of a sudden, the way you did things just won’t work anymore.”
Don McNay, a financial adviser and the author of Life Lessons From the Lottery, put it even more bluntly. “The money just overwhelms them,” he told the New York Times’s Joe Nocera in 2012 of lottery winners. “It just causes them to lose their sense of values.”
Gaming the odds
Given that the chance of winning the kind of jackpot that can turn you into an overnight millionaire is infinitesimally small — you’re statistically far more likely to be struck by lightning or guess every single team in your Sweet 16 March Madness bracket correctly — it’s perhaps not surprising that there’s a long history of people trying to hack the lottery, sometimes quite literally.
HuffPost’s Highline tells the story of a couple in their 60s who made nearly $27 million over nine years via games in their home state of Michigan because the husband noticed a flaw in the games’ rules. Their tactic: bulk-buying tickets, thousands at a time, to ensure the odds were in their favor, basically turning playing the lottery into a full-time job. They soon began traveling regularly to play a similar game in Massachusetts, where a group of MIT students had figured out the same thing simultaneously.
The two competing parties’ large bets in the game, called Cash WinFall, eventually triggered an investigation by a Boston Globe reporter and turned into a national scandal; the state lottery commission went on to suspend the licenses of several stores that had sold tickets to the two groups and then announced it would phase out Cash WinFall entirely.
There was also a woman with a PhD in statistics from Stanford who won the Texas lottery four times in 10 years to the tune of nearly $20 million (and who, unlike the MIT and Michigan players, has not been forthcoming about her methods).
Stefan Mandel, a Romanian economist living in Australia, won not only the $27 million jackpot but also $900,000 in additional prizes by systematically buying up every possible number combination in the Virginia lottery. As Zachary Crockett wrote for the Hustle, Mandel was subject to investigation by 14 law enforcement agencies but ultimately found not guilty of wrongdoing; Crockett writes that “in his home country of Australia, he became something of a folk hero: A widely-circulated cartoon depicted him as a kangaroo hopping out of the US with a pouch full of cash.”
And in 2017, PennLive published a whole investigative series on the surprisingly high number of lottery players who’ve won multiple times — too many times to be statistically plausible (though there’s not yet hard evidence of illegal doings).
Of course, there have been some high-profile cases of straight-up cheating too. There was the infamous “Triple Six Fix” incident of 1980, in which Nick Perry, the announcer of Pennsylvania’s “Daily Number” game, cooked up a plot to weight the ping-pong balls used in the drawing to ensure his victory. Aided by the lottery’s “shockingly lax” security, Perry pulled it off, winning $1.8 million with the portentous drawing of “666” — but officials were immediately suspicious and launched an investigation that ended in a criminal conviction for Perry.
Perhaps the biggest lottery scam in the US was orchestrated by a programmer named Eddie Tipton in what’s now known as the “Hot Lotto fraud scandal.” As the New York Times explains, Tipton worked for the Multi-State Lottery Association as a security employee and figured out how to game the lottery via inserting fraudulent code into the random number generator machine to game the system in lotteries across multiple states. Across the long-running scam, he got friends and family members to collect the winning tickets, and eventually was busted after trying to collect a $16.5 million ticket in 2010. Tipton was sentenced to 25 years in prison in 2017 (though he could get out on parole much earlier).
While Americans may enjoy a good grifter story, those who game the lottery don’t seem to inspire the same grudging admiration — perhaps because the odds are so long to begin with that for those who do play by the rules, it feels a lot more personal when someone profits by flouting them. HuffPost’s Jason Fagone put it well: “Even if the lottery is a shitty deal and a sucker’s bet, at least everyone who plays is getting the same shitty deal.”
Still, even the wild improbability of winning and the stories of some occasional bad actors is apparently not enough to dissuade many people with a couple of dollars in their pocket and a misty dream in their heart. After all, this weekend’s Powerball jackpot is already up again, to nearly $500 million. As the fraudster Nick Perry’s lottery catchphrase used to go, “If you’ve got it, come and get it; if not, better luck tomorrow.”
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