The Curse of the Lottery Winner: Fact or Fiction?

Everyone dreams of winning the lottery, it is not something only casino goers or sports betting enthusiasts do. All you do is buy a lottery ticket, enter your numbers, and then they all magically drop at the draw. You are suddenly a millionaire, and have more than enough money to live the high life.

So what do you do? Take an extended holiday, possibly quit your job, buy a new car, maybe even a new house. But winning that sum of money is not without its unwelcome difficulties. The curse of the lottery winner will kick in, and suddenly you get all those discomforts. Relatives pop up out of the blue for their piece of the pie, your neighbors awkwardly start cosying up to you, and people in general start treating you differently. Without proper money management and discipline, those millions can disappear a lot quicker than they should.

Winning the Lottery: How Your Life Can Get Worse

Coming into a lot of wealth from one second to the next is daunting to say the least. The amount you win is impossible to comprehend at first. And another important factor is that this is money that has seemingly come out of nowhere. You haven’t snowballed proceeds from slot machines or used a martingale strategy at roulette. There was no progress or steady building to reach the jackpot. It is a complete fluke, and your chances of winning are next to nothing. Though when the stars do align and you win, that ticket that cost you something like $2 is nothing in comparison to the grand prize.

So there is no preparation for the jackpot prize, and it is not something anyone expects to happen. In baccarat, you can calculate forwards and try to make a bankroll or betting system to accommodate the fluctuation of wins and losses. In lottery games, you buy a ticket and let fate, kismet, or the powers from above do the rest.

One of the biggest fallacies of lottery winners is thinking that the grand prize will never run out. They have never held so much money in their hands, and it is unfathomable to think the money can disappear. And yet it does. In the US, a study showed 70% of lottery winners end up entirely broke.

Examples of the Lottery Winner’s Curse

Lottery winner William Post hit the big time, winning $16.2 million in the Pennsylvania lottery in 1998. His life was about to take a violent twist, as a girlfriend sued him and his own brother hired a hit man to kill William. He sunk money into the family business, and then ended up a million in debt. William Post also spent time in jail for shooting at a bill collector.

Billie Bob Harrell Jr won $31 million in Texas in 1997. He became an overnight millionaire and wanted to share his good fortune with family and friends. He gave money generously and spent it in buckets. Ultimately, his wife left him, he was burdened with financial responsibilities, and then took his own life less than 2 years after his win.

Jack Whittaker won a $314.9 million Powerball, the biggest at the time. He spent his money without any care or concern, handing out to everyone from the local churches to the strip clubs. But then tragedy struck. His granddaughter died, under suspicious drug-related circumstances, his wife left him, his house burned down, and he was sued by Caesars Atlantic City.

The list could go on, and on. It is quite phenomenal how such large sums of money can dry up so quickly. The most likely causes for the financial draining are:

• Donating money
• Investing in family/friends businesses
• Theft
• Disregarding tax
• Spending money on luxury items

Of course, the financial stresses can easily create mental health or psychological issues. Especially for winners who have never had any kind of financial responsibility. Or, those who have unhealthy or naive understandings of how money works.

Psychology of Too Much Wealth Too Quickly

Sudden wealth is bound to change the way we think, and most of the impacts are not positive. It can alter the way you interact with others, induce unnatural levels of paranoia or superstition, and leave individuals feeling isolated. All of your old ways of thinking are suddenly challenged and you don’t know how to manage the newfound wealth.

You want to make the most of your money, working it to bring pleasure, comforts, and enrich your life. But behind the vast sums of money there is a tremendous responsibility. The first things that cross a lottery winner’s mind are possibly travel, luxury goods, new homes, and pampering themselves. But they should be: taxes, security and creating a roadmap for how they can sustain their wealth.

It is hard though. Because this is not money you worked hard for and slowly built up. Therefore, it is difficult to appreciate just how large the jackpot win is. So you won’t hold onto that money as hard as you do your monthly paychecks. No, this is money that can be used for endless temptation and creature comforts.

Are Lottery Winners Doomed?

The statistics don’t bode well for lottery winners, as there are so many precedents of winners going broke, running afoul of the law, and even taking their own lives. But no, lottery winners are not cursed. The lucky winners who do end up worse off are victims of circumstance, and most often don’t have the right money management skills.

There are also positive stories of lotto winners who used the money wisely and set themselves up for life. Or, those who donated the proceeds to charities and didn’t let the wealth go to their head. Not all lottery winners end up destroying their lives, or ending up back at square one. It is an opportunity, and if they find a way to integrate the newfound wealth into their life successfully, they should have no problems.

We even have the same problems with gamblers. Take Archie Karas, who amassed millions playing cards in the 1990s, but ended up losing it all. There is a possibility of a gambler’s conceit, in which these gamblers or lottery winners underestimate the value of the win. Or, a destructive urge to keep playing. They end up chasing their losses or spending/playing til they go bust.

Money Management and Handling Wealth

Anyone who wins a major jackpot or huge sum of money has to be careful. Due to the dramatic sum of money offered in lotteries and their publicity, lottery winners are vulnerable to many lifestyle changes. They should prioritise getting security, lawyers, and financial planners to ensure the money doesn’t end up ruining them.

Casino gamers must also be wary of the dangers that jackpots can pose. They won’t have the same publicity, and the sums of money don’t the be as exaggerated as the lottery. However, gamblers have other threats. Namely, in that they feel compelled to keep playing, and see if they can build on their momentous win. The gambler’s conceit and other cognitive biases can come into play. Even those who have quit may feel tempted to try again and test lady luck. So for gamblers, learning when to quit and walk away with the win is vital.

Ultimately, there is no curse that cannot be handled. The dangers and psychological vulnerabilities should not be underestimated. You won’t win the lottery and then solve all your problems in one go. It just gives you a new challenge, where you have to create a new lifestyle and handle much larger financial responsibilities. Otherwise, the downward spiral can have severe effects on your and your loved ones’ lives. Responsibility and caution are advised, and getting professional help is always the best answer if you need guidance.