Powerball winner: Should lottery winners remain anonymous?

Powerball winner in South Carolina has chosen to remain anonymous. Only six states allow lottery winners to remain anonymous. Is that a good idea?

A South Carolina man who won the Powerball lottery last week has chosen to collect his winnings anonymously. According to NBC, the man "danced around his kitchen and initially told only his dog."  

His ticket to the fourth-largest jackpot in Powerball history is worth up to $399.4 million, depending on whether he collects it as a lump sum or a 30-year annuity.  Much like other lottery players in 44 participating states and the District of Columbia, this winner bought 10 $2 tickets from a gas station near Columbia, S.C. The gas station will receive a $50,000 bonus for having made the sale, and the state will receive $15 million in tax revenue.

As news outlets waited for the winner to come forward, NBC published advice for big lottery winners: Lawyer up, take the lump sum, take a deep breath – and stay anonymous if you can.

But South Carolina is one of only six states, according to Huffington Post, which allow winners to remain anonymous: Delaware, Kansas, Maryland, North Dakota, and Ohio are the other five.

Some states, such as Colorado, Connecticut, and Vermont, allow lottery winners to keep their names private if they claim winnings through a trust or a limited liability company.

A January Associated Press story describes why other states' lotteries have resisted similar policies:

Lotteries object, arguing that publicizing the winners' names drives sales and that having their names released ensures that people know there isn't something fishy afoot, like a game rigged so a lottery insider wins. When players see that an actual person won, "it has a much greater impact than when they might read that the lottery paid a big prize to an anonymous player," said Andi Brancato, director of public relations for the Michigan state lottery.

Lawmakers in both Michigan and New Jersey have unsuccessfully proposed laws to protect the privacy of winners who, they argue, are "prone to falling victim to scams, shady businesses, greedy distant family members and violent criminals looking to shake them down," the AP story said.

New York state Sen. George Maziarz introduced legislation earlier this year to give lottery winners anonymity. Similarly, Senator Maziarz argued that "public disclosure of a lottery winner's identifying information ... can make the winner a target of criminal activity. This can include burglary, kidnapping, harassment, fraudulent lawsuits, etc." That bill is before the New York Senate Racing, Gaming & Wagering Committee, and a companion bill has been introduced in the Assembly by Assemblywoman Aileen Gunther.

In 2011, Harvard Business School professor Michael Norton described to CNN how winning a lottery jackpot can change relationships:

"When you become the rich person, who other people look to, it can actually erode the social bond that you have with people because it changes your relationship from friendship into almost like a transaction."

CNN lists several painful and even deadly stories about the fallout from lottery winnings. Earlier this year, a Chicago man allegedly died of cyanide poisoning the day after collecting $425,000, and no arrests have been made. Jack Whittaker, a West Virginia man, suffered a string of widely publicized personal calamities after publicly winning a $314 million Powerball jackpot in 2002.

The National Endowment for Financial Education cautions those who receive a financial windfall – whether from lottery winnings, divorce settlements, cashed-out stock options, or family inheritances – to plan for their psychological needs as well as their financial strategies. The Denver-based nonprofit estimates that as many as 70 percent of people who land sudden windfalls lose that money within several years.

Most participating states use their cut of the Powerball lottery to fund public education, and some argue that these jackpots must be subject to open-records law, just like any other public funds. "If we don't let people know people are winning, then that raises questions," Katy Smith, a spokeswoman for the Oklahoma Lottery, told USA Today.

Powerball is a nationwide game sold by participating state lotteries and organized by the nonprofit Multi-State Lottery Association.