Only way to truly win lot­tery is not to waste money play­ing

Austin American-Statesman - - BALANCED VIEWS -


nor­mal hu­man be­ings,” said Cindy Hill on Fri­day, mo­ments af­ter she and her hus­band, Mark, posed with an over­sized check for $293,750,000. “We’re com­mon,” she added. “We just have more money.”

The check rep­re­sented their half of the $588 mil­lion Power­ball jack­pot, which the Hills had just won, along with an­other, as yet uniden­ti­fied, win­ner. From the point of view of lot­tery of­fi­cials, you couldn’t ask for more ideal win­ners than the Hills.

Mark works for a meat­pack­ing plant. Cindy is a cler­i­cal worker who was laid off in June 2010. When they were in­tro­duced to the news me­dia last week, their adopted daugh­ter in tow, they talked about how the money might al­low them to adopt an­other child. They in­sisted that the money wouldn’t change them. The only ex­trav­a­gance they men­tioned was a red Ca­maro that Mark wanted. They made win­ning the lot­tery seem down­right heart­warm­ing.

But it’s not. Lotteries may well be the sin­gle most in­sid­i­ous way that state gov­ern­ments raise money. Many of the peo­ple who buy lot­tery tick­ets are poor; they are es­sen­tially a form of re­gres­sive tax­a­tion. The odds against win­ning a big jack­pot are as­tro­nom­i­cal — far worse than the odds at an At­lantic City slot ma­chine. The get-rich-quick mar­ket­ing — by government, let’s not for­get — is of­fen­sive. One New York Power­ball ad shows a pri­vate jet em­bla­zoned with the words, “Kevin’s Air­line.” The tag line read: “Yeah, that kind of rich.”

Oh, and let’s not for­get the fate of the peo­ple who win. Peo­ple who sud­denly fall into ex­treme wealth — whether be­cause of an in­surance set­tle­ment, a pro­fes­sional sports con­tract, or a lot­tery win — rarely know how to han­dle their new cir­cum­stances.

There is, to take one of the most prom­i­nent ex­am­ples, the story of Jack Whit­taker, a West Vir­ginia busi­ness­man who won a $315 mil­lion Power­ball jack­pot in 2002. A decade later, his daugh­ter and grand­daugh­ter had died of drug over­doses, his wife had di­vorced him, and he had been sued numer­ous times. Once, when he was at a strip club, some­one drugged his drink and took $545,000 in cash that had been sit­ting in his car. He later sobbed to re­porters, “I wish I’d torn that ticket up.”

I read about Whit­taker, and a host of other sad sto­ries about lot­tery win­ners, in a re­cent e-book writ­ten by Don Mc­Nay ti­tled, “Life Lessons From the Lot­tery.” Mc­Nay is a fi­nan­cial ad­viser and news­pa­per colum­nist, based in Ken­tucky, whom I’ve got­ten to know over the years. He spe­cial­izes in help­ing peo­ple who have come into sud­den money. He is con­vinced that the ma­jor­ity of peo­ple who win big-money lotteries, like the re­cent Power­ball prize, wind up broke within five years.

“The money just over­whelms them,” he told me the other day. “It just causes them to lose their sense of val­ues.”

It is im­pos­si­ble to know whether the Hills will be able to re­main “nor­mal” once they cash their nine-fig­ure check. Mc­Nay says that those who do the best are the peo­ple who are able to re­main anony­mous, take the money in an­nual in­cre­ments, find a good fi­nan­cial ad­viser who can in­su­late them from all the new friends they are go­ing to have, and spend their money with some real pur­pose in mind.

Based on what they said at the news con­fer­ence, the Hills seem con­scious of the need to get pro­fes­sional fi­nan­cial help. On the other hand, they are any­thing but anony­mous. Like most states, Mis­souri in­sists on show­cas­ing lot­tery win­ners, as it did with the Hills on Fri­day. What bet­ter mar­ket­ing tool for lot­tery of­fi­cials than the win­ners’ happy smiles and that over­sized check? The Hills, alas, have also de­cided to take their money in a lump sum, which, af­ter taxes and a lump­sum dis­count, will amount to $132 mil­lion.

“Power­ball Win­ners Al­ready Di­vorced, Bank­rupt,” read the head­line in the satir­i­cal news­pa­per, The Onion, the day af­ter the win­ning num­bers were an­nounced.

It was a funny story, but it’s no joke.

Fu­eled in part by the success of the first For­mula One race in the Austin area, the own­ers of about 17 acres north of the track are seek­ing to re­zone their prop­erty for a re­tail cen­ter to pro­vide what they say are needed ser­vices in that part of South­east Travis County.

Ca Dozo: There goes the neigh­bor­hood ...

Tim McMullen: That’s what we need, more new com­mer­cial and re­tail projects. Then the rich can get richer while the rest of us suf­fer.

Dave Cortez: In­ter­est­ing how it takes a race­track to bring needed ser­vices to an area that’s been ne­glected for years.

Michael McCown: As a res­i­dent of the area, we are in need of many things, but more McDon­alds isn’t the an­swer. We need gro­cery stores for

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