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State Lotto Winners: Beware!

Updated on December 8, 2017
William F. Torpey profile image

Graduated NYU 1964. Worked in NYC in public relations 2 years then as reporter/news editor 32 years at The Hour newspapers. Retired in 2000.

Is It All That They Expected?

Among the biggest Jackpot winners
Among the biggest Jackpot winners | Source

If you're ever lucky enough to win the Connecticut Lotto, don't quit your day job yet, or at least until you check the bottom line on your bank account.

When the big prize is advertised at $1 million -- or even $5 million or $8 million -- Lotto officials are well aware of the fact that these figures do not inspire maximum participation (you can read that as heavy betting.)

Really big numbers, like $35 million or $50 million, result in much higher Lotto sales and higher "profits" for the state.

That's why the state uses a bit of legerdemain in its Lotto promotions, and that's why it would be smart for anyone who wins the top prize to find out how much money he really won before making any unusually large expenditures.

Occasionally -- and reluctantly -- the state mentions that the big Lotto prize actually reflects the value of a 20-year annuity, not the amount of cash won, as advertised.

A few people who buy Lotto tickets realize what the difference is between, let's say, a $10 million prize and a $10 million annuity -- but I dare say most people who buy tickets with dreams of becoming a millionaire do not.

The difference is enormous. With an annuity, winners would receive $500,000 a year for 20 years, but this amount turns out to be far less after Uncle Sam and the state of Connecticut take out their taxes on your moderately improved income.

If you truly won $10 million -- that is, you were handed a check for that amount when you won -- you, of course, would have a big tax bill, but you would be free to invest the balance over the next 20 years in a way that could very well earn you double or triple the initial amount.

Even if you similarly invested the meager amount you got from the annuity, you could not do half as well because each year the money you receive has one less year to build capital gains, interest or dividends.

This is not the first time the state has bent the rules. A few years ago when it decided to end the $3 payoff to ticket holders who had three of the six numbers, I personally complained to the governor, attorney general and Lotto officials.

Tickets sold by the state showed odds reflecting the $3 payoff when the state had no intention of making those payments. State officials tried to justify this error by saying they were saving money by using up the old tickets -- and (that) they sent out press releases to Lotto outlets.

Do you suppose the state would allow a private organization to misrepresent the odds -- or interest or dividends, whatever -- under similar circumstances?

The state, however, is not alone in abusing its power for its own convenience and interests. The federal government allowed banks to do virtually the same thing when the tax-deductible Individual Retirement Accounts (IRA's) were created some years ago.

Financial institutions (who knew, or should have known, better) took out big ads saying the annual contributions of $2,000 a year until retirement would grow to more than $1 million for most people.

It's always unwise of government, or anyone, to exert power simply because it has the ability to do so. Such action inevitably leads to the eventual erosion of power. True, lasting power emanates from the consent of the governed; it need never be applied.

I wrote this column as a "My View" for The Hour newspaper of Norwalk, Conn., on April 11, 1998. I now write my views on a wide variety of topics on HubPages.

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    • Lotto Maniacs profile image

      Lotto Maniacs 

      9 years ago

      I think a certain Hubber is about to get into the lotto business! Heh! Seriously, this is a great hub. I learned a new thing here. Basically you can't technically ever have a franchise with the Philippine Lottery. Only an Agent. Bummer. But it is good to know! Well done! Great Hub! Cheers, Fehl. Rating up!!

    • William F. Torpey profile imageAUTHOR

      William F Torpey 

      10 years ago from South Valley Stream, N.Y.

      The government is merely taking advantage of the hopes and dreams of the poor and middle class. It's not much different than a tax.

    • profile image


      10 years ago

      Lotteries are a main attraction of the middle or lower income groups and by engaging these tears into lottery the government earns from them. That is why these lotteries are called optional taxes and fool’s tax. The ratio of people participating in these lotteries would be a lot less if they knew about the reality of these lotteries.

    • William F. Torpey profile imageAUTHOR

      William F Torpey 

      11 years ago from South Valley Stream, N.Y.

      The odds on lottery tickets are so high, compu-smart, that I always say I have the same chance to win without a ticket as you do if you buy a dozen tickets or more -- that is, virtually no chance at all. Lottery officials should have more prizes rather than one huge prize, in my opinion.

    • compu-smart profile image


      11 years ago from London UK

      I used to alwasy buy a lottery ticket every week end and by the evening after the lottery was drawn, i was nothing but a loser! again! and all i was left with was an expensive kitty toy!!

    • William F. Torpey profile imageAUTHOR

      William F Torpey 

      11 years ago from South Valley Stream, N.Y.

      Thanks, Agro Donkey. All my 110 hubs thus far are newspaper columns I wrote before retiring in June 2000, except for the one I did on my cousin titled, "Michael Torpey, Operratic Tenor, Classical Vocalist." I have two or three dozen more columns to turn into hubs before I can get to several that I'm anxious to get under way. I hope you'll take a look at someof those I've already published -- and I hope you enjoy them.

    • profile image

      Agro Donkey 

      11 years ago from Ohio

      Wow! What a great hub. Hope to see more from you in he future

    • William F. Torpey profile imageAUTHOR

      William F Torpey 

      11 years ago from South Valley Stream, N.Y.

      I have trouble enough trying to win an 8 to 1 bet at the track, ColdWarBaby. I could buy a million tickets and still not stand a chance to win the Lotto!

    • profile image


      11 years ago

      Don't forget: "You've got to be in it to win it!"

    • William F. Torpey profile imageAUTHOR

      William F Torpey 

      11 years ago from South Valley Stream, N.Y.

      Don't give up hope, Bob. As they say in those unethical junk mails we all get, "You may already be a winner!"

    • profile image


      11 years ago

      Bill , I sure as heck don't have to worry about this one. The best I can ever do is to get a $2.00 winner.

    • William F. Torpey profile imageAUTHOR

      William F Torpey 

      11 years ago from South Valley Stream, N.Y.

      Thank you, Donna. You can be sure if the big guys can get away with it, they'll do it every time.

    • donnaleemason profile image


      11 years ago from North Dakota, USA

      Excellent William. It is only the big people who can bend or twist the rules, us children just have to obey them.


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