Do All Lottery Winners End Up Broke? Here's What We Know

OPEN any newspaper or news website and after a while you'll start to read stories about lottery losers. You'll be hounded by stories of winners who have fallen on the scrapheap and are desperately in debt after two years (which seems to be a common period for wins of up to $10 million).

And everyone is interested in the high-flyers public fall. One of the top posts from the Business Insider has an amazing 1.7 million views (above), and is entitled "19 Lottery Winners Who Blew It All.

This shows the level of interest in the easy-come easy-go money crowd.

It seems there's no end to the number of winners who manage to dig themselves a big money pit and never get out.

But is this really true? Do all winners eventually lose their millions and go back to the dole queue?

$15 million winner Michael Carroll spent all his UK National Lottery jackpot in 8 years and was hoping to get a job as a garbage collector. AP

There's a lot of speculation but no official answers. So I decided to scratch the surface and prove it one way or another.

What I did was remarkably simple - and unscientific, since there's not much statistics around to get any firm ideas. Here's how I went about it...

I figured since many big-money losers are fodder for the news organisations, pretty much every big lotto winner who crashed would appear on the net somewhere.

So I googled terms like these:

lottery loss, lottery winners crash ,unlucky lottery winners, unluckiest lottery winners, true tales lottery winners, unlucky lottery stories, lottery winners broke, lottery winners who lost their millions

I searched the first 10 pages in each phrase, restricted them by date and removed duplicates. There are a LOT of duplicate items covering each losing lottery winner, so that took a little time.

Then I looked up the number of lotteries that regularly paid out $1 million and more, as well as those who paid more once a week. I used the Lotto Life blog's GAMES section to find these.

Gayle Zolaturiuk won $30 million in a 2013 Lotto 649 jackpot, but hasn't appeared
in our losing figures column yet. Photo: Shan Qiao, newswire

I found approximately 90 weekly games round the English-speaking world.

Now to do the figures:

  • Total lotteries which paid out over $1 million per year: 4,680
  • Stories about broke players over the same year: 270

That means almost 6% of all lottery winners have gone broke in the last year.

While that's much higher than people who go broke for other reasons (.03% for the USA for 2013), we must remember lottery winners are usually people who are not used to handling large sums of money, nor used to getting advice from financial experts.

So the story is played out differently for them.

Overall, there are a lot less broke winners than you would expect from the blaring headlines.

It's important you don't believe everything you read, but examine it with a bit of common sense.

The lottery is one of life's most extraordinary opportunities, giving the biggest windfall for the smallest amount of money.

And it's big business. In 2012 USA lottery sales were over 78 billion dollars. Canadian sales reached CAN $9.3 billion.

So don't waste time wondering about the possible problems - get involved.

And as always, remember to take the right advice when you win so you don't fall into the common traps.

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