How lottery winners lose it all, and the people who prove it happens
You have heard of lottery winners going broke, someone bringing up a stat that 70% of them lose everything within a few years. That number is actually folklore. The financial-education group it is often credited to has said it cannot find the source, so treat it as a campfire story.
The real research is more interesting, and in a way more damning. When economists linked 35,000 Florida lottery winners to bankruptcy filings, they found that people who won $50,000 to $150,000 were half as likely to go bankrupt in the first two years, then 50% more likely to go bankrupt three to five years out. The windfall did not prevent financial trouble. It postponed it. About 5.5% of winners filed for bankruptcy within five years regardless.
So the money rarely fixes anything on its own. What sinks winners is rarely bad luck. It is a short list of the same mistakes, and they are worth knowing before the check clears.
How the money disappears
It usually starts with no plan. A winner takes the lump sum, skips the tax attorney and the adviser, and starts spending against a number that feels infinite and is not. Then come the calls. Every relative, old friend and long-lost acquaintance arrives with a need or a can't-miss idea, and a winner without firm boundaries says yes until the pile is gone. Lifestyle inflation does the rest: the house, the cars and the friends who expect the good times to keep flowing all cost money every month, not once.
Two more finish the job. Winners who suddenly fancy themselves investors pour money into businesses and schemes they do not understand, which is exactly why Mark Cuban tells winners not to invest at all. And the ugliest one: sudden wealth attracts predators, from con artists to people willing to do real harm. The winners who keep their money almost always do the opposite of all this, starting by telling almost no one.
Jack Whittaker: $314 million, and he wished he had torn up the ticket
Whittaker won the $314 million Powerball on Christmas 2002, then the largest single jackpot in US history, and he was already a wealthy construction-company owner worth about $17 million. He took the roughly $114 million cash and gave millions to churches and a foundation. Then it unraveled: he was robbed of $545,000 in cash left in his car, ran up gambling debts and bounced a $1.5 million check to a casino, and faced a wave of lawsuits. His granddaughter died of a drug overdose in 2004 and his daughter died in 2009. He later said he wished he had torn the ticket up.
Abraham Shakespeare: $30 million, murdered for what was left
Shakespeare won $30 million in Florida in 2006 and gave away much of it to people who simply asked. When his fortune was nearly gone, a woman named Dorice "DeeDee" Moore inserted herself as his financial manager, then stole what remained and killed him. His body was found buried under a concrete slab in her backyard. Moore was convicted of first-degree murder in 2012 and sentenced to life without parole. It is the darkest version of a common thread: the people who show up once the money does.
David Lee Edwards: $27 million gone in five years
Edwards won a $27 million Powerball share in 2001 and spent it about as fast as a person can, on a mansion, a fleet of cars, a jet, and a spiral of bad investments and drugs. Inside five years the money was gone. He died broke, in hospice, in 2013. His is the plainest case of all, no crime, no villain, just a fortune with no plan behind it.
The winners who keep it
The pattern flips cleanly for the people who hold onto the money. They tell almost no one, hire real advisers before spending anything, weigh the annuity for its built-in discipline, and treat every request for a handout as a decision rather than an obligation. A win can also become contested money in a divorce or family fight, which is one more reason to move slowly and lawyer up early. The full first-week playbook is in what to do if you win a big lottery prize. None of it is complicated. It is just the opposite of what everyone in these stories did.
Sources
Jack Whittaker (lottery winner)
Florida woman found guilty of murdering lottery winner Abraham Shakespeare
Broward Palm Beach New Times: David Lee Edwards, Powerball winner, dies broke in hospice
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Frequently Asked Questions
Do most lottery winners go broke?
Not most, despite the popular "70% go broke" claim, which has no verified source. But a study of 35,000 Florida winners found that larger winners were 50% more likely to file for bankruptcy three to five years after winning than smaller winners. The money tended to postpone financial trouble rather than solve it.
Why do lottery winners lose their money?
Almost always the same handful of reasons: no plan and no professional advice, taking the lump sum and spending it fast, saying yes to every relative and friend who asks, lifestyle inflation, bad investments, and in the worst cases, predators who target the newly rich. Winning does not teach anyone how to manage money.
How can a lottery winner avoid losing it all?
Tell almost no one, hire a tax attorney and a fee-only adviser before spending a dollar, consider the annuity for its built-in discipline, and set firm boundaries with everyone who asks. The winners who kept their fortunes are the ones who treated the win as a responsibility, not a party.
Jessie Jurado is a news writer who covers new scratch-off launches, state lottery guides, taxes on winnings, news, and much more. She joined ScratchCheck in 2026 and writes the site's state-by-state coverage.
