Why Some Lottery Winners Lose It All (and Regret Winning) — What the Research Actually Says
Why Some Lottery Winners Lose It All (and Regret Winning) — What the Research Actually Says
The story is so familiar it feels like a law of nature: someone wins millions, spends wildly, trusts the wrong people, and ends up broke and miserable. It's true that some winners lose everything. But the most famous statistic about it is likely a myth, and the real research tells a more nuanced — and more useful — story.
The "70% Go Broke" Statistic Has No Reliable Source
You've probably seen the claim that around 70% of lottery winners go broke within a few years. It appears in articles, videos, and financial advice columns everywhere. The problem: nobody has been able to trace it to a solid study.
The claim has often been attributed to the National Endowment for Financial Education (NEFE), but NEFE has publicly stated that it did not produce research supporting that figure.
We call this a zombie statistic: a number repeated so often that it survives long after its source disappears. The real picture is worth understanding, because the risks for winners are real — they just aren't a fixed percentage.
What Research Actually Found
The Florida bankruptcy study
In 2011, economists Scott Hankins, Mark Hoekstra, and Paige Marie Skiba published a study of Florida lottery winners. They compared people who won large prizes, between $50,000 and $150,000, with people who won small prizes under $10,000.
Their finding was striking: big winners were not less likely to declare bankruptcy several years later than small winners. The large prizes appeared to delay financial trouble rather than prevent it for people already on a fragile path.
It's important to note what this study covered: mid-sized prizes, not giant jackpots, and a specific population. It doesn't prove that most jackpot winners go broke. It suggests that a windfall alone doesn't fix underlying financial habits or circumstances.
The Swedish wellbeing study
A 2020 study by economists Erik Lindqvist, Robert Östling, and David Cesarini examined Swedish lottery winners over many years and found that large winners reported higher long-term life satisfaction. Winning didn't commonly ruin people's lives; for many, it improved them.
Together, these studies suggest the truth sits between the myths: winning doesn't guarantee disaster or happiness — circumstances and decisions do.
How Some Winners Lost It All
The widely reported stories of winners who lost fortunes tend to share a few patterns.
1. Spending faster than the money could last
Even huge sums disappear quickly with multiple houses, cars, private travel, and generous gifts — especially when ongoing costs like property taxes, maintenance, and staff are added.
Example: David Lee Edwards won a $27 million Powerball jackpot in Kentucky in 2001. He was widely reported to have spent heavily on homes, cars, and a private jet, and to have run out of money within a few years.
2. Lack of professional guidance
Winners who don't build a team of qualified advisors can struggle with taxes, investments, and legal protection.
3. Gambling or risky investments
Some winners try to multiply their winnings through gambling or high-risk ventures.
Example: Evelyn Adams, who won the New Jersey Lottery twice in 1985 and 1986, was widely reported to have lost most of her winnings, partly through gambling.
4. Pressure from others
Family requests, friends in need, lawsuits, and scams can drain a fortune and damage relationships.
Example: Jack Whittaker, a West Virginia businessman who won a $314.9 million Powerball jackpot in 2002, was widely reported in the years that followed to have faced thefts, lawsuits, and deep personal tragedies. His story is often cited as an example of how sudden wealth can bring intense, unwanted attention.
5. Youth and inexperience
Very young winners may have little experience managing money.
Example: Michael Carroll, who won £9.7 million in the UK National Lottery in 2002 at age 19, was widely reported to have spent much of it within a decade.
Why Some Winners Regretted Winning
Losing money isn't the only reason some winners have said they wished they'd never won. Reported regrets tend to involve:
- Broken relationships. Money can change how friends and family behave.
- Loss of privacy. Public winners can be flooded with requests and attention.
- Loss of purpose. Quitting work and routine can leave people adrift.
- Constant suspicion. Some winners describe struggling to trust new friendships.
We call this the windfall identity gap: the distance between who someone was before winning and the new identity others suddenly project onto them. The money arrives overnight; adjusting to the new identity can take years.
What the Winners Who Did Well Tend to Do
The research and many winner accounts point to similar habits:
| Habit | Why it helps |
|---|---|
| Staying anonymous where possible | Reduces requests and scams |
| Hiring an attorney, tax professional, and fiduciary advisor | Avoids costly errors |
| Waiting months before big purchases | Prevents impulse decisions |
| Setting clear rules for gifts | Protects relationships |
| Keeping some structure or purpose | Maintains wellbeing |
For a practical timeline, read What to Do After Winning the Lottery.
Key Takeaways
- The widely repeated claim that 70% of lottery winners go broke has no reliable source.
- A 2011 study of Florida winners found that prizes of $50,000 to $150,000 delayed, rather than prevented, bankruptcy for many recipients.
- A 2020 Swedish study found that large winners reported higher life satisfaction for years afterward.
- Winners who lost fortunes often overspent, lacked professional advice, gambled, or faced heavy pressure from others.
- Regret usually centered on relationships, privacy, and loss of purpose rather than money alone.
- Privacy, professional guidance, and slow decision-making are the habits most associated with better outcomes.
Quick Answers
Do 70% of lottery winners go broke?
There's no reliable evidence for that figure. The "70%" claim has been widely repeated and often attributed to the National Endowment for Financial Education, but the organization has said it did not produce research supporting it. Research on winners shows mixed outcomes rather than a fixed percentage.
Why do some lottery winners lose all their money?
Winners who lose everything commonly spend faster than their fortune can sustain, lack professional advice, make risky investments or gamble, face heavy pressure and requests from others, or struggle with scams and lawsuits. A sudden windfall doesn't automatically change existing financial habits.
Are lottery winners happier?
Research suggests many are. A 2020 study of Swedish lottery winners found that large winners reported higher life satisfaction for years afterward. Winning doesn't prevent problems, but the idea that most winners end up miserable isn't supported by the best available evidence.
Where Lottery Winner Stories Are Heading
Sensational "cursed winner" stories have dominated coverage for decades. Our prediction: as more rigorous long-term research becomes available and more states allow winners to remain anonymous, the public narrative will shift from "the lottery curse" toward a more accurate picture — that most outcomes depend on privacy, planning, and support, not on the win itself.