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January 16, 2014

Lottery privacy bill an early loser in Indiana

Big winnings still equal big publicity

INDIANAPOLIS — If you won millions in the Hoosier Lottery, would you want to keep it secret?

That’s the question an Indiana lawmaker was hoping his colleagues would consider with a bill that would give lottery winners the choice of anonymity, with the goal of helping them protect their sudden fortunes from scam artists, unscrupulous financial planners and greedy relatives.

“You wouldn’t believe the people who come out of the woodwork when they hear someone has come into a large sum of money,” said state Sen. Brent Waltz, R-Greenwood, who filed the bill  to grant lottery winners privacy.

His legislation hasn’t been scheduled for a hearing, though, and likely won’t be. The chairman of the Senate Public Policy Committee, Sen. Ron Alting, R-Lafayette, has signaled he won’t hear the bill this during this year’s short session, essentially killing it. Alting declined to say why.

Waltz seems undeterred and pledged to file the bill again next year. He wants Indiana to join the six states that currently allow lottery winners to keep their identities secret from the public.

It’s an issues arising other states: In recent months, lawmakers in Michigan, New Jersey and Pennsylvania have pushed measures to protect winners’ privacy.

In some states, lottery officials object to closing off public access to winners’ names, arguing that the publicity gained from announcing winners helps drive sales. They also contend that releasing winners’ names reduces suspicion that the games are fixed to benefit insiders.

State lottery officials in Indiana declined to comment publicly on Waltz’s proposal. Hoosier Lottery spokeswoman Stephanie McFarland said lottery officials would comply with whatever legislative changes may come.

Under current law, the Hoosier Lottery collects information from those who win $600 or more. Winners are required to complete a claim form, some of which is considered public record, including the winner’s name, hometown and the place where the lucky ticket was purchased.

The Hoosier Lottery posts names and photos of big winners online, along with personal stories of how winners may spend their fortunes. Big winners are featured at lottery press conferences, where reporters can ask questions and take photos.

Under Waltz’s bill, the state lottery commission would have been forbidden from identifying or publicizing a winner without written consent. It would also have prohibited the commission from paying the winner to publicize their name or image.

Don McNay, a Kentucky-based financial adviser who works with people who come into sudden money, says Waltz’s proposal is good idea.

“People who win a lot of money in the lottery need to stay quiet, get their lives organized and get the help they need to make wise financial decisions,” said McNay.

Plenty don’t. The vast majority of big-money winners wind up broke within five years, said McNay, who authored the e-book, “Life Lessons from the Lottery.”

“The money just overwhelms them,” he said. “It just causes them to lose their sense of values.”

And that makes them vulnerable.

McNay cites the story of Jack Whittaker, a West Virginia businessman who won a $315 million Powerball jackpot a decade ago. When Whittaker showed up at a strip club, someone drugged his drink and took nearly $600,000 in cash from his car.

“He might not have been out of the $600,000 had nobody known who he was,” said McNay.

He also cites Florida lottery winner Abraham Shakespeare, who ended up dead after winning a $30 million jackpot. His body was found under a concrete slab at the home of his financial planner’s boyfriend. She’d befriended him after seeing him appear at a lottery press conference.

“He’s the poster child for keeping lottery winners’ names anonymous,” McNay said.  

In January, Chuck Strutt, executive director of the Multi-State Lottery Association, which oversees Powerball and Mega-Millions, told an Associated Press reporter that disclosure laws ensure a transparent process.

Waltz said he understands the need to assure the public that lottery officials aren’t cheating. “But I think we have plenty of oversight mechanisms already in place to ensure that doesn’t happen,” he said.

Some people have found ways to partially skirt Indiana’s disclosure rules.

In 2012, an elderly Shelbyville woman who won $16 million hired an attorney to help protect her privacy. He set up a limited liability company on her behalf. The upfront payment was made to the company, not the winner. And it was her attorney who showed up at the press conference.

— Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com. Follow her on Twitter @MaureenHayden

 

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