Recently, 3 people won the Mega Millions $600 + million lottery jackpot. In Maryland and Kansas, the winners have chosen to remain anonymous due to a state law that allows lottery winners to decide whether they want their names revealed to the public.
While there are some privacy concerns that would justify a rule of anonymity for lottery winners at the state level, I believe that other concerns make lottery anonymity laws bad public policy.
There are a couple of reasons that states have anonymity laws for winners. The first could be the general respect for privacy. No doubt, Americans cherish their privacy, and there is a huge risk of losing a good portion of that privacy if the media can publish your name as a big lottery winner. All of a sudden, relatives all the way from Timbuktu come running to ask for money, more businesses want to sell you their stuff, and you will be approached by the media or others for various reasons. This certainly dictates towards having anonymity laws.
A second rather weak justification would be security concerns. If you win tens of millions of dollars, you could become the target of certain criminals, such as extortionists or even kidnappers. However, this is always part of being rich, and there is no especially high degree of crime victims that are rich as opposed to those that are poor. This is partly true because even dumb criminals know rich people keep their money in the bank, not hidden under a mattress in their home.
If not for competing concerns, though, a lottery anonymity law could easily be justified based on the above reasons. But there is a very good reason not to provide anonymity to lottery winners in places like Maryland and Kansas. The answer can be found in loads of lawsuits that have been filed across the country – lottery pools.
A lottery pool is a group of people who pool their money together to buy multiple tickets under the agreement that they will split any winnings based on the percentage of total tickets purchased by each member of the pool. For example, let’s say 3 McDonald’s workers form a pool. Person A buys 3 tickets, Person B buys 3 tickets, and Person C buys 14 tickets. But only Person A goes to the store next door on lunch break to buy the tickets for everybody. If the tickets win $100, Person A is supposed to win $15. Person B would also win $15, but Person C would win the remaining $70 because he contributed 70%.
The problem that arises is that Person A can just disappear with the money. Of course, he can do this with or without an anonymity law. But when there is no anonymity, at least the other participants in the lottery pool can find out that they won.
With an anonymity law, the participants would have to confirm through other means that Person A cashed in a winning lottery ticket and took the loot.
It is common knowledge that lottery pools take place all over the country. And they increase dramatically as the jackpot increases. It is also common knowledge that courts have upheld these oral agreements when one participant tries to keep all the money.
As a matter of respect for private contracts, states should not have an anonymity law for lottery winners. A law need not give the home address or other details of a winner. A simple name would be sufficient to put potential lottery winners on notice that they may be getting ripped off. This reduces the level of threat to privacy to a reasonable degree while also putting pool participants on notice that the ticket buyer in their pool won the lottery.