What happens to winners
The best study of winners' financial outcomes found something more precise and more interesting than the folklore: cash transfers delayed bankruptcy by a few years rather than preventing it.
If you want to know what happens to lottery winners financially, there is one study to read: Scott Hankins, Mark Hoekstra and Paige Marta Skiba, The Ticket to Easy Street? The Financial Consequences of Winning the Lottery, published in the Review of Economics and Statistics, volume 93, issue 3 (2011), pages 961–969.
Most claims about winners come from journalists collecting memorable stories — a method guaranteed to find spectacular failures and miss quiet successes.
This study did the opposite. The authors matched Florida lottery winners against bankruptcy filings, and — crucially — compared large winners with small winners rather than with the general public.
That comparison is what makes the result credible. People who buy lottery tickets differ from people who do not, in income, risk appetite and financial circumstances, so comparing winners to non-players confounds the effect of the money with the characteristics of players. But among people who already won something, the size of the prize is essentially random. Comparing $50,000–$150,000 winners with small winners isolates the effect of the money itself.
Winners of $50,000 to $150,000 were:
The net effect over five years was approximately a wash. The money changed the timing of bankruptcy, not whether it happened.
The authors also found that large winners who did eventually file had similar net assets and unsecured debt to small winners who filed. The windfall had not left them in a structurally better position by the time they reached court — the money had been absorbed.
The paper's own summary is blunt: such transfers only postpone bankruptcy rather than prevent it.
It does not say most winners go bankrupt. The study is about the relationship between prize size and bankruptcy timing among winners, not a claim that winners commonly go broke. Anyone citing it to support the 70% myth is misreading it — and that myth has been disavowed by the organisation it was attributed to anyway.
It does say a windfall is not a solution to financial distress. This is the genuinely important result and it generalises well beyond lotteries. Giving a financially stressed household $100,000 buys a few years, then the underlying situation reasserts itself. If income does not cover outgoings, a lump sum postpones the arithmetic rather than fixing it.
It concerns mid-size prizes. $50,000–$150,000 is life-improving, not life-changing. The paper cannot tell you what happens to nine-figure jackpot winners, because there are too few of them for statistical work. That limitation is inherent to the subject: the outcomes people are most curious about are the ones with the smallest sample.
The financial picture is not the whole picture, and the other well-designed studies point in a more positive direction:
Taken together: a large win tends to make winners durably more satisfied, somewhat less inclined to work, and — if they were already in financial trouble at a mid-size prize level — solvent for a couple of extra years rather than permanently.
If a windfall arrives and there is an underlying cashflow problem, the money is not the answer unless it is used to change the cashflow. That is the entire content of this study, and it is why every serious piece of advice for new winners begins with structure rather than spending — see the first 72 hours.
For what a lottery habit costs over time in the far more likely scenario where you do not win, see the lifetime spend calculator and the invest-instead calculator.
Last verified: 2026-08-29