Lottery Winners Who Reportedly Got Ripped Off By The System

Can you imagine the thrill of winning the lottery, of seeing all of your numbers coming in and knowing you are now made for life? Sure, there is that flawed statistic out there that says 70% of lottery winners end up bankrupt within a few years of winning, and there are several reasons why winning the lottery might actually suck — but who says things have to go that way for you? With your winning ticket grasped firmly in your clammy hand, its time to fantasize about huge houses, fast cars, and a life of travel, decadence, and luxury (here's what not to do if you do in fact win the lottery).

But the truth is that even when your numbers come in, it doesn't guarantee that you will receive the jackpot you've been promised. Lotteries are big business, and any scheme involving huge sums of money tends to be regulated by a huge number of checks and balances, guidelines, and systems to ensure the games aren't open to abuse by cheats, fraudsters, or insiders looking to line their own pockets. And sometimes, these systems can work against the supposedly lucky winners, plunging them into financial turmoil as they attempt to chase the winnings they believe themselves to be entitled to. Here are four cases in which lottery winners allegedly got ripped off by the system.

As mentioned earlier, lottery winners have an unexpectedly high chance of ending up broke after they strike it rich, especially if they receive their millions in a lump sum, which can make it far more difficult to manage if you don't have the necessary financial experience. So wouldn't it be better to receive a smaller, still-significant amount regularly, ensuring that you're set for life even if you do manage to inadvertently blow your wad?

That's what reportedly happened to Oregonian John Wyllie, who, back in 2012, won the life-changing prize of $5,000 a week for life after winning a lottery organized by Publishers Clearing House. Actually, the prize took the form of an annual check of $260,000, allowing him to make some major purchases and set himself up for a more-than-comfortable retirement.

But disaster struck for Wyllie in 2025, when payment of his prize money stopped abruptly. Publishers Clearing House had filed for bankruptcy, and they had stopped paying out to 10 winners who had been told they were set for life. Wyllie has been told he now has to fight for his prize money by making a claim to the bankruptcy estate, but there is little chance of receiving anything as the money simply isn't there.

Back in the old days, you would have to drive to the store for lottery tickets, filling in a selection slip by hand and taking it to the register so they could print your chosen numbers onto a ticket. Today, it's easier than ever to buy lottery tickets, and you can secure your numbers for the next draw in seconds with just a few taps on your phone.

But while modern technology has made playing the lottery more convenient than ever, it can lead to unforeseen trouble for some unlucky winners who find themselves facing an uphill struggle to get their hands on their winnings. Texan woman Kristen Moriarty bought her winning ticket, worth more than $83 million, for a Lotto Texas draw in February 2025. However, it was reported that the lottery commission refused to pay the money out as she had bought the ticket through an online "courier," which was now facing two investigations into its operations.

Moriarty sued for her winnings, and it has since been agreed that she will receive $46 million of the prize money. It is still a life-changing amount, but it is little over half of what she believed she was due to receive.

Iowa man Larry Dawson must have been over the moon when he realized his lottery ticket was a winner, scooping him around $9 million in a multi-state lottery in 2011. Little did he know, however, that he should have been awarded significantly more than that, and that it would lead to a legal battle that would last for several years.

Dawson had won his prize through the Multi-State Lottery Association, which, it turned out, was for years allegedly being exploited by its fraudulent security chief, Eddie Tipson, who, while working on the inside, filtered prize money toward his group of criminal associates. In 2016, when the crimes happening at the association came to light, Dawson sued. He argued that, were the lottery in question not undermined by fraud, his prize money would have been bigger. In the end, Dawson and the association reached a settlement, with the winner receiving an additional $1.5 million. Tipson received a 25-year prison sentence for his crimes in 2017.

Benjamin Franklin famously said that "nothing is certain except death and taxes," and for Ohioan lottery winner Roy Thomas, the taxation on his 1992 lottery winnings was certainly more than he bargained for. The lottery draw in which he won took place on December 12 that year, and Thomas found himself on the receiving end of a $9 million jackpot.

You wouldn't expect to have any complaints after finding yourself receiving a windfall like that. But for Thomas and his wife Eloise, their prize wasn't quite satisfactory. As court filings later made clear, the couple was forced to wait six weeks for the State of Ohio to process the payment, and they received it at the end of January 1993.

But in that time, the laws around the taxation of lottery winnings had changed. Indeed, the rate of taxation jumped significantly at the turn of the year, from 20% to 28%, meaning that the Thomases were stripped of an additional 8% of their winnings. Legal wrangling continued throughout the 1990s, but the couple was unable to find a legal justification for a refund. Still, it could have been worse: they might have been one of these lottery winners who lost everything.