CASH GRAB Gone Wrong: Player Wins $2 Million, Then Loses Over $655,000 Instantly
According to The Sun, A Maryland lottery player recently lost a substantial amount of their winnings after scoring a $2 million scratch-off prize earlier this month.
Winning Ticket Purchased at Local Supermarket
Maryland Lottery officials confirmed that the lucky ticket was purchased for the 200X The Cash game at a Giant Food supermarket in Owings Mills, approximately 20 miles northwest of downtown Baltimore. Fortunately, the player promptly came forward to claim their winnings.
Quick Claim Window for Lottery Winners
Maryland has one of the shortest claim windows for lottery tickets in the United States, allowing just 182 days from the drawing date for winners to collect their prizes. Since the anonymous player’s win exceeded $25,000, they were required to make an in-person appointment at the Maryland Lottery Claim Center in Baltimore to claim their cash, as outlined by the Maryland State Archives. This process included signing the back of the ticket to confirm the win.
The Dilemma of Collecting Lottery Winnings
One of the most challenging decisions for lottery winners is how to collect their funds. Winners can choose between receiving the entire amount as a one-time lump sum or spreading it out over several years through annuity payments.
Experts and lawyers debate which option is better.
Pros and Cons of Payment Options
- Annuity Payments: This option provides a steady income stream and can help mitigate tax implications. It also reduces the risk of making impulsive financial decisions. However, once the choice is made for annuity payments, it is locked in and cannot be altered.
- Lump Sum: Taking the lump sum gives winners immediate access to all their funds, allowing them to invest and create a consistent income. However, this option comes with significant tax consequences.
It is highly recommended that winners consult a financial advisor and lawyer to ensure they make the best decisions regarding their newfound wealth.
$2 Million Winner Chooses Lump Sum
Most lottery players opt for the lump sum, and the $2 million winner in Maryland followed suit. However, this decision also means facing hefty taxes.
Tax Implications
The federal government imposes a 24% tax on lottery winnings above $5,000, while individual states set their own rates. In Maryland, the state tax rate is 8.75% for residents. As a result, the $2 million winner had approximately $655,000 deducted in taxes before receiving any cash.
After taxes, the winner walked away with roughly $1.34 million—a significant return on their $30 investment for the ticket.
Similar Cases Highlight Tax Challenges
Another Maryland player experienced a similar scenario this spring, winning $50,000 and losing $16,475 immediately due to taxes.
