Former state lottery director reveals his secrets and advice for playing lotto
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In this podcast with former state lottery director, Terry Rich, host Timothy Schultz went behind the scenes in many areas of the lottery that most of the public never see.
As someone with extensive experience in the world of lotteries, Terry gave some valuable insights and advice for lottery players.
He discusses his experience of giving away $1 billion in prizes and shares tips for lottery players. He also talks about how Mega Millions and Powerball work and why the jackpots keep getting bigger. Terry Rich wrote two books: "The $80 Billion Gamble" and "Dare to Dream, Dare to Act."
Winning the lottery can be a life-altering experience, and these tips can help players make the most of their game. Here’s a summary of a five-minute segment in the video edited for clarity:
Terry said “I quickly learned to play with my head, not above it, whether you're engaging in lottery games or any form of gambling.”
“Allocate a specific amount of money and label it as your ‘entertainment fund.’ Enjoy spending it, but avoid dipping back into your pockets if you experience losses. It's fun to play; it's exhilarating to dream of hitting it big with Powerball and Mega Millions, or whether you enjoy scratch-off tickets, designate a fixed budget. If you win, consider it a win, even if it's a small one.”
Terry says that he follows this approach himself. “For instance, if I have fifty dollars, I purchase ten of the same five-dollar tickets. While I might win one, I'm unlikely to recoup my initial investment, given the odds. Nevertheless, it's satisfying to strut around saying, "I won."
“If I do win a bit, I resist the temptation to immediately reinvest another $50. Play responsibly, designate it as entertainment money, and savor the experience, whether you're at the craps table, playing the lottery, or participating in Powerball.”
He added that another approach is to use "pop money." On average, lotteries have a profit margin of 20-25%, as per their game structure. In practical terms, if you spend a hundred dollars on lottery tickets, you can expect around 65-70 dollars in returns, considering that lotteries also compensate stores and distribute other prizes.
Winning is not guaranteed, but when it does happen, he said it's undeniably enjoyable.
As we've witnessed in recent years, lottery and gaming institutions experienced a surge in participation when additional funds became available. People contemplated how to invest these funds, often shying away from the stock market.
“Remember, gambling your life savings on the lottery is not advisable. Stick to what you can comfortably afford to lose, treating it as entertainment rather than a guaranteed financial solution.”
And, he explained, should you not win, avoid the temptation to play more out of necessity, such as covering your child's tuition. It's critical to have a plan.
“I've mentioned my approach to scratch-off tickets and Powerball, but once you do hit that significant jackpot, you face a crucial second decision: how to preserve your wealth for the long term, ensuring your family's financial security.”
This is why Terry strongly recommends seeking the guidance of a financial advisor. The average person who wins the lottery lacks the knowledge and background to manage such a windfall effectively.
“Therefore, early engagement with a financial advisor is one of my top recommendations, particularly if you lack financial expertise prior to your win. Don't gamble with your newfound fortune.”
He explains more:
What's the significance of avoiding the trap of chasing losses in lottery games?
Terry Rich: Chasing losses is a common pitfall in gambling, and it's essential to avoid this behavior in lottery games. If you don't win, resist the temptation to keep investing more money, thinking you'll recover your losses. Lottery games are meant to be enjoyable, not a source of desperation. Once you've reached your budget, it's time to stop, ensuring that your financial situation remains secure.
How can diversifying entertainment choices benefit lottery players?
Terry Rich: Diversifying your entertainment choices is a practical strategy. While lotteries can be exciting, it's unwise to rely solely on them for enjoyment. Engaging in other activities and hobbies allows you to maintain the joy of playing the lottery without feeling financial pressure. This balance enhances your overall quality of life.
Could you explain the concept of "pop money" and how it can help lottery players?
Terry Rich: "Pop money" is a designated amount set aside for lottery games or entertainment. It's a strategy to ensure that you don't overindulge in gambling. Once your "pop money" is spent, refrain from dipping into your regular budget to continue playing. This practice helps you maintain financial discipline and enjoy the lottery responsibly.
Why is it essential for lottery players to understand the odds of winning?
Terry Rich: Understanding the odds of winning is critical to having realistic expectations. On average, lotteries pay out around 65-70% of ticket sales, which means that the odds of winning substantial prizes are relatively low. Players should engage in lottery games for fun rather than as a guaranteed investment. Keeping the entertainment factor in mind can enhance the experience.
Why do you recommend seeking financial guidance for lottery winners?
Terry Rich: Many lottery winners lack the financial expertise to manage substantial sums wisely. That's why I strongly recommend seeking financial advice when you win a significant amount. Financial advisors can help you make sound investments, plan for your future, and ensure that you safeguard your newfound wealth effectively. They play a crucial role in maximizing your winnings and maintaining financial security.
What's the importance of having a well-thought-out plan to manage lottery winnings?
Terry Rich: Once you win the lottery, you'll face a second important decision: how to manage your winnings. Having a well-thought-out plan is crucial for ensuring financial security for yourself and your family. This plan should include strategies for investments, budgeting, and long-term financial stability, making your newfound wealth a lasting benefit rather than a fleeting windfall.
These are the subjects and timestamps covered in this podcast:
1:12 What does it feel like to award lottery prizes?
2:43 Lottery winner reactions
4:54 Claiming lottery wins publicly
6:18 People coming out of the woodwork
7:12 Financial advisors & taxes
9:43 Jackpots rising
12:29 Beginning of Powerball and Mega Millions
14:00 Lottery ticket prices and higher jackpots
15:32 Adding ball combinations
18:08 $2 billion lottery delay
25:16 Thoughts on lottery scams
27:56 Cracking the largest lottery fraud in history
37:31 Eddie Tipton prosecuted and fraud cases
41:58 Advice for lottery players
45:36 Magnifying personalities lottery winners
47:49 Advice to achieve your dreams
51:23 Quick pick vs. Choose Your Own. Cash vs. Annuity
53:54 Memorable lottery wins
57:47 Do lottery officials know who won?
59:22 Odd-defying lottery wins and credibility
1:01:36 Terry Rich’s closing thoughts and advice
About Timothy Schultz
Timothy Schultz is a podcaster and Youtuber with Bullhead Entertainment, LLC. In 1999, he won the Powerball before going back to college to study broadcast news and work on various productions. He’s now combining his experience to launch this podcast, Lottery, Dreams and Fortune.
