What happens if you win the lottery?

You look down to your ticket, and back to the numbers. Has it really happened? Yes, you’ve won! You’ve won the lottery! What now?

Your first thought may be about what you will put the money towards, and depending on the value of the win, there could be quite a bit to go around. This Thursday’s Powerball comes with an eye-watering $120 million top prize, which could become an all-time record payout if there’s just one division one winner, according to Australia’s Official Lottery provider, the Lott.

What can you expect to happen if you find that your ticket happens to hold the same numbers flashing on the screen? And how can you claim your prize?

It could be a wise idea to keep in mind the odds are stacked against entrants winning a major prize in the first place. All lotteries are a form of gambling, as they are games based on chance. On average, if you buy just one game of Powerball, the chance of winning Division One (by matching seven winning numbers and also getting the separately drawn Powerball number) would be just one in 134,490,400, according to The Lott. It says up to half of Australian adults are expected to have an entry into the draw on Thursday 24 February, so you’re certainly not alone if you’ve bought a ticket in the hope of winning big.

What happens after you win the lotto?

That depends on how and where you bought your ticket. The Lott runs a number of lotteries across Australia, including Gold Lotto, Oz Lotto, and Powerball. A spokesperson for The Lott says what happens depends if you have registered your ticket.

Registered ticket

• Division One or Two or a large prize: The company will contact you by phone. If your prize is more than $40 million, the Lott says someone will call you immediately after the draw to step you through the prize claim process. If you’ve won less $40 million, you’ll need to wait until the next business day for that all-important call.
• Smaller win: The company will contact you via email.

Unregistered ticket

Options include:

• Go back to the place where you bought their ticket.
• Visit your nearest The Lott sales outlet (such as a newsagent).
• Go to one of The Lott’s offices.
• By post: The Lott says it’s also possible to claim the prize by post.

How long do I have to claim a lotto win?

How long you have to claim a prize after a lotto win depends on where you live and what type of ticket you purchased. The Lott says that each state and territory has its own rules and deadlines around how long a winner has to claim a prize, ranging from six months to seven years.

How does it feel to win the lotto?

If you are lucky enough to get the call that you’ve won big, international lottery aggregator Lottoland suggests that your first reaction is likely to be shock “of a magnitude you have never felt before”. “Shock comes first, then joy, but also nerves and fear, a sense of the unknown, and sadness, mixed in for no apparent reason,” the spokesperson said.

That certainly seemed to be the case with a Sydney mum who won more than $100 million in January, 2019. When The Lott phoned her to tell her of the win, this is how the conversation went:

1. First, disbelief: “I don’t believe it, is this a trick?”
2. Then shock: “Wait – are you telling me I’ve won $107 million?! Oh my God! That is just so much money!”
3. Then logic: “ I just don’t understand how this lucky ticket has won me $107 million!”
4. And then, as the initial shock subsided, a plan formed: “I’ll be giving to my favourite charity… a whole slab of money!”

The Lott said it had been a sleepless night for the SA winner of a Powerball draw that occurred in July 2019 , a young man from Adelaide. He had also scored Division Two 19 times, to take his total winnings to $37,602,912.27. The Lott said the man, when called by the company, said: “Wow,” after a moment of stunned silence. “Thank you so much! That is incredible. I can’t believe that. I am shaking so much.” He said his first thought was to take his family on a holiday, perhaps a ’round-the-world trip. “I’ll also pay off my family’s mortgages and donate heaps to charity,” he was quoted by The Lott as saying. He then added that he couldn’t wait to get off the phone so he could tell his family about the win.

There’s scientific evidence that many lottery winners don’t make rash decisions in the wake of their fortunes changing. For instance, a study published in the Journal of Gambling Studies and focusing on a group of 261 Norwegian winners found that “emotional reactions to winning were few, aside from moderate happiness and relief”. It found instead of going on a spending spree, winners “emphasized caution” and “emotional control”, “paying debts and sharing with children”.

“There was only a slight increase in economic spending,” the study’s authors stated. “A wish for anonymity was frequent, together with fear of envy from others. Experiences with winning were predominantly positive. Life quality was stable or had improved.”

It could be a wise idea to seek professional and independent financial advice if you win the lottery.

Would you quit your job if you won the lottery?

A 2019 Sydney winner who won more than $107 million said she wouldn’t quit her day job anytime soon. She told The Lott that she loved her job in healthcare. It seems she’s not alone in that attitude. A study published in The Journal of Psychology found that how much a person wins, and how much they love their job, can significantly impact a winner’s decision to stay employed. A different study, about the Swedish lottery, published in the University of Nevada, Las Vegas’ Gaming Research and Review Journal, found that after their fortunes changed, less than 12% of winners quit their jobs. Winners were more likely to change the hours they worked, the study found, with 24% taking unpaid full-time leave and 16% changing the hours they regularly worked. Surprisingly, the majority – 62% – stayed in a full-time job.

“Large windfalls do not generally undermine lottery winners’ willingness to get an income from work,” the study found. “However, the size of the winnings had a substantial impact on people’s decisions to take unpaid full-time leave and to reduce working hours.”

Research also suggests that it can be a wise choice to consider the long-term impacts of winning on a person’s income.  A study published in the American Economic Review found that “unearned income reduces labour earnings”, meaning it reduces the amount of money coming into a household that is earned through paid work. That might be OK if you win really big and can live off your investments, but it could potentially be a significant problem if the money is not enough to support you over a long period of time. The study also found that the winners surveyed only saved about 16% of their prize pool, on average.

It’s a good idea, Lottoland suggests, to get quality financial advice “before making any large announcements” about the win. Large and unexpected wins can change many aspects of a person’s life, and may require changes to wills and other legal documents and arrangements.

The Lott states that “many winners chose to let the emotional dust settle by putting their money into a long-term deposit while they formulate a plan on how to use it wisely”.

“Part of that plan usually involves seeking out financial advice to ensure the prize will have a long-term positive impact on the lives of the winner and their loved ones.”

Does winning the lottery make you happier?

How much money a person wins seems to have an impact on how happy the windfall makes them in the long run. A British study of people who collected medium-sized lottery wins (of between £1,000 and £120,000) found that winning money may actually make you happy – or at least happier than you were going to be without the win. The study, published in the Journal of Health Economics, found that when compared to people who didn’t win any money, those who did win showed “significantly better psychological health” two years after the win. However, that’s not always the case, the study said.

A warning: The downside of playing the lottery is risk

Playing the lottery is a form of gambling, and that can come with a wide range of risks – including the potential for gambling addiction. The Australian Government’s Health Direct website says that the signs of a gambling addiction may include:

• feeling a constant need to gamble with more money, more often
• repeated unsuccessful attempts to stop gambling
• using gambling as a coping mechanism to deal with anxiety or depression, or
• lying to cover up your behaviour around gambling.

If you feel you may need help with your gambling behaviour, contact Lifeline by phoning 13 11 14, or call the Gambling Help service on 1800 858 858.