Record jackpot winner claims prize in Arizona
Winner opts to take cash, $192.5 million, before taxes
The second Powerball ticket holder in last month's record jackpot has come forward to claim winnings worth nearly $200 million before taxes, the Arizona Lottery said Friday.
"It is difficult to express just how thankful we are for this wonderful gift," said the winner, a married man in his 30s whom the lottery said it would not identify publicly, at his request. "We are extremely grateful and feel fortunate to now have an increased ability to support our charities and causes. Obviously, this has been incredibly overwhelming, and we have always cherished our privacy."
The message directed reporters to the law firm Rhoads & Sinon LLP in Harrisburg, Pennsylvania, which did not immediately return a call on Friday night.
The winner lives in Fountain Hills, northeast of Phoenix, said Karen Bach, director of budget, communications and products at the Arizona Lottery. He and his wife relocated there about a year ago from Pennsylvania and had played Powerball in Arizona only twice, she said.
The $587.6 million jackpot from the November 28 drawing had a cash option of $384.7 million before taxes. The Arizona winner has opted to take cash, $192.5 million, before taxes.
On the day of the drawing, he went to 4 Sons Food Store in Fountain Hills, "handed the clerk a $20 bill and he said, 'I'd like 10 in Quick Pick Powerball tickets,'" she told reporters. "The retailer tried to encourage him to spend the entire $20 and he said, 'No, $10 is all I want to spend.' Clearly, that was enough."
He left his ticket overnight on the sun visor in his vehicle and retrieved it the next day, after he and his wife heard there had been a winner in Arizona. Then they compared the numbers on the ticket against those posted on the lottery website, she said.
"They checked the numbers over and over again and were just absolutely shocked," Bach said.
Since then, the couple has assembled a legal and financial team to guide them through the process and began meeting with them on Monday, going so far as to use a whiteboard to write down how they wanted to allocate their newfound assets, Bach said. Columns on the whiteboard included entries for financial, legal and "fun," she said.
The couple opted to claim the prize before the end of the year "because of concerns over the fiscal cliff in 2013," she said.
The winnings are to be awarded on about December 14, said Jeff Hatch-Miller, executive director of the Arizona Lottery. Hatch-Miller, who met Friday morning with the winner in a hotel suite in Scottsdale, said the winner likes what he does and has no immediate plans to change it.
"The winner said, 'You know, I like my job; I'd like to continue working my job,'" Hatch-Miller said. He described the man's work as "just a regular job, like yours or mine -- it's not a high-level job."
The winner's anonymity is not likely to last. A spokeswoman for the Arizona Lottery, Cindy Esquer, said it would release his name on Monday to news organizations that file Freedom of Information Act requests for it.
Two winners from Missouri claimed their half of the jackpot on November 30.
The prize is considered income by the IRS, meaning that the highest federal tax rate of 35% will apply. Each winner would therefore owe $67 million to the IRS, said Mark Luscombe, principal analyst at tax research firm CCH, in an interview last month.
State taxes will also apply.
In Arizona, a resident who has the winning ticket will be charged a 5% tax on the prize money. If a non-resident bought the winning ticket, a 6% rate will apply. The resulting tax bill will be either $10 million or $11 million, according to CCH.
Missouri charges residents and non-residents a 4% tax, making the tax liability there nearly $8 million.
Taking both state and federal taxes into consideration means the Arizona winner would owe up to $78 million in taxes and take home $114 million. The Missouri winner's tax bill would total about $75 million, leaving a take of $117.5 million.
However, in either case, the amount paid in state taxes could likely be deducted on the winners' federal tax returns, lowering the overall tax liability slightly.
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