On Jan. 12, Wayne A. Schenk thought he was the luckiest man alive.
A month earlier, he'd been diagnosed with inoperable lung cancer. But on this afternoon, the 51-year-old Marine veteran was hanging out with his buddy Domonick Gallo, enjoying the unseasonably warm weather in their hometown of Naples, N.Y., by indulging a favorite ritual: scratching off lottery tickets.
One of Schenk's $5 High Stakes Blackjack tickets hit it big, winning the $1 million prize. It was more than enough money to pay for the $400,000 in cancer treatments that he desires.
But Schenk's dream-come-true soon turned into a nightmare. When he contacted the New York State Lottery about paying him the money in a lump sum, he learned that the rules of that particular game mandate a payout over 20 years, providing him only $50,000 a year. And he's been given only 12 to 18 months to live.
"Three times we talked to the lottery and they've said that they can't do it," says Schenk, who recently got a brush cut because his hair has started to fall out. "That was more depressing than anything."
Schenk does not have health insurance but as an ex-Marine he's been getting some treatment from the Veteran Affairs hospital in Syracuse, N.Y. "The VA is good but only as good as they can be - they're not up to date on everything and they're a little slow."
Schenk wants to get treated at a cancer center, such as the Eastern Regional Medical Center in Philadelphia. But that facility requires $125,000 up front and $250,000 in reserves for him to get cancer care. He's thought about selling the Orange Inn, a tavern he bought last year, but that would probably take too long and it might not sell for enough money.
Gallo, his buddy, has been working the phones on his behalf, reaching out to hospitals and financial institutions.
"When he won the million dollars — as soon as we calmed down and stopped high-fiving each other — he said, 'Now I can get myself into a cancer hospital and save my life," says Gallo. "Why wouldn't the lottery help him out? They just told him no."
For those of you who get on me because I frequently complain about NY's annuity-only scratch games, this is exactly why I do so. Any bill introduced into legislation to give Mr Schenk the money upfront should apply to ALL lottery winners in NY state. I also think Mr Schenk should try to contact new Gov Eliot Spitzer. This has given the NY Lottery a black eye, just as with Louise Outing with MA Megabucks. NY does have a new lottery director. I seem to be encouraged by him (the NY Lottery took a slight turn towards being more player-friendly with the NY Raffle to Riches, with its 12 top prizes of $1 million lump sum each, even if it wasn't a sellout.)
Notice that the scratch ticket in question says somewhat boldly "win up to $1,000,000" with no hint, not even an asterisk, of the fact it's annuity-only.
A Player needs to know and understand the Rules of the Game they are Playing!
NY Highstakes Blackjack: Jackpot: $50K/Year/20 Years!
NY Highstakes Blackjack
This is too bad, but unfortunately there is no special rule about people who only have a year to live or desperately needing the money to get the money in a lump sum.
It does say something about medical care in this country when even a lottery winner can't afford life saving cancer treatments and the treatment center won't save his life first and then discuss the bill.
If people would vote with their wallets and refuse to buy any lottery game where the grand prize was not available in a lump sum upon request, you can bet states would soon discover they could award a lump check after all.
The NY Lottery does not do a good job of letting players know before buying such tickets that they are annuity-only (only the four versions of LOSE for Life actually do this.) TV and radio advertising leave out the fact that there is no cash option on these games.
Of course, this problem would not happen if NY followed much of the rest of the country in giving players a 60-day window after winning of taking cash in lieu of the annuity.
I hope you are not trying to defend the NY Lottery's refusal to give him a lump sum. We don't need another "AnnuityIsGreat" on LP.
It sounds like Mr Schenk bought these tickets before he was diagnosed, but never read the fine print on the back, which I always tell people to do when they buy such a ticket. I suggest to them to buy the $1 Instant Take Five ticket, or play Mega Millions instead. (NOTE: there is a NY "Mega Money" scratch ticket which is annuity-only in two ways: the top prize on the scratch is 20 installments of 50k, and the MM "free plays" generated by the scratch automatically say "26 ANNUAL PAYMENTS", which is final in NY state.)
US online jackpot games all have a cash option, except of course for MA Megabucks (there are also two "lifetime" online games in the US.) But for some reason a number of scratch games, especially in MA and NY, are still annuity-only, and few people give a dam (except me.) MA and NY are able to get away with this as they are the two most successful US lotteries (not counting video lottery, which NY has.)
Companies which sell annuities to lotteries still have pull, and continue to be able to sway lotteries into sweetheart deals which put them ahead of the player.
As I mentioned, NY has a new lottery director (hired by outgoing Gov Pataki shortly after Eliot Spitzer won the election.) MA also replaced a Republican with a Democrat; I have no idea if MA has a new lottery director, or will get one.
On a personal level, I agree with Cash Only. On a business level, I don't. Although his situation is unique, once you begin making exceptions for an individual, everyone will feel he can file a claim when things don't turn out as planned, including past winners. There might be several winners who chose to sell their annuity because of a family emergency and took the loss. Will they be reimbursed? Rules are rules. I might feel the same way as this man, but I hope he doesn't spend the rest of his life battling the system.
He probably will (spend the remainder of his time trying to get a lump sum.) What does he have to lose?
Several years ago a NY woman "won" 50k a year in 20 installments (not realizing there was no cash option.) She ended up giving the ticket to her son. The NY Lottery covered up by telling the media that she gave the ticket to him as a "birthday present".
i agree with u on this.....
can't he sell the payments for a lump sum to one of those companies that advertise on tv all the time?
He could try, but, again, after taxes, it probably would not be enough.
Would you agree if you were in his shoes? No lottery winner should be forced to receive annuity payments in lieu of a lump sum. This situation probably wouldn't happen in South Carolina.
Yes, but if you look at the story again, it mentions that he will end up with very little. They charge a large chunk of money. Also, he still has to pay the taxes on the entire amount he won.
Cash Only wrote: "He probably will (spend the remainder of his time trying to get a lump sum.) What does he have to lose?"
T I M E
As I said before, I don't blame him one bit. But if it's a losing battle, the stress will just exacerbate his condition. Maybe he should just go on that long fishing trip he talked about when he first won the money and get some peace for a while. On the other hand, if it's that important to him, he shouldn't give up. For some reason I just thought of the movie "Philadelphia" but that was a different situation. Tom Hanks was fired for being Gay & having AIDS. However, if someone has a mission and it means something to him, then I agree that he should continue his fight.
(didn't see your post above...logged at the exact same time!)
If a Lottery Players Knows and Understands the Rules of the Game,
and if that Lottery Player disagrees with the Rules of the Game,
then the Lottery Player should not Play that Game!
... and such is life. Win some, lose some.The beat goes on. Hope it works out well for him.
"They've also been in discussions with several buyout firms, which would pay $467,000 to buy Schenk's ticket. But after taxes, that amount would be reduced by almost half."
What does he think he'll get if he convinces the state to give him a lump sum for a 20 year annuity payout of $1 million? The extra 6 years for a MM annuity payout makes a significant difference compared to the 20 payments, and the MM cash value is only about 58% of the anuity value. If he does get the state to pay him a lump sum, federal law requires that 25% be withheld for taxes, and NY will withhold state taxes, too. If he's lucky he'd net about $350,000, which still leaves him about $25,000 shy of what the hospital wants.
If he takes the buyout from the private firm he'll still owe taxes, but I don't think there's a requirement for withholdings. That would give him over $450,000 to work with, and almost all of what he spends on medical treatment will be tax deductible. It sounds to me like he's probably lucky the only option is annuity.
"It sounds to me like he's probably lucky" there's no cash option...
How can you say that? Mr Scheck probably thought the $1 million was lump sum. I'm sure he knows however that he would be liable for state and federal taxes regardless.
The NY Lottery, if it insists on annuity-only scratch games for those with fixed payouts (as opposed to the "lose for life" variety) should experiment with a $1 million scratch game with two versions with basically the same name. The lower tier prizes and odds of winning each should be the same in both versions; the one difference among the prizes is that the "traditional" version would have a top prize of 50k in 20 installments, while the "lump sum" version would have a top prize that would be paid in cash, equivalent to the present value of 50k in 20 yearly installments. This way there would be an "annuity-only" ticket, but there would be an "identical" game for those who prefer lump sum. The NY Lottery probably would have to print as many of the "cash" tickets as the "annuity" ones.