anonymity and lottery winnings

Anonymity of Maryland Lottery Winners Hangs on Thin Legal Reed

By Martin B. King

The $1.5 billion Powerball jackpot won by three persons on January 9, 2016 caused a lot of discussion about how a lottery winner can remain anonymous in the face of a financial windfall. There are good reasons for a winner to want anonymity, especially personal safety concerns – most recently the Georgia lottery winner of $434,000 who was murdered in a home invasion on January 21, 2016.

The winners who split the Powerball jackpot are from California, Tennessee, and Florida. None of these states have a statute or regulation that authorizes anonymity for the winner of a lottery. Had one of the tickets been bought in Maryland, the winner’s identity could have remained anonymous.

Maryland is one of the states known for providing anonymity to lottery winners. There were several Multi-Match jackpots in Maryland in 2015 — $3.6 million in the June 8 drawing claimed by a Pasadena resident, and $625,000 in the June 29 drawing won by a Cambridge resident. Both of those winners chose to remain anonymous. The largest Multi-Match jackpot was $4.8 million in 2009, claimed by two anonymous Dundalk residents.

However, the legal basis for this anonymity in Maryland is thin. The Maryland Lottery does not advertise that lottery winners may remain anonymous, but it posts articles on its website about winners and notes those winners who have “chosen to remain anonymous:”

The winner, a federal government worker who lives in Fawn Grove, purchases his weekly tickets during his commute. His regular stop is at 7-Eleven #32909 at 6930 Aviation Boulevard in Glen Burnie. The York County resident has played Powerball since the game began and buys tickets from Maryland retailers solely because this state allows him to claim prizes anonymously.

-Power Play Paves the Way for Player’s $250,000 Powerball Payday, February 23rd, 2016.

What happens if a member of the public seeks to compel the Lottery Commission to disclose the name of a winner of a lottery jackpot? No statutory provision in the Maryland Code and no regulation in the Code of Maryland Regulations explicitly addresses anonymity for lottery winners, one way or the other. The answer is found in a 1995 memorandum written by a very good attorney, Jack Schwartz, who was then Chief Counsel for Opinions and Advice in the Maryland Attorney General’s Office.

The legal basis for anonymity for winners of lottery tickets bought in Maryland is found in the interpretation of an exemption for personal financial information from the general policy that the public is entitled to have access to governmental records and information.

Md. Code Ann., General Provisions Art., Section 4-103. A government custodian may deny inspection of a public record only for specific reasons, one of which is that inspection would be contrary to a state statute. Section 4-336 of the General Provisions Article, requires denial of inspection of the part of a public record that contains information about the finances of an individual:

[A] custodian shall deny inspection of the part of a public record that contains information about the finances of an individual, including assets, income, liabilities, net worth, bank balances, financial history or activities or credit worthiness.
Id. § 4-336.

The reasoning for this interpretation is set forth in the Schwartz memorandum. Winning the lottery results from an individual’s private financial activity that is not related to any financial transaction between an individual and the State of Maryland. More specifically, the lottery prize is not the result of a contract with Maryland in which a person is getting paid for goods and services rendered to the State. Instead, a lottery jackpot results from the decision by the gambler to buy a lottery ticket rather than engage in some other gambling venture. This is a personal spending decision entitled to confidentiality. Cf. Attorney General Opinion No. 85-011 (April 15, 1985) (unpublished).

The concern with Maryland’s grant of anonymity is not that it is bad public policy or that it is an incorrect interpretation of the financial information exception in Section 4-336. The concern is the lack of statutory authority for such a widely-known policy of the Maryland Lottery Agency and the Commission that is relied on, especially by out-of-state purchasers. The Schwartz memorandum is not an official opinion of the Attorney General and, therefore, not entitled to be “given great consideration” by the courts. See Chesek v. Jones, 406 Md. 446, 463 (2008). As to the advice of a mere “Assistant” Attorney General, the Maryland Court of Appeals has stated “we are not bound by it, nor do we afford it any enhanced weight.” Patterson Park Public Charter School, Inc. v. Baltimore Teachers Union, 399 Md. 174, 206 (2007).

The statute creating the Maryland Lottery and Gambling Control Agency has a perfect place for a provision providing anonymity for winners – Section 9-122 of the State Government Article (“Regulation of Prizes and Payments”). Or it could be at least placed in the Code of Maryland Regulations — COMAR 36.02.06.11 (“Payment of a Lottery Prize”).

Other states handle the issue of anonymity for lottery winners in a variety of ways. Delaware, Kansas, and North Dakota have statutes that allow lottery winners to remain anonymous. Del. Code Ann. tit. 29, § 4818; Kan. Stat. Ann. § 74-8720(i); N.D. Cent. Code Ann. § 53-12.1-11d. Arizona has a statute that provides anonymity to a lottery winner for 90 days after the prize is claimed. Ariz. Rev. Stat. Ann. § 5-573A. Colorado, Connecticut, Massachusetts, Ohio, and Vermont permit the awarding of a prize to a trust which would allow a trustee to claim the prize rather than the actual winner. See e.g., Ohio Rev. Code Ann. § 3770.07(A)(1). South Carolina protects the anonymity of a winner as a matter of Lottery Board policy based on its statutory discretion to prevent an unreasonable invasion of privacy and adopted in May 2014 as a response to a freedom of information request for a winner’s identity. S.C. Code Ann. § 30-4-40.

A few state legislatures have taken up anonymity for lottery winners but have not been able to enact a statute. For example, in 2013, the Governor of New Jersey vetoed a bill that delayed disclosure of the identity of a lottery winner for one year. The stated reason for the veto was that announcing who won the jackpot promotes the lottery and any delay in the announcement would interfere with marketing and promotion. Legislation that would delay disclosure of the identity of the winner is being considered in Pennsylvania and Texas.

Is there a case against anonymity for lottery winners? Withholding the identity of the actual winner of a lottery prize could encourage and/or facilitate fraud and criminal activity whereby someone other than the real winner could claim the prize. Just the mere possibility of this occurring could erode public confidence and participation in state and national lottery games. The policy behind these arguments is that lotteries should handle payment of prize money in a completely open manner to promote public confidence, lottery participation, and honest government.

The anonymity provided to winners of lottery tickets sold in Maryland is an attractive incentive for out-of-state purchasers to buy Maryland and national lottery tickets in Maryland. Enacting a Maryland statute or regulation explicitly giving anonymity would provide a solid basis for purchasers’ reliance on Maryland as a safer place to buy a lottery ticket.