Mega Millions

The S.C. Education Lottery posted a reminder on Twitter last week that April 19 is the deadline for the winner of the $1.537 billion Mega Millions to claim the grand prize. File/Staff

South Carolina's $1.5 billion Mega Millions mystery is shaping up to be a missed opportunity of staggering proportions. Either that or a masterstroke of savvy financial planning.

With an April 19 deadline on the horizon, the fate of the unclaimed winning lottery ticket sold at a Simpsonville convenience store four months ago and counting has tongues wagging in the Upstate and beyond.

The speculation ranges from, “Is it lost?” to “Is the person who bought it in jail — or dead?”

Financial experts typically advise big-dollar lottery recipients to avoid rushing in to claim their money, partly in the hope that the media frenzy will die down over time.

If that's the end-game, it's clearly backfired in this case — even in a state where winners can remain anonymous. The unclaimed 10-figure grand prize is gaining national interest as the 180-day redemption window draws closer and closer to slamming shut.

Last week, NBC's "Today" show was among the latest major media outlets to cover the story.

"It's hard to believe someone is waiting 'til the last minute," exclaimed "Today" co-anchor and South Carolina native Craig Melvin.

It's also difficult to fathom the ancillary wealth the winner has left on the table by not putting the money to work sooner.

A lump-sum cash payout would be cut to about $491 million after the obligatory state and federal taxes are backed out, according to one estimate. That would be enough to return a tidy $33,600 in interest a day, or more than $12 million annually, if it was invested in U.S. government-backed 1-year Treasury notes on Jan. 1.

While that's hardly an insignificant sum, a short-term financial sacrifice could pay off in the long run, said Greg McBride, senior vice president and chief analyst at Bankrate Inc.

"The lost income is basically a rounding error in the context of how life-changing a big lottery win is," he said last week.

McBride, like most financial experts, favors measured restraint over immediate gratification under such extraordinary circumstances.

"The counter-argument is that with any jackpot winnings — particularly one of this magnitude — the best thing to do is take time to get your ducks in a row and to assemble a team of estate lawyers, tax attorneys, accountants and financial planners," he said. "And it's the value derived from going into this armed with a team of professionals that far offsets the 'opportunity costs' of any lost investment income in the interim."

In South Carolina, this waiting game already has created a $50 million dilemma for government budget planners. If the winner fails to come forward, the roughly $61 million tax windfall the state would have pocketed will shrivel to about $11 million after Mega Millions officials split up the jackpot and redistribute it around the country.

A decision about how much of the future lottery proceeds will be included in the budget for the next fiscal year will likely be made by mid-March. 

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“We’re starting to get nervous about whether that $61 million is realistic,” Frank Rainwater, director of the S.C. Revenue and Fiscal Affairs Office, told lawmakers in Columbia earlier this month.

Also on edge is C.J. Patel, whose KC Mart in Simpsonville spit out the winning ticket. He'll collect $50,000 if the prize is claimed — zilch if it isn't.

The S.C. Education Lottery is standing by, eager to award its biggest-ever payout to some would-be gazillionaire whose life and family tree will be changed for generations to come.

"Once we're ready, we let them know and they transfer the funds," spokeswoman Holli Armstrong said, referring to Mega Millions.

She declined to guess as to why the ticket hasn't been redeemed. 

"We haven't heard anything from a winner," Armstrong said Wednesday. "Honestly, we have no idea."

Meanwhile, the original $1.537 billion prize from Oct. 23 sits in a trust account at U.S. Bank, doing what money does. The principal balance has racked up interest of more than $4.3 million, otherwise known as a rounding error.

Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott