Watching a contestant win on a game show lifts the hearts of viewers, and can change the winner's life. However, these "lucky" contestants' lives might not change in the glamorous ways you'd expect, as there are some troubling reasons why you don't want to win on a game show.
While savvy shoppers may long for the day they'll get to appear on The Price Is Right, the realities of winning are often a bitter pill to swallow. After the wonderful on-air memories have faded, winners are often saddled with secretly terrible game show prizes. The same winnings that once appeared bright, shiny, and essential can suddenly become a major burden once the contestants return to reality.Â
Even if the prize ends up being exactly what was advertised, there are still financial obligations and logistical details to attend to, and the demands can often feel overwhelming. Once they've tasted victory, few contestants are left to wonder why it's the worst to win on game shows. Those who aren't yet aware should stick to watching from the comfort of their own homes; they'll probably walk away with more money in their pockets.Â
When watching a game show from home, it's easy to assume that winners drive their new cars right off the set once the lights come up. Unfortunately, the reality of the situation is starkly different; first of all, winners are required to pay taxes on the prizes they win. The government views money won on game shows as taxable income, and even the cash value of non-monetary prizes is taxed.
When all is said and done, winners are left with some massive tax obligations if they want to claim the prizes they supposedly won free of charge. Lucky contestants agree to pay those taxes by signing extensive paperwork, and usually have to pay a portion of the taxes up-front before leaving the studio.
In addition to federal taxes, winners may have to pay state taxes as well. Most game shows are taped in California, and California taxes winnings at the state level, regardless of whether the winner is a California resident.
In most cases that involve non-monetary prizes, the winner cannot claim their prize right away. If you win a car, for instance, you will likely have to wait until the show contacts a car dealership near where you live, and you will then have to make arrangements directly with the dealer.
In the days following a win, a representative from the show has to confirm the winner's identity, then contact the prize manufacturer to ensure that an extra product is set aside. All of this takes time, usually between 90 and 150 days.
In a move that can only be described as disappointing, some shows award winners cash in lieu of the prizes they won on-air. Depending on the show, the winner is sometimes required to take cash instead of a prize, whereas other times they are given a choice.
To some, cash may sound like a better deal. After all, cashing a check is much easier than setting up a car delivery or figuring out where to put a new pool table you don't have room for. However, it's important to remember that cash will be taxed as income, just as the value of any other prize is taxed. While it's hard for winners to get away without shelling out some money, it has to feel pretty awful to find out that after taxes, you don't have the money needed to purchase the prize you thought you'd won.
It may seem totally counterintuitive for a contestant to win a big-ticket item in front of the cameras, then turn down the prize once taping has wrapped. However, many winners choose to go this route; usually after they learn how much their "prize" will end up costing them. One Price Is Right winner told Marketplace:
"My big prize was a five-hour private jet flight, valued at $25,000, that came with all sorts of stipulations — the plane would only take me 2 1/2 hours outside of Los Angeles, then 2 1/2 back. I had to spend at least two days in my destination before returning home and any expenses incurred in my destination city were my responsibility... To save myself the headache, I just forfeited the prize. I didn't get anything in return, and I couldn't have sold the plane ticket even if I did accept it. But I also didn't have to pay taxes on that prize."
Prizes May Not Be Appropriate For The Winner, Or Even Fit In Their Home
On top of the financial ramifications that come with game show prizes, there are also practical considerations to keep in mind. How many winners really even need a new car, not to mention a new dinette set? If you rent out a studio apartment, what are you going to do with a new eight-person hot tub? While the thrill of winning on-air is indisputable, a contestant's need for their prize is often more of a gray area.
Prizes Aren't As Expensive As They're Reported To Be
Prize values are often inflated when the announcer is describing the item on-air. This is especially true when expensive vacations are up for grabs. The retail value of a prize is different than what the prize might currently sell for, and sometimes the contrast is disheartening. Shows opt to announce the highest possible retail price, as it makes everyone involved look like they're more generous than they actually are.
