New owner of Publishers Clearing House says it will not pay past ‘for life’ prizes

The Miami-based gaming firm that bought Publishers Clearing House out of bankruptcy said it will not pay prizes owed to winners declared before July 2024, leaving several long-promised "for life" payments and other awards in doubt and prompting some recipients to scramble to cover living expenses.

ARB Interactive said in a statement that under the terms of the sales agreement, past prize obligations will not be honored but that all future prizes will be paid. The announcement has affected people who had planned their finances around guaranteed lifetime payments or other awards.

John Wyllie, 61, of Bellingham, Washington, said he was told in 2012 that he had won $5,000 a week for life but had not received a payment this year. Wyllie said he has been forced to sell a jet ski and trailer and to look for work after more than a decade out of the labor force. "This feels like a nightmare," he told local television. "I thought this was going to go on for the rest of my life."

Other winners described similar shocks. Matthew and Tamar Veatch, disabled veterans who won the same $5,000-a-week prize in 2001, said they will now have to rely solely on military pensions. At least one winner's prize, an African safari valued at about $19,082, was awarded in January 2022, and others received smaller or one-time awards. Court filings show at least 10 prize winners are listed among PCH’s 20 largest unsecured creditors; those names were redacted.

PCH estimated in bankruptcy filings that it owed $26 million in future prize money, with about $1.9 million in payments due this year. The company’s decline accelerated in recent years: annual revenue fell from $854 million in 2017 to $182 million in 2023, according to the filings. At the time of its Chapter 11 filing in April, PCH reported between $1 million and $10 million in assets and between $50 million and $100 million in liabilities.

Lawyers for unsecured creditors said recovery prospects for prize winners are slim given the company’s limited assets. The bankruptcy case remains open in federal court, and creditors, including prize winners, have a deadline later this year to file claims.

ARB Interactive said it plans to relaunch the PCH brand with new digital contests and has offered an assurance that "all future PCH prizes are honored, regardless of ARB’s financial status." The company also said it is "committed to restoring and preserving the trust that has defined the Publishers Clearing House brand for decades." The statement did not promise compensation to past winners whose claims predate the July 2024 cutoff.

Publishers Clearing House was founded in 1953 as a mail-order magazine subscription service and launched sweepstakes in 1967. It became widely known after introducing the "Prize Patrol" in 1989, a promotional tactic in which representatives surprised winners at their homes with balloons, television cameras and oversized checks. The brand and its prize announcements entered American popular culture through frequent references and parodies in television and comedy.

Behind the public spectacle, financial strain mounted. PCH’s steep revenue decline and mounting liabilities led to the Chapter 11 filing earlier this year. The company’s filings show that promised lifetime payouts became unsustainable as liabilities outpaced assets.

Winners who had planned long-term using promised payouts said they received little warning. Wyllie said he had not been notified that the company was in dire financial condition before the first annual payment he expected — about $260,000 — failed to arrive this January. "Why didn't somebody give me a heads up? 'Hey, we're going out of business,'" he said.

Attorneys advising claimants said they would pursue filed claims but cautioned that distributions to unsecured creditors in a bankruptcy of this size and with such limited assets are likely to be small or nonexistent. The debtor’s business sale and the buyer’s statement about honoring only future prizes effectively place past prize obligations in the unsecured creditor pool.

For long-standing winners, the legal and financial processes offer limited immediate relief. Several said they were selling possessions, tapping other benefits, or seeking new employment to cover mortgage and living costs. The bankruptcy timetable will determine whether any portion of the owed prizes is recovered, but filings and creditor advisers indicate recovery is unlikely.

The case continues in federal bankruptcy court, where creditors will be processing and litigating claims in the months ahead. ARB Interactive’s stated focus is on rebuilding the brand and assuring future entrants and winners that promised awards will be paid under its ownership, while past winners and creditors await the outcome of the bankruptcy proceedings.