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The Waffle House Waitress Who Won $10 Million on a Lottery Tip — and Then Watched Her Life Unravel

  • 2 hours ago
  • 8 min read
Collage of three people; Tonda Lynn speaking at a podium. Background text: "WAFFLE HOUSE.” Caption: "The Cop Who Robbed His Own Crime Scenes."

Most people dream about winning the lottery. The fantasy is always the same: one lucky ticket, one moment of revelation, and then a life of total freedom. For Tonda Lynn Dickerson, that moment arrived on a Saturday morning in March 1999, when she scratched a Florida lottery ticket she'd received as a tip at a Waffle House in Grand Bay, Alabama, and discovered she'd won $10 million.


What followed wasn't a fairy tale. It was years of lawsuits, a brutal IRS battle, a terrifying kidnapping at gunpoint, and a legal paper trail that wound through Alabama state courts, the U.S. Tax Court, and the pages of Forbes magazine. Tonda's story is one of the most dramatic cautionary tales in lottery history, and it raises a question most winners never think to ask: what happens after the cheque clears?



A Regular Customer, a Generous Habit, and a Life-Changing Envelope

Tonda Dickerson was 28 years old and working the breakfast shift at the Waffle House on Interstate 10 in Grand Bay, Alabama. It was the kind of job that demands patience, a good memory for orders, and the ability to stay cheerful through long hours on your feet. One of the regulars who made those shifts easier was a man named Edward Seward Jr.



Seward was a fan of the Florida Lotto and had a tradition of buying tickets not just for himself but for some of his favourite waitresses. It was a kind, small-scale habit that nobody thought much of. On 6 March 1999, he visited the Waffle House after his meal and handed out five sealed envelopes to five different servers. Each contained a lottery ticket. He had no idea that one of those tickets had already been selected the previous night to receive a jackpot of $10,015,000 paid over 30 years, or $5,075,961 as a lump sum.


Tonda opened her envelope the following day, on 7 March 1999. She'd won. The ticket in her hand was worth $10 million.


She didn't quietly pocket it and head to work. She called a lawyer.


The Agreement Nobody Wrote Down

Here's where things got complicated. According to Tonda's four colleagues at the Waffle House, the five ticket recipients had a standing verbal agreement: if any one of them ever won big on a ticket from Seward, they'd split the winnings equally. Sandra Deno, Angie Tisdale, Matthew Adams, and Jackie Fairley all said the same thing. A couple who regularly ate at the same Waffle House backed them up, claiming they'd heard about the arrangement too.


There was also an understanding with Edward Seward himself. He'd told the waitresses that if any of them ever struck it rich, all he wanted was a new truck. They could keep everything else.


Tonda disagreed with all of it. She quit the Waffle House and kept the winnings for herself, opting to receive her jackpot as annual payments spread over 30 years rather than the smaller lump sum. Her coworkers responded by suing her in April 1999 at the Mobile Circuit Court.


The case, known formally as Dickerson v. Deno, saw a jury side with her former colleagues. The court found there had been an oral agreement to share. Faced with the prospect of losing most of her winnings, Tonda was offered a settlement of $3 million but she turned it down flat.


She appealed, and on 18 February 2000, the Alabama Supreme Court reversed the decision. The court ruled that even if the verbal agreement had existed, it couldn't be enforced under Alabama law, because it was founded on a gambling consideration, and contracts related to gambling were void under the state's anti-gaming statutes. Two justices dissented, which says something about just how close the legal argument was.



9 Mill Inc. and the IRS Knock on the Door

On 8 March 1999, the day after she confirmed her win, Tonda sat down with her father and a lawyer named Dwight Reid to work out what to do next. A lottery official named Ms. Warren had advised the family not to sign the ticket individually. Instead, they created a Subchapter S corporation called 9 Mill Inc. to claim the prize collectively.


The shares were divided among Tonda and her husband (49%), her mother Cynthia Reece (17%), and other family members including her brother, sister, and their spouses. It seemed like a sensible way to share her good fortune with the people she loved.


The IRS saw it differently. Because Tonda hadn't filed a gift tax return for 1999, the agency eventually determined that her transfer of 51% of the lottery winnings to her family members via the corporation was a taxable gift. The IRS calculated a gift tax deficiency of $771,570.


Tonda's legal team at Sirote and Permutt fought back. Attorneys David Wooldridge and Ronald Levitt mounted a creative argument: because her former Waffle House colleagues had pursued legal claims against the winnings, those claims should be factored into the ticket's valuation as of the date of transfer. If there was a reasonable chance she'd have to give up 80% of her winnings to her coworkers, then the value of what she transferred to her family should be discounted accordingly.


Tonda with her ex-husband
Tonda with her ex-husband

On 6 March 2012, the U.S. Tax Court agreed with the approach. While the court still classified the transfer as a gift, it applied a 65% discount on the value of the portion subject to the coworkers' claims, plus a 2% deduction for likely litigation expenses. The result was a total discount of 67%. Her final gift tax obligation was reduced to roughly $100,000, which was a saving of more than 87% on the original IRS bill.


Wooldridge later described the case as requiring lawyers to "think outside the box." It was, in tax law terms, a genuine win, even if the broader story around it was anything but.


Edward Seward's Truck Lawsuit

In 2002, about three years after the win, Edward Seward himself filed a lawsuit against Tonda. He claimed she'd promised to buy him a truck if she ever won big on one of his tickets, and that she'd failed to keep that promise. A Mobile County Circuit Judge threw the case out in February 2002.


For a woman who'd just fought off her colleagues in court and was facing a looming IRS dispute, the dismissal must have felt like a small mercy. But that same week, something far more frightening was about to happen.



The Kidnapping at Bayou Heron

Tonda had divorced her ex-husband, Stacy Martin, back in 1997, two years before the lottery win. Martin had already shown troubling behaviour in the period after her jackpot: he'd been linked to a break-in at her home in December 2001 and had spent time in jail as a result.


Shortly after his release, in the same week the Seward truck lawsuit was dismissed, Martin confronted Tonda while she was driving in Mississippi. He forced her at gunpoint to drive towards Bayou Heron, an isolated wetland area. During the journey, he threatened to kill her, and when her phone rang, he grew more agitated.


Tonda told him she needed to answer the call, or people would start looking for her. He agreed. But instead of reaching for her phone, she grabbed the handgun she was carrying. Martin lunged at her. She shot him in the chest.


Wounded, Martin still managed to take the gun from her. He threatened to kill her, then threatened to kill himself. In a remarkable display of composure given the circumstances, Tonda talked him down. She convinced him to go to hospital instead, where he received treatment for his injury. Police were called and she was finally free.


Reports from the time indicated that Martin was expected to face kidnapping charges, though the subsequent legal proceedings became murky in the public record. No conviction has been definitively confirmed in available sources.


Where Is Tonda Dickerson Now?

After more than a decade of courtrooms, IRS hearings, and violence, Tonda Dickerson largely disappeared from public life. The most recent information suggests she's been working as a poker dealer at a casino in Biloxi, Mississippi, a quietly ironic outcome for a woman whose lottery win touched off so much legal chaos around gambling law.


She's never given a major media interview about the full arc of her experience, and there's no record of her speaking publicly about what the years between 1999 and 2012 cost her emotionally, financially, or personally.



Why Lottery Winners Often Lose More Than They Gain

Tonda's case is an extreme example of a pattern that plays out repeatedly among lottery winners. Research from the National Endowment for Financial Education has suggested that a significant proportion of lottery winners end up in serious financial difficulty within a few years of their win. The reasons vary: unmanaged tax obligations, pressure from family members or friends, predatory lawsuits, and the psychological difficulty of adjusting to sudden wealth.


Tonda wasn't reckless with her money. She opted for the slower annuity payments rather than the lump sum, suggesting she was thinking long-term. She set up a corporation to distribute the winnings with tax advice. By most measures, she made sensible decisions. And still, for over a decade, her win brought her almost nothing but legal and personal turmoil.



The Waffle House colleagues who sued her are difficult to judge simply. If the verbal agreement existed as they described it, their anger was understandable. But the law, at least in Alabama, wasn't on their side. Gambling-based verbal contracts can't be enforced there, no matter how sincerely they were meant at the time.


As for Edward Seward, his wife posted publicly years later that he'd never received so much as a thank you from Tonda, and that his generosity had gone entirely unrewarded. Whether that generosity entitled him to a truck or a share of the winnings is a moral question the courts ultimately declined to answer in his favour.


Key Facts at a Glance

  • Date of win: 7 March 1999

  • Jackpot value: $10,015,000 over 30 years, or $5,075,961 as a lump sum

  • Location: Waffle House, Grand Bay, Alabama (Interstate 10)

  • Ticket gifted by: Edward Seward Jr., a regular customer

  • Coworkers who sued: Sandra Deno, Angie Tisdale, Matthew Adams, Jackie Fairley

  • Alabama Supreme Court ruling: 18 February 2000, in Tonda's favour

  • IRS gift tax assessed: $771,570

  • Tax Court ruling: 6 March 2012, tax reduced by more than 87%

  • Kidnapping: 2002, Bayou Heron, Mississippi, by ex-husband Stacy Martin

  • Current whereabouts: Believed to be working as a poker dealer in Biloxi, Mississippi


Frequently Asked Questions

Did Tonda Dickerson have to share her lottery winnings?

No. Although a jury initially ruled against her, the Alabama Supreme Court reversed the decision in February 2000. The court found that the alleged verbal agreement couldn't be enforced under Alabama law because it related to gambling.


Did Tonda Dickerson pay the IRS gift tax?

Partially. The original IRS assessment was $771,570. After a successful legal challenge, the U.S. Tax Court reduced the amount by more than 87% in March 2012, meaning she paid roughly $100,000 rather than the full sum.


What happened to Tonda Dickerson's ex-husband after the kidnapping?

Stacy Martin was taken to hospital with a gunshot wound after Tonda shot him during the kidnapping attempt in 2002. He was expected to face kidnapping charges, though the full outcome of any criminal proceedings isn't clearly documented in publicly available records.


What lottery did Tonda Dickerson win?

She won the Florida Lotto on a ticket drawn on 6 March 1999. The ticket was a gift from a regular restaurant customer, Edward Seward Jr.

Sources

Forbes / Deborah Jacobs (March 2012): Waffle House Waitress Wins Big in the Lottery, Loses at Tax Court

U.S. Tax Court ruling: Tonda Lynn Dickerson v. Commissioner, T.C. Memo. 2012-60, No. 20029-08 (6 March 2012)

Boise State University Foundation / GiftLaw Pro case note: giftplanning.boisestate.edu

 
 
 
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