Josh Winslet was sentenced in the Adelaide District Court earlier this month, four years after a winning ticket brought him a life-changing windfall when he was just 22.
Former employer Rory McLellan said it was a "a real waste".
Police found Winslet in possession of 2.27g of cocaine, and found nearly 30g of MDMA on his Adelaide property during a raid in August 2020.
He was sentenced to three years and nine months’ jail, with a non-parole period of 18 months.
The sentence was suspended on a two-year good behaviour bond.
Mr McLellan recalled his former employee as a "pleasant young guy" with whom he had a good relationship during his brief employment at McLellan's Plumbing & Heating.
Kidney-related health issues had caused Winslet problems, Mr McLellan said.
The win was confirmed on a Thursday, and Winslet initially said he would be back at work on Monday.
Mr McLellan told him not to be silly.
"I said, ‘there’s always a job here for you but I could imagine you not wanting to come to work when it sinks in.’
"Sure enough, we never saw him again."
In retrospect, he thought it would have been better if he had stayed.
"He went back to Australia at the start, then I think he came back and bought a few toys ... The next thing I heard was the drugs, so that was a real waste."
Some of Winslet's winnings were used to buy a property on the outskirts of Alexandra, an upmarket bed and breakfast and a winery.
A company which is 100% owned by Winslet is listed as the owner of the property, which has a capital value of $1.44million.
A neighbour said it looked like the vines had been pulled out, but beyond that he did not know what was happening at the property.
The Adelaide court heard how, after bagging his windfall, Winslet's parents managed his winnings through a trust fund but he was still able to access enough of his fortune to allow him to quit working as a plumber and bankroll a "hopeless" drug addiction.
Winslet, who also bought other property in New Zealand, was treated as a "free ride" by other drug users, the court heard.
During the 2020 raid, police also found a Mauser pistol and ammunition.
Winslet pleaded guilty to supplying MDMA and possessing a firearm without a licence, the Advertiser newspaper reported.
In sentencing Winslet, Judge Heath Barklay said his win had robbed him of a drive for a productive life and brought him into contact with the wrong crowd.
"Because of the money that you had won, there was no motivation on your part to work or do anything other than enjoy yourself," Judge Barklay said.
Winslet's drug addiction meant his house became a drug den where his "so-called friends" could "run amok".
"You, in many ways, were a free ride.
"One of your so-called friends brought the firearm and ammunition ... to your house and stored it in your roof."
Photos released by the court show the Adelaide house littered with drugs and drug paraphernalia, empty beer bottles and nitrous oxide canisters sharing space with cannabis bongs and lighters.
A fridge was empty save for alcohol and energy drinks — and a bowl of white powder.
The house was dirty, with rubbish and clothes lying around, floors marked and stained and a framed photo of Winslet’s winning online ticket a reminder of what could have been.
The court heard the prospect of jail had been a "wake-up call" for Winslet.
"Although winning the Powerball was incredibly positive in many ways, the down side ... is that you lost motivation in life and contented yourself with living a hedonistic lifestyle punctuated by drug use," the judge said.
— Additional reporting The New Zealand Herald
