this post was submitted on 30 Dec 2024
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It's not taxes... well not all of it. The lotto advertises its prize as the sum total of a 30 year annuity. Currently Powerball has an estimated Jackpot of 163 Million. You can take the lump sum up front though. At present that lump sum is 73.9 million. After you get that, then you get taxed on it, reducing it to probably something like 40-50 million.
That seems incredibly scammy to me. They're pretending the prize is double what it actually is and then claim even more of that back as taxes. If the actual prize money is only 20% of what you're advertising that's dishonest at best.
Where I am lottery winnings are tax-free and without an insane hidden 50% "claimed your winnings" fee. What they advertise is what you get if you win.
Of course it does, it's the lottery
A lottery isn't necessarily inherently a scam, at least no more than gambling is in general. In practice the odds of winning are pretty poor compared to alternatives but as long as they're up front about the odds of winning I wouldn't call that a scam. Eg, this lottery lists the odds of winning each prize, though it would definitely be better if they published those on the main page rather than in the terms. A fairer lottery is possible pretty easily by adjusting the prize values, range of numbers to select, or how many numbers the gambler selects. This would kind of defeat the purpose of most lotteries to raise money for government, but personally I'm for more progressive taxes anyway.
Advertising one prize when the real prize is significantly lower is just lying and not an inherent trait of lotteries.