Professional gamblers claiming millions in lotto prizes

Friday December 24th 2010

Individuals in America are repeatedly making lottery claims as a way of helping real winners avoid paying state and federal taxes. According to a report by the Associated Press, professional gamblers are offering to cash in winning tickets in return for a cut of the prize. Because of their profession, these individuals are able to write off gambling losses against winnings which allows the actual lottery winners to avoid paying tax.


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Unlike their UK counterparts, American lottery winners who play games such as Powerball and Mega Millions, have to pay a large proportion of their winnings to the tax authorities. For example, a win of $1million on the New York Lottery will translate into a cash prize of $660,300.

It’s estimated that claims worth millions of dollars are being made this way. Because lottery organisers in America are required to pay the person who is in possession of a winning ticket, who may not necessarily be the person who decided to buy lotto tickets, there is currently nothing the authorities can do to stop the practice. However, the report said names of people who frequently cash winning tickets are being passed on to the federal Internal Revenue Service and state Department of Revenue.

Written by Katelin Thompson

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