Lotteries in America

Lottery games and the USA would seem to be made for each other, with the aspirational aspect of lotteries meshing perfectly with ‘the American dream’ of any individual being able to achieve prosperity and success. Whilst the American dream itself was originally an invitation for individuals to succeed through their own hard work and innovation, lottery games give players a potential shortcut to financial freedom that many Americans are keen to embrace.

The United States of America is one of the largest countries in the world and it is therefore unsurprising that a huge number of lottery games are played there. Many states have their own state lotteries (for example, California has the California Lottery whilst New York has the New York Lottery) and each of these state lotteries usually offer several different draw-based games as well as numerous scratchcards and other instant win games. Whilst it used to be the case that a player could only buy state lottery tickets from an offline retailer in that state, buying tickets online allows out-of-state or even non-US players to take part just as easily as state residents.

Multi-state Lottery Games

In addition to the many state lottery games that are available in America, there are two much larger multi-state lottery games. As the term suggests, these are games that are played in multiple states, with all money raised from ticket sales contributing to a single shared prize fund. The two multi-state games are Mega Millions and Powerball, both of which are currently played in 44 states. Powerball is also offered in three US jurisdictions - Washington D.C., the US Virgin Islands and Puerto Rico.

The vast majority of draw-based lottery games in America (including Mega Millions and Powerball) allow players to select their own numbers or to enter a random selection, as they prefer. Paper tickets are issued when players participate offline and virtual tickets are assigned to those who play online. As in most other nations, American lottery wins must be claimed within a certain period of time, but the length of time allowed can and does vary from state to state.

Lottery jackpots in the USA can be paid in the form of an annuity (an extended series of annual instalments, often running for as many as 30 years) or as a single lump sum. It should be noted that advertised jackpot amounts usually assume that the annuity option (if available) will be taken, and so anyone who opts for the lump sum instead will receive less than the amount advertised.

Most lottery jackpot payouts are viewed as taxable income in the USA, but the taxes due will vary from state to state. Some winners will only have to pay federal taxes whilst others will have to pay both federal and state taxes. The rate at which state tax is payable (if any) also varies from state to state. Any player who is concerned about this aspect of lottery participation is advised to check their personal potential tax liability so that precise percentages can be obtained, but it has to be said that winning a jackpot and paying taxes is normally viewed as being much better than not winning a jackpot and not paying taxes!

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