Tax Implications of Playing Lotto


Lotto is a game where you select numbers on a ticket and hope that the numbers that match the winning one will be drawn. The game is played in many states and is tax-free. Its origins are from Italy, where King Francis I discovered lotteries. The King hoped that a lottery would boost state finances. The first lottery in France was in 1539. This lottery was called the Loterie Royale, and was authorized by an edict signed by the king. Sadly, it was not a success. Tickets were expensive and the social classes resisted the project. The lottery was eventually banned in France for almost two centuries, though it was tolerated in some places.

Lotto is an Illinois-only $2 jackpot game

If you live in Illinois and would like to try your luck at becoming a millionaire, try playing the Lotto game. This Illinois-only game offers three separate drawings that give you the chance to win up to $2 million. Each drawing consists of 6 numbers, and if you match all six of them, you win. You can also opt for the Extra Shot, which gives you six additional chances to win non-jackpot prizes.

You can play the Lotto game online or in-person at an Illinois Lottery retailer. You can purchase a single ticket, or subscribe to a lottery subscription. To subscribe, you must register for an account and deposit a minimum of $10. Once you’ve finished depositing, select a game and choose how many drawings you want to watch.

It is tax-free

The prize money from winning the Lotto is tax-free if it is not banked, but if you do, the tax implications are substantial. HM Revenue & Customs doesn’t consider lotteries as “income,” so winnings are not subject to income tax if they are not banked. But if you do bank the prize money, it becomes part of your estate, and that means it will be subject to 40% inheritance tax.

In addition, if you are over 50, you should consider investing in super to reduce your tax bill. Lottery winnings are also tax-free if they are paid in a lump sum. However, you should consider other options, including annuities, before deciding to cash in your lottery winnings.