Lottery Taxes

A lottery is a game of chance where numbers are drawn at random to win prizes. This type of gambling is legal in most states and sometimes organized so a percentage of the money raised is donated to good causes.

Lottery Definition: A game of chance in which a player buys a ticket for $1 or more and then selects a group of numbers to win a prize. The prize may be money, jewelry or a new car.

Typically, the prize is paid in one lump sum or as annual installments. Many lottery winners choose to take a lump sum because it is easier for them to manage.

The odds of winning a lottery vary widely depending on the game. For example, the odds of winning Powerball are 1 in 292.2 million, while the odds of winning Mega Millions are 1 in 302.5 million.


In the United States, most people who play the lottery have to pay federal taxes on their winnings. These taxes add up to 24 percent of a winning ticket. So if you won $10 million in the lottery, you’d only get half of it back after paying federal taxes, according to a study by the University of Michigan’s Institute for Social Research.

For more information about lottery taxes, visit the National Association of State Lotteries. The NALS is a nonprofit organization that works to improve the public’s understanding of lottery taxes and promote responsible gambling.