It may not be a big secret to most regular players, but what does that have to do with whether or not it's the ethical way to do it? $1 paid over 25 years is not $1, but that's how annuitized prizes are always advertised.  Nobody eats their rice straight out of the box, but it's illegal to advertise a one pound box of rice as 3 pounds even if there's a disclaimer that the weight refers to the cooked weight.  Why shouldn't advertising for the lotteries have to follow the same rules that apply to other advertisers? Better still, why can't our governments be honest about something that isn't a big secret, even if the law doesn't require them to?

As far as finding a cash breakdown on all state lottery websites, what you believe is wrong.  Most of them do offer the information, but some don't.

Why shouldn't advertising for the lotteries have to follow the same rules that apply to other advertisers?

Follow the same rules:

 like all those weight loss miracle pills, hair restorers, instant paint removers, body enhancment gels,lotions and pills, anti aging make-up,  grass restorers, pain relief for anything that bothers you in one magic bottle. products they claim to improve gas milage, as well as all those gizmos and gadgets, cheap knock-off jewelry, gems and stones, that inundate the advertising world......and don't really work, or is usually crap. or how about the clever play on words by all those lottery program distributors?

You mean those rules that they follow? 

Very few people take annual payments. Let's say someone really goofed (not on purpose) and added a zero. Wouldn't you be thrilled to win $10 million even if you thought it was going to be $100 million? 

Another way to look at this "deception" (although it's really not, because you do have the option of taking the annuity) is that it helps boost the jackpot by attracting more players, so that's better for us - right?  I mean, if only serious lottery players bought tickets, the jackpots wouldn't grow so quickly.  Hype gets people excited, especially those who don't realize the payout is so much less. 

Some hype is really bad, like the media reporting events that didn't happen or twisting them to get a reaction from the public.  But in this case, I don't think it's a big deal.  Anyone who follows a game should know approximately what it's going to pay anyway, and taxes are a no-brainer.

I wrote:  "Very few people take annual payments. Let's say someone really goofed (not on purpose) and added a zero. Wouldn't you be thrilled to win $10 million even if you thought it was going to be $100 million?"

I want to clarify - I was talking about a reporter on the news, not the lottery.  If the lottery kept advertising $100 million prize and it was "only" $10 million, I would consider that to be fraud!

hello todd,, and thats why i love this webpage...keep up the great work ...i hope you didn't think i was knocking you .i was knocking the states lottery pages........................

Not at all, I knock the states sites myself all the time!

speaking of taxes. After winning the jackpot is the federal amount deducted a income tax or some kind of luxury tax? Do the bust you with this tax then hit you with an income tax also?
 

Lottery winnings are income, and it's an income tax. Luxury taxes are added to sales or other taxes when you buy something.

There's no question that there are plenty of people making false and misleading claims when they market their goods. How does that absolve anybody else who does it?

Most of the things you mention don't actually violate the rules. For the most part there are no rules against selling gizmos and gadgets, cheap knock-off jewelry, gems and stones .The rules are about the claims made when selling the products. If you pay attention to the claims for many of the other products you cite you may notice that they usually don't actually claim much at all. That some people are too stupid to notice and shell out their money is too bad, but that's all it is.

Think about one of the most heavily advertised products on TV. What does Enzyte do? It's a "natural male enhancement" and that's it. I don't know what's enhanced, but that Bob guy certainly looks happy enough, so maybe that little pill makes him feel better about himself. If so, its more than he was promised. 

Except for federal and state income tax (if there is a state tax) there will be an estate tax if you die and leave over $2 million, which also includes property value.  Also, there are limits to what you can give away without being penalized with a gift tax.  As KY Floyd stated, there is no luxury tax on the prize.

KY FLoyd writes:  Think about one of the most heavily advertised products on TV. What does Enzyte do? It's a "natural male enhancement" and that's it. I don't know what's enhanced, but that Bob guy certainly looks happy enough, so maybe that little pill makes him feel better about himself. If so, its more than he was promised. 

Funny that you should mention that tonight.  I was just watching cable and one of those commercials came on TV.  I started laughing when they said "that certain part of the male body" but never which part. Even the so-called doctor who endorses it uses that expression. I can't imagine going to the doctor and hearing "you have a problem with a certain part of the female anatomy."  Then someone walks up and down a city street stopping people to ask about their experiences with this male enhancement product, as if they just ran into these folks.  They all say "I'm bigger" or it got bigger."  They never say what got bigger.  Maybe he went from a size 10 shoe to a size 12.