Online lottery sales not approved by Massachusetts lawmakers

Aug 2, 2016, 3:40 pm (33 comments)

Massachusetts Lottery

NORTHAMPTON, Mass. — Massachusetts lottery players are going to have to wait a little bit longer if they want to buy lottery tickets online.

In their most recent economic development bill passed Sunday, Massachusetts legislators chose not to authorize the state lottery to begin online gaming.

Lawmakers said that they wanted to address other priorities. Those included $500 million in funding for MassWorks infrastructure, and $45 million for new equipment in career and technical education. A new tax deduction to help families save to pay for college was also in the bill.

Lottery player Lydia Oram of Northampton said that she would not be interested in buying lottery tickets online. "Putting it online would make it too easy, and a temptation to have it accessible and do it as a regular thing. For me, I would rather not have that be an option," Oram said.

That setback aside, it was another record-setting year for the Massachusetts State Lottery. The lottery made about $5.2 billion for the fiscal year ending June 30. That is $217 million more than in the previous year.

WWLP, Lottery Post Staff

Comments

LiveInGreenBay's avatarLiveInGreenBay

The MA lottery made 5.2 billion dollars in one year?  Wow.

TheMeatman2005's avatarTheMeatman2005

Quote: Originally posted by LiveInGreenBay on Aug 2, 2016

The MA lottery made 5.2 billion dollars in one year?  Wow.

That's a nice profit.

LiveInGreenBay's avatarLiveInGreenBay

Yea Meatman...That's a lot of lottery players not winning squat.  LOL

THRIFTY's avatarTHRIFTY

LOTTERY PLAYERS CHANCES OF DYING ARE HIGHER BY GOING TO LOTTERY RETAILERS TO PLAY THE LOTTERY.

 

PLAYING THE LOTTERY ONLINE IS LESS RISKY.

 

Green laughGreen laughGreen laugh

LiveInGreenBay's avatarLiveInGreenBay

Quote: Originally posted by THRIFTY on Aug 2, 2016

LOTTERY PLAYERS CHANCES OF DYING ARE HIGHER BY GOING TO LOTTERY RETAILERS TO PLAY THE LOTTERY.

 

PLAYING THE LOTTERY ONLINE IS LESS RISKY.

 

Green laughGreen laughGreen laugh

That's true THRIFTY but consider this...Say over the course of a year you won on 6 or even 10 $500.00 tickets.  If you bought them at retailers there would be no record and no tax owed (unless you were stupid and declared it as income).  However; if you went online and bought those same low-tier winners, the IRS would automatically have a record of those wins.  And at the end of the year you would owe the IRS tax on those earnings. 

I see where this crap is eventually going.  In the near future, all lottery tickets will be sold online through smart phones or whatever.  There will be a record of all those winnings.  If it comes to that, I'm done.

THRIFTY's avatarTHRIFTY

Quote: Originally posted by LiveInGreenBay on Aug 2, 2016

That's true THRIFTY but consider this...Say over the course of a year you won on 6 or even 10 $500.00 tickets.  If you bought them at retailers there would be no record and no tax owed (unless you were stupid and declared it as income).  However; if you went online and bought those same low-tier winners, the IRS would automatically have a record of those wins.  And at the end of the year you would owe the IRS tax on those earnings. 

I see where this crap is eventually going.  In the near future, all lottery tickets will be sold online through smart phones or whatever.  There will be a record of all those winnings.  If it comes to that, I'm done.

I thought that prizes up to $600 were not taxable income?

LiveInGreenBay's avatarLiveInGreenBay

Quote: Originally posted by THRIFTY on Aug 2, 2016

I thought that prizes up to $600 were not taxable income?

They aren't but if you add a bunch of small wins together over a year, they equal a big win according to the dreaded IRS.

THRIFTY's avatarTHRIFTY

Quote: Originally posted by LiveInGreenBay on Aug 2, 2016

They aren't but if you add a bunch of small wins together over a year, they equal a big win according to the dreaded IRS.

I WILL NOT BE BUYING LOTTERY TICKETS THROUGH ONLINE SUSCRIPTIONS, OR BUYING LOTTERY TICKETS INSTANTLY ONLINE UNLESS IT IS TAX FREE.

music*'s avatarmusic*

Quote: Originally posted by THRIFTY on Aug 2, 2016

LOTTERY PLAYERS CHANCES OF DYING ARE HIGHER BY GOING TO LOTTERY RETAILERS TO PLAY THE LOTTERY.

 

PLAYING THE LOTTERY ONLINE IS LESS RISKY.

 

Green laughGreen laughGreen laugh

I Agree! Thrifty you have the safety issue on the mark.  I hope California goes online.Dance

THRIFTY's avatarTHRIFTY

Quote: Originally posted by music* on Aug 2, 2016

I Agree! Thrifty you have the safety issue on the mark.  I hope California goes online.Dance

Lottery winnings are all TAXABLE, when you buy lottery tickets through the Internet, including lottery Subscriptions.

 

LOTTERY PRIZES ( WINNINGS)SHOULD BE TAX FREE, SINCE WE ARE PLAYING WITH AFTER TAX MONEY.

Kingofearth's avatarKingofearth

Quote: Originally posted by LiveInGreenBay on Aug 2, 2016

That's true THRIFTY but consider this...Say over the course of a year you won on 6 or even 10 $500.00 tickets.  If you bought them at retailers there would be no record and no tax owed (unless you were stupid and declared it as income).  However; if you went online and bought those same low-tier winners, the IRS would automatically have a record of those wins.  And at the end of the year you would owe the IRS tax on those earnings. 

I see where this crap is eventually going.  In the near future, all lottery tickets will be sold online through smart phones or whatever.  There will be a record of all those winnings.  If it comes to that, I'm done.

There is a record and taxes are still owed. When you hand the ticket to the retailer, it gets verified and recorded. If you manage to win that many hits, the IRS will come looking for its cut and you'll see the bad side of a pair of handcuffs. We can't even use a credit card here in NY to buy a ticket,you really think the NY lottery is gonna digitize anything in the near future?

Kingofearth's avatarKingofearth

Quote: Originally posted by THRIFTY on Aug 2, 2016

I thought that prizes up to $600 were not taxable income?

They are, it's just that under $5,000 is too small for the IRS to care enough (600-4,999 is only withheld if you have outstanding debts like child support in most states and federally) to impose a witholding on it. You must include it though on your tax returns as gambling income, especially if it is a significant amount.

Kingofearth's avatarKingofearth

Quote: Originally posted by THRIFTY on Aug 2, 2016

Lottery winnings are all TAXABLE, when you buy lottery tickets through the Internet, including lottery Subscriptions.

 

LOTTERY PRIZES ( WINNINGS)SHOULD BE TAX FREE, SINCE WE ARE PLAYING WITH AFTER TAX MONEY.

An Emergency room doctor saves your life - His income is taxed

A firefighter rescues you from a burning house -his income is taxed

A military veteran is assigned to a base in Afghanistan- her income is taxed

You spend two seconds and $1 to buy a ticket while shopping -Your winnings should be tax free?

THRIFTY's avatarTHRIFTY

Quote: Originally posted by Kingofearth on Aug 2, 2016

An Emergency room doctor saves your life - His income is taxed

A firefighter rescues you from a burning house -his income is taxed

A military veteran is assigned to a base in Afghanistan- her income is taxed

You spend two seconds and $1 to buy a ticket while shopping -Your winnings should be tax free?

PLAYING THE LOTTERY IS A VOLUNTARY TAX. I QUIT PLAYING THE LOTTERY. I AM SAVING MY MONEY.

 

Green laughGreen laughGreen laugh

ArizonaDream's avatarArizonaDream

Yes. Because the state has already taken their cut.

Stack47

Quote: Originally posted by THRIFTY on Aug 2, 2016

I thought that prizes up to $600 were not taxable income?

Prizes over $600 are not issued a W-2G which basically means there is no written record of the win. But by playing online there is a record of all the transactions. Last year I "won" over $600 accumulated on a legal horse racing site, but since they never sent me an statement, I had nothing to give to the IRS.

LiveInGreenBay's avatarLiveInGreenBay

Quote: Originally posted by Stack47 on Aug 2, 2016

Prizes over $600 are not issued a W-2G which basically means there is no written record of the win. But by playing online there is a record of all the transactions. Last year I "won" over $600 accumulated on a legal horse racing site, but since they never sent me an statement, I had nothing to give to the IRS.

I think you mean under 600.  That's true.  The discussion was online lottery.  Say you run a pick 3 ticket ten times and hit the jp.  That's 5 grand.  If you bought retail, you can turn those tickets into various retail lottery stores and collect 5 grand.  But if they were bought online, a record of those wins would be available to the State department of Revenue and the IRS.  Guess what...You owe.

grwurston's avatargrwurston

Quote: Originally posted by Stack47 on Aug 2, 2016

Prizes over $600 are not issued a W-2G which basically means there is no written record of the win. But by playing online there is a record of all the transactions. Last year I "won" over $600 accumulated on a legal horse racing site, but since they never sent me an statement, I had nothing to give to the IRS.

You mean, prizes under $600.

LiveInGreenBay's avatarLiveInGreenBay

Quote: Originally posted by Kingofearth on Aug 2, 2016

There is a record and taxes are still owed. When you hand the ticket to the retailer, it gets verified and recorded. If you manage to win that many hits, the IRS will come looking for its cut and you'll see the bad side of a pair of handcuffs. We can't even use a credit card here in NY to buy a ticket,you really think the NY lottery is gonna digitize anything in the near future?

All you have to do is sign the back of the ticket.  How they going to know who it is?  Hey, my name is John Smith.

Groppo's avatarGroppo

.

Many good points have been made here, this evening.

If you are just joining this article, and it's comments, please be sure to read all the comments.
I have learned a lot from the comments here AND in previous articles and their comments.

Lessons learned here have already forged certain decisions I'll make from now, on:

I shall NOT participate in online gaming of any kind, for fear of the smallest prizes accumulating
within the year and resulting in the IRS obliging me.

Mr. Groppo

TheMeatman2005's avatarTheMeatman2005

https://www.irs.gov/taxtopics/tc419.html

Topic 419 - Gambling Income and Losses

The following rules apply to casual gamblers. Gambling winnings are fully taxable and you must report them on your tax return. Gambling income includes but is not limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income, or review How Do I Claim My Gambling Winnings and/or Losses?

Gambling Winnings

A payer is required to issue you a Form W-2G (PDF), Certain Gambling Winnings, if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings on your Form 1040(PDF) as "Other Income" (line 21), including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax. If you are considered a nonresident alien of the United States for income tax purposes and you have to file a tax return, you must use Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. Refer to Publication 519, U.S. Tax Guide for Aliens, and Publication 901, U.S. Tax Treaties, for more information.

Gambling Losses

You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A (PDF) as an "Other Miscellaneous Deduction" (line 28) that is not subject to the 2% limit. A nonresident alien of the United States cannot deduct gambling losses.

Recordkeeping

It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer toPublication 529, Miscellaneous Deductions, for more information.

You are legally obligated to report any and all lottery winnings....even $5, but can deduct the cost of the ticket and any other gambling loses up to and including the winning amount.

You may not win enough to receive a form W-2G, but you are still required to report the proceeds.

Bleudog101

Too bad for the residents of Massachusetts.  Glad KY is one of the few states that allows on-line ticket purchases.

 

On a side note, all set for Mass. lotteries.  My Season Tickets for Powerball, Megamillions and MegaBucks Doubler have all arrived and good through 28 AUG 2017.

faber98

Quote: Originally posted by TheMeatman2005 on Aug 2, 2016

https://www.irs.gov/taxtopics/tc419.html

Topic 419 - Gambling Income and Losses

The following rules apply to casual gamblers. Gambling winnings are fully taxable and you must report them on your tax return. Gambling income includes but is not limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income, or review How Do I Claim My Gambling Winnings and/or Losses?

Gambling Winnings

A payer is required to issue you a Form W-2G (PDF), Certain Gambling Winnings, if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings on your Form 1040(PDF) as "Other Income" (line 21), including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax. If you are considered a nonresident alien of the United States for income tax purposes and you have to file a tax return, you must use Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. Refer to Publication 519, U.S. Tax Guide for Aliens, and Publication 901, U.S. Tax Treaties, for more information.

Gambling Losses

You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A (PDF) as an "Other Miscellaneous Deduction" (line 28) that is not subject to the 2% limit. A nonresident alien of the United States cannot deduct gambling losses.

Recordkeeping

It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer toPublication 529, Miscellaneous Deductions, for more information.

You are legally obligated to report any and all lottery winnings....even $5, but can deduct the cost of the ticket and any other gambling loses up to and including the winning amount.

You may not win enough to receive a form W-2G, but you are still required to report the proceeds.

why would anyone report lottery winnings under 600.00 to the government both state and federal. you don't have to sign the ticket to cash it (you shouldn't) so how would they know who cashed it.  even if you were foolish enough to sign it they don't have anyone checking all these tickets (under 600.00) to catch you. even if you won 500.00 75 times in a year there is no way they can attached that to you. if you buy a ticket online that's a different animal. don't do it.

Bleudog101

Quote: Originally posted by faber98 on Aug 3, 2016

why would anyone report lottery winnings under 600.00 to the government both state and federal. you don't have to sign the ticket to cash it (you shouldn't) so how would they know who cashed it.  even if you were foolish enough to sign it they don't have anyone checking all these tickets (under 600.00) to catch you. even if you won 500.00 75 times in a year there is no way they can attached that to you. if you buy a ticket online that's a different animal. don't do it.

Yes,

But didn't Governor Patrick institute a state tax in Mass. for winnings over $500???

Stack47

Quote: Originally posted by LiveInGreenBay on Aug 2, 2016

I think you mean under 600.  That's true.  The discussion was online lottery.  Say you run a pick 3 ticket ten times and hit the jp.  That's 5 grand.  If you bought retail, you can turn those tickets into various retail lottery stores and collect 5 grand.  But if they were bought online, a record of those wins would be available to the State department of Revenue and the IRS.  Guess what...You owe.

As somebody pointed out, the IRS defines it as "gambling winnings" so if the prize is $600 like the KY pick-3 pays, the winnings are $599. The KY Lottery agents do not issue a W-2G on $1 pick-3 winning straight ticket. Under your ten $500 winning tickets scenario, no W-2G would not be issued so no winnings are reported to the IRS.

The KY lottery offers MM, PB, and its state game Cash Ball Online along with several instant play games some with prizes up to $50,000. Any wager winning over $600 is reported to the IRS, the same as if it was from a lottery retailer. The difference between wagering Online is there is a record of all the wagers, There is no report to the IRS or record of the $5000 paid out by a retailer(s).

Stack47

Quote: Originally posted by faber98 on Aug 3, 2016

why would anyone report lottery winnings under 600.00 to the government both state and federal. you don't have to sign the ticket to cash it (you shouldn't) so how would they know who cashed it.  even if you were foolish enough to sign it they don't have anyone checking all these tickets (under 600.00) to catch you. even if you won 500.00 75 times in a year there is no way they can attached that to you. if you buy a ticket online that's a different animal. don't do it.

Good question!

All gambling winnings (I suppose it mean free tickets too) must be reported as income on 1040s, but any gambling losses up to the amount of the winnings can be deducted using schedule "A" itemize deductions. How any individual decides how much they won (winning minus losses?) whether or not to report it, is their decision.

"there is no way they can attached that to you"

IMO, that's between you, your accountant, and the IRS.

Kingofearth's avatarKingofearth

Quote: Originally posted by faber98 on Aug 3, 2016

why would anyone report lottery winnings under 600.00 to the government both state and federal. you don't have to sign the ticket to cash it (you shouldn't) so how would they know who cashed it.  even if you were foolish enough to sign it they don't have anyone checking all these tickets (under 600.00) to catch you. even if you won 500.00 75 times in a year there is no way they can attached that to you. if you buy a ticket online that's a different animal. don't do it.

A couple hundred is too small for even the IRS to care BUT if you manage to win thousands and thousand from the small prizes and/or you rely on your new skill as a major part of your income, you better report it or the IRS will come knocking with handcuffs. If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. Between court fees from unpaid taxes, paying the unpaid taxes, and lawyer fees, you'll be in the red just because you didn't file it.

LiveInGreenBay's avatarLiveInGreenBay

Quote: Originally posted by Kingofearth on Aug 3, 2016

A couple hundred is too small for even the IRS to care BUT if you manage to win thousands and thousand from the small prizes and/or you rely on your new skill as a major part of your income, you better report it or the IRS will come knocking with handcuffs. If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. Between court fees from unpaid taxes, paying the unpaid taxes, and lawyer fees, you'll be in the red just because you didn't file it.

Answer me this... If someone did win $500.00 a bunch of times over the period of a year or so, how would they know it was one person?  The lottery won't investigate squat.

Stack47

Quote: Originally posted by Kingofearth on Aug 3, 2016

A couple hundred is too small for even the IRS to care BUT if you manage to win thousands and thousand from the small prizes and/or you rely on your new skill as a major part of your income, you better report it or the IRS will come knocking with handcuffs. If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. Between court fees from unpaid taxes, paying the unpaid taxes, and lawyer fees, you'll be in the red just because you didn't file it.

"If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. "

ROFL

Apologies for laughing, but some state lotteries pay out $500,000 daily and I seriously doubt they have the time or resources to investigate 365,000 winning tickets year. Now if a state had an average daily sales of $600,000 and paid out $500,000 daily, there might be some type of investigation, but on average, pick-3 payoffs are very close to 50% of the wagers; they expect to pay out half the sales.

A couple years ago, the KY Lottery paid out 92% of their pick-3 sales (over $10 million) for one month without any retail sales investigation because their live ball drawings had an extraordinary amount of triples. Oh and BTY, MUSL does not oversee state lottery games, just MM, PB, and the smaller multi-state games (Hotlotto etc).

faber98

Quote: Originally posted by Bleudog101 on Aug 3, 2016

Yes,

But didn't Governor Patrick institute a state tax in Mass. for winnings over $500???

yes, that no good governor did. so under 500.00 is safe.

faber98

Quote: Originally posted by Kingofearth on Aug 3, 2016

A couple hundred is too small for even the IRS to care BUT if you manage to win thousands and thousand from the small prizes and/or you rely on your new skill as a major part of your income, you better report it or the IRS will come knocking with handcuffs. If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. Between court fees from unpaid taxes, paying the unpaid taxes, and lawyer fees, you'll be in the red just because you didn't file it.

you couldn't be more wrong if you tried. sure, they're going to check cameras in every store in the state to see who is cashing all the under 500.00 tickets. the people that work for the state and the lottery have trouble ordering lunch if they show up for work at all. there would be no lawyers fees, court fees etc. even in the remote chance you did get caught. it isn't even a remote chance, it's no chance. they would just send you a bill which you could negotiate down. the irs doesn't jail people unless they are bernie madoff types. there is no one checking under 500.00 lottery wins. they can't keep up to the over 500.00 ones. how they would tie up a person with cashing those tickets is a mystery of the ages and is not possible.

dr65's avatardr65

Quote: Originally posted by THRIFTY on Aug 2, 2016

LOTTERY PLAYERS CHANCES OF DYING ARE HIGHER BY GOING TO LOTTERY RETAILERS TO PLAY THE LOTTERY.

 

PLAYING THE LOTTERY ONLINE IS LESS RISKY.

 

Green laughGreen laughGreen laugh

LOL

sam9009's avatarsam9009

Any winnings in NY ($600 or less) you collect from a bodega don't require IRS paperwork.

IRS will know about it only if you tell them. 

I guess it's an individual choice. 

 

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