A lottery is a government sanctioned form of gambling that rewards lots of money and prizes. In countries where lotteries are legalized, the state also organizes national or state lotteries. The game involves picking numbers to choose the winning ticket. Records indicate that the first signs of lottery can be traced to the Chinese Han Dynasty around 205 to 187BC and it involved the use of Keno slips. The money that accrued from the lottery is said to have funded government mega-projects such as the Great Wall of China. In Europe, early reports indicate that lotteries were first held as part of dinner table amusement during the Roman Empire era. The first lottery tickets that went on sale were approved by Roman Emperor Augustus Caesar.
Today, various countries are proud to have their own national lotteries. In North America US has state lotteries in almost every state in the union. This is in addition to two multistate lotteries, the Powerball and Mega Millions. In Canada, there is Lotto Max and 6/49. Across the pond in Europe; there are two major Pan European lotteries, the Euro Millions and Euro Jackpot. The United Kingdom has the National Lottery and Health Lottery while Germany has Super 6, Lotto 6 and Spiel 7 among others. It is instructive to note that Spain’s Christmas Lottery is considered the world’s richest lottery. In 2012, the first lottery prize stood at $940 million while the total pool prize held a staggering $3.3 billion.
The Powerball set the record for offering the largest jackpot in US history on January 2016. The Powerball, whose draw took place on 13th January 2016, was estimated at $1.5 billion. Lottery winnings in the US are subject to IRS reporting, if the amount is more than $600. If the winning is in excess of $5,000, the IRS requires a minimum withholding of 25% on the prize. The percentage does not include the wager. In Europe, lottery wins, including that of the jackpots are largely tax free. Some of the largest lotteries ever drawn in Europe include $260 million Euro Millions jackpot won on 12 July, 2011 and another $234 million Euro Millions jackpot won on 10 August 2012. Both jackpots were won by single ticket holders living in the UK.
Under the UK’s National Lottery rules, wagers are split between the government and the Camelot Group, the game operator. Camelot Group also covers prize distribution and operating cost. Prize payments for jackpot winners in the US are usually not paid in a lump sum. In most cases, the winner is offered an opportunity to choose between one-time payment and annuity payments. Winners who choose lump sum payments can expect a third of the advertised jackpot at the end of the calendar year. On the part of lottery annuities, these could take up to 20 years or longer depending on the payment arrangement agreed upon. The other forms of lottery payments in the US include insurance backup and balloon payments.