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FTC: Lottery Scams



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Frequently Asked Questions
 
     
  You can send questions by e-mail to Letters@MUSL.com

WHERE DOES THE MONEY GO?

In Connecticut, profits from the state lottery drawings go to the Department of Education (about half of the proceeds do, at any rate). Where do the Powerball proceeds go? Dan S., via Internet

The profits from the Connecticut Lottery Corporation go to General Fund for the State of Connecticut. The Powerball game in Connecticut is a state lottery game. The profits from Powerball in Connecticut and from any other Connecticut Lottery game is exactly the same.

The perception that the money leaves the state is one of the most difficult concepts we have to deal with. Some lottery players actually refuse to play the Powerball game (at least until the jackpot gets big enough) because they believe that the profits go to the federal government or to some other "outside" group. In every state, profits from Powerball sold in that state go for the purposes required by state law. For example, mass transportation in Arizona; economic development in Kansas; natural resources in Minnesota; school aid and crime control in Montana; senior citizens and state parks in West Virginia; property tax relief in Wisconsin, and on and on.

Here's how it actually works. The Multi-State Lottery Association (which administers the Powerball game) is a non-profit government-benefit association entirely owned and operated by the member state lotteries. Powerball is a 50% prize payout game which means that 50 cents of every one dollar ticket is paid out in prizes. The state lottery keeps 50% as its share and then pays the rest out in prizes. The state lottery pays the cash prizes directly to the players in its state and then sends the percentage share for the jackpot prize back to the association where we hold it until there is a winner. Any state that sells a ticket keeps ALL of the profit from that ticket. The only money that is sent to the central organization is the money to pay the jackpot prize.

Sharing the cost of running a single game is very cost efficient. We know of no other lottery game more profitable for a state lottery than Powerball.


ANONYMOUS WINNERS

I was wondering about the option of remaining anonymous after a win. Is this right part of the individual state's game laws or is it part of a state's right to privacy law? Which state would have jurisdiction- the state of my domicile or the state from which I bought the ticket? Do you know which states allow you to remain anonymous? I am mostly interested in Idaho, Montana, Oregon and Arizona. Anonymous via Internet.

Is it possible to remain anonymous when collecting the money? Bruce & Sally B., via Internet.

The laws of the state where the ticket was sold will control the release of your identity. Winners do not have to appear before the press or even show up in person to get their check, but they are likely to find that the press will search them out. Only one Powerball member currently permits winners to remain anonymous (Delaware). State lawmakers want the public to know that the lottery is honestly run. To this end, most require that at least the name and city of the winner be made public. This way, the public can be assured that the prizes are being paid to a real person.


PURCHASE BY MAIL

I would like to purchase many tickets if available by mail. Is this possible? Yashio H., Sapporo, Japan by mail.

Powerball tickets can only legally be purchased through a state lottery computer system in the lottery jurisdictions that sell the Powerball game. We cannot sell tickets by mail or over the Internet.


INTERNET PURCHASES / SUBSCRIPTION PLAYS

Can I purchase Powerball tickets legally from Internet lottery tickets sites? M. Geisler, Switzerland

I would like to purchase an annual subscription to either LOTTO or Powerball for my Connecticut-based parents. How can this be done? Are "quick picks" for each game available or do specific sets of numbers need to be chosen? What is the cost? Andrew B. via Internet.

Powerball tickets are not currently available over the Internet. Any Internet lottery site that is not a member of the Multi-State Lottery Association that purports to sell Powerball tickets, or shares of Powerball tickets to purchasers are not authorized by the Multi-State Lottery Association or any state lottery. These sites are not regulated and are deemed by lotteries and state attorney generals as illegal and fraudulent and should not be trusted.

Powerball tickets are available in some member lottery jurisdictions by “subscription”. A subscription is an "off-line" purchase of a lotto play. It allows a player to safely buy lottery tickets through the mail, over the telephone or over the Internet. Government lotteries that offer subscription plays will then enter the plays onto their on-line system. This is often done in a secure environment such as a locked room with video surveillance by lottery security. This kind of security is used to reduce theft of cash that may be mailed in by players (yes, some people stuff an envelope with cash and mail it) and to control access to this type of "open" on-line system. Under general lottery rules, the subscription play becomes valid when the player receives mailed confirmation that the subscription play has been entered. Many lotteries that offer subscription plays will also notify the player if he or she has won and will either send the winnings to the player or will credit the winnings to future plays. Although subscriptions are a "slow" way to play the lottery since you have to wait for the state lottery to manually enter the plays onto the system, some players prefer the convenience of not having to leave their home and not having to keep track of winners.

Subscriptions would also be a tremendous opportunity for out-of-state players. However, federal laws make out-of-state subscription plays illegal:

18 USC 1301. Importing or transporting lottery ticket .

Whoever brings into the United States for the purpose of disposing of the same, or knowingly deposits with any express company or other common carrier for carriage, or carries in interstate or foreign commerce any paper, certificate, or instrument purporting to be or to represent a ticket, chance, share, or interest in or dependent upon the event of a lottery . . . or, being engaged in the business of procuring for a person in 1 State such a ticket, chance, share, or interest in a lottery, gift, enterprise or similar scheme conducted by another State (unless that business is permitted under an agreement between the States in question or appropriate authorities of those States), knowingly transmits in interstate or foreign commerce information to be used for the purpose of procuring such a ticket, chance, share, or interest; or knowingly takes or receives any such paper, certificate, instrument, advertisement, or list so brought, deposited, or transported, shall be fined under this title or imprisoned not more than two years, or both.

The Powerball game is offered by subscription by a few of its Member lotteries, but no Member sells plays to out-of-state players because of the above and other federal laws.

Futures plays are available . Additionally, Powerball future plays are available in most states. If available in your state, they can be purchased through the retailer terminal. You will get a single ticket good for the number of draws purchased.


BUYING TICKETS IN ANOTHER STATE OR COUNTRY.

If I live in a state not currently offering the Powerball Game, can I still play? Kailtlin D., via Internet; E. L. via AOL.

A Powerball ticket can be purchased only from a terminal operated by a licensed retailer in a state that sells the Powerball game. This does not mean that you cannot buy a ticket in a neighboring state. Laws against carrying lottery tickets across state lines apply to persons who transport them "for the purpose of disposing of the same" or, in other words, selling them to others for profit.

I am a Japanese lottery fan living in Japan who is fascinated with US PowerBall. Could you please kindly advise whether I am eligible to buy PowerBall tickets and receive the prize from USA if I am a winner? Chikao H., via Internet.

The only legal way to sell a Powerball ticket is through the terminals controlled by the state lotteries that sell the game. If you buy tickets from a state lottery terminal, you would then be eligible to receive the prize.


SPECIAL REQUESTS FROM PLAYERS

Chuck, love your FAQ section. It is very informative and concise. I have a request though for your hyperlink page which reflects the winning numbers. Is it possible to include the locale of the winning ticket when that event occurs? It would help someone like me who checks this page for the numbers and whose heart races if the winning purchase was made in the area I frequently travel to play. Thanks. Kevin G. via AOL

The Powerball home page now shows the state(s) where Grand Prize winning tickets were sold - thanks for the great suggestion! The estimated jackpot will be increased per usual procedure when a draw doesn't have a jackpot winner. When there is a winner, you will see us drop back to the starting $20 million jackpot. Some state lotteries regard the store location as a security issue and do not release the city of the winner.

 


PARTICIPATING POWERBALL STATES

Could you please send me a list of the states that participate in the Powerball game? Frank S., via U.S. Mail.

A map showing the current Powerball states can be found on our map page.


WHEN A WINNER DIES; ESTATE TAXES

What happens to prize money if the winner dies?

Lottery prizes and the right to receive future payments of lottery prizes are like any other property. If a winner dies before receiving all of the payments, the remainder of the prize will be paid to the persons named in the Will or, if there is no Will, then under the laws of Intestate Succession to the winner's surviving relatives.

There can be an estate tax problem with large prizes. As such, the IRS requires the immediate payment of the federal estate tax since it is in many cases likely that an estate may not have enough cash to pay the estate tax due. The tax is based on the present cash value of the entire prize. In this case, the Powerball game permits the estate to request the transfer of the securities held to fund the annuitized prize.

The estate can then sell all or some of the securities and use the proceeds to pay off the estate tax. The amount left over can then be distributed to the heirs. Note that there are some lottery games which do limit payments "for life". These are clearly identified in game rules and advertisements and are usually a key feature of the game ("win $XXXX a week for life").


ANNUITIZED PRIZES; LUMP SUM PAYMENT; INTEREST EARNINGS

Why does the lottery keep the interest on the prize? Shouldn't all of the money earned from investing the prize over time be paid to the winner?

All of the prize money is paid to the winner. When we advertise a prize of $25 million paid over 29 years (30 payments) , we may actually have about $13 million in cash. When someone wins the jackpot, we take bids to purchase government securities to fund the prize payout. We take the $13 million in cash and buy U.S. government-backed securities to fund these payments. We buy bonds that will mature in one year at $1 million, then bonds which will mature in two years at $1 million, etc. Generally, the longer the time to maturity, the cheaper the bonds. So you can see that the "interest" earned from the time value of the prize is, in fact, paid to the winners. When you see an estimated jackpot prize, we are estimating both what the sales and the market's bond prices will be. As this can be a tricky proposition, the estimated versus actual prizes amounts can be (and usually are) slightly different.

Changes in Federal Tax law allow you to choose payment option AFTER winning.

We were part of a group lobbying Congress to change the tax code to permit lottery winners to have the option to make their payment election after they win the prize. Today's winners can now hire financial advisors to help them decide which payment option is best for them. All systems will soon turn off the requirement that a player make the payment decision before buying a ticket.


CROSS VALIDATION; TICKET CASHING ACROSS STATE LINES

I bought what turned out to be a winning Powerball ticket in Indiana while vacationing. Can I cash in the prize in any other state that also sell Powerball(say, Georgia)?. Saptoyo S. via Internet..

A ticket must be cashed in the state it was purchased in. Although the Powerball game has a common jackpot prize pool, it is actually a state lottery game and is run on the separate computer systems of each state. After the drawing, all plays are processed and winning tickets are posted to a state system validation file. When a ticket is validated (cashed) in a certain state, it is recorded on that state's central computer as a validated cashed ticket so that the ticket cannot be cashed a second time and the retailer's account can be credited.

To permit validation in any Powerball participating state, a secure network to instantly relay the validation information across all systems would need to be created. This would have to be in place not only to permit ticket cashing, but also to keep track of tickets that have been cashed. The time it takes to cash a ticket would also increase since each state system would have to be notified (and appropriate confirmations made) before the cashing could take place. Since the majority of tickets are cashed in the state they were purchased in (usually at the same store), it has not become a problem that requires such a costly solution (in both time and money). To make the issue even more complicated, there are currently three different vendor computer systems used by the various state lotteries. Even the systems developed by the same vendor do not use the same hardware, software, or even the same file structures.


PRIZE POOL PERCENTAGE; SET PRIZE VS. PARI-MUTUEL PRIZE

Is the jackpot paid as a fixed percentage of the prize pool or is it paid based on what is left after all lower-tier prizes are paid? Saptoyo S. via Internet.

The Powerball game is actually two lottery games in one. It is a big jackpot game with an average prize of $33 million and a cash game with eight cash prize levels, including the second prize of $200,000 in cash. Of every dollar played, about 30% goes to the jackpot and 20% goes to pay the cash prizes. The second half of your question identifies the problem that a lottery has with paying set (or fixed) prizes instead of pari-mutuel prizes. In the Powerball game, all cash prizes are set prizes.

We may statistically expect to have 10 winners of the $200,000 prize for a particular drawing, but we may actually get 40 winners. With a pari-mutuel prize, the lottery simply divides the available prize pool among the winners. In a set prize game like Powerball though, we have to come up with the cash to pay those prizes. Although the payouts should run pretty close to the statistical design of the game over the long term, we do maintain a cash reserve to ensure that we can pay the winners at the set cash prize levels. State lotteries that join in the game are required to contribute to this reserve.

Despite this reserve, it is conceivable that unexpected wins exceed our reserves. Please note the fine print on the Powerball game brochure that covers this situation. It says that, in rare cases where unexpected wins exceed our reserves (and our embarrassment at having to pay less than the published prize amount), we may actually have to pay a prize as a pari-mutuel prize. This has never happened to date.


UNCLAIMED PRIZES

How many tickets go unclaimed within a year (I think that's the required time)? Have any 2nd tier, 3rd tier, or even jackpot prizes gone unclaimed? I assume a few of the smaller prizes do because people may not think they have won by only matching a number or two. Darin H., via Internet.

Since each state lottery keeps the amount needed to pay their lower-tier prize winners under our multi-state structure, we don't know the exact number of unclaimed prizes. As you have guessed, the smaller the prize, the higher the percentage of unclaimed prizes (there are still quite a few unclaimed 2nd tier prizes though). The lotteries have reported that about 30% of the $1 prizes go unclaimed and about 12% of the total prizes go unclaimed.

If a prize is not claimed, then each lottery will treat that money in accordance with their state law or rules. Some lotteries are required to return the money to the players as prizes (you may have seen such things as a special second-chance drawing, etc.). Other lotteries can return the unclaimed prize money to the state's general fund. The claim period is set by each state lottery. It varies from 90 days to one year.


IMPROVE YOUR CHANCES OF WINNING?

How do you react to all the people out there making money off 'systems' that supposedly increase one's chances of winning the lotto? I've had enough mathematics/probability to realize that wheeling and any other strategy will not increase the expected value of a ticket and that you can expect to take in the same profits if everyone did follow some sort of strategy. Darin H., via Internet.

We work very hard to ensure that the numbers are truly random. Besides making sure that the balls are equal in size, weight, and density, we also randomly rotate between four ball sets (a total of eight sets for the two colors) and two draw machines for each color. We chart the results of the drawings and the pre- and post-draw tests to watch for any behavior that falls outside of statistical expectations. If a ball set does fall outside of our very unreasonable standards for randomness, we pull it and test it with a greater number of ball drops to ensure it is random. In addition, each ball set is put through very precise measurement by a government lab and is X-rayed at least annually.

We've listened to callers explain their theories which include everything from star charts to communication with the microscopic living entities that exist in their software program. One constant letter writer insists that, when properly charted, our winning number combinations form connect-the-dot pictures of animals (of course, he only connects certain dots). When all is said and done, we are satisfied that the drawings are as random as a human being can make them. We can, however, guarantee that you will double your chances of winning if you buy a second ticket.


INCOME TAX; WHICH STATE TAX APPLIES?

Is federal tax taken out of the check before you receive it? What percent would you actually receive after taxes? If $25 million were won, for example, what would be received in the annual check? Bruce & Sally B., via Internet.

Yes, federal tax is deducted from your lottery winnings before you receive your payment. You can think of lottery winnings just like other income - except you don't have to work for it. Powerball winners will receive their prize payment in one lump sum or in a number of periodic payments depending on their election. In either case, the lottery jurisdiction will withhold 25 percent of the payment for Federal income tax withholding. A Form W-2G, "Certain Gambling Winnings", will be sent to Powerball winners in January of the following year, reporting the total prize payment and the Federal income tax withholding amount. The total payment in Box 1 of Form W-2G should be reported on the "Other Income" line on the Form 1040, U.S. Individual Income Tax Return. (Note: As with all financial matters, we recommend that proper professional advice be sought before any action is taken.)

Most states also have an income tax. The amount withheld by any given state will vary, but will be handled very much like taxes on wages. The amount you receive after taxes will depend upon your tax return. The federal tax and state tax that is withheld is just the starting point. If you have a lot of charitable or other deductions you could be looking at a refund. It is more likely, however, that you will have to pay additional tax. Powerball jackpot winners tend to fall into the top tax bracket which is higher than the minimum withholding percentage.

The Powerball prize is paid in equal payments. On the $25 million prize in your example, you would get a check for $1 million dollars each year less the federal tax withholding and less any other tax withholding that may be required by your state. You would receive a slightly larger payment for the first year since we buy securities to fund the annuitized prize. Since these securities must be purchased in increments of $1,000, any cash that is left over is added to the first payment to the winner.

If I live in a state that doesn't have a lottery, and I win the Powerball, do I have to pay taxes in both states? Also, say I win and move to the state I win in BEFORE turning in the ticket. Do I still have to pay taxes in the first state? Margaret F. via Internet.

This kind of question is best directed to a law firm or a CPA firm. We cannot hold ourselves out as one who gives legal or financial advice so please be advised that our comment on questions like this is worth exactly what you pay for it ($0). Laws will vary by state, but many states have a tax reciprocity law to figure out which state will collect the state income tax. Generally speaking, you shouldn't have to worry about paying state income taxes in more than one state. The issue is not settled however. There are cases in court that hope to resolve these questions. In a February 1995 decision, the Ohio Supreme Court decided that a Kentucky resident who won the Ohio Lottery and then moved to Florida owed state income tax in Ohio - the state with the most logical connection to the income. You might guess that some of our big Powerball winners move to a state with a warm climate or to a state with no state income tax. Where you want to live becomes a simpler question once you aren't tied to a job and have the financial freedom to hop on a plane to visit friends and relatives.


NEW GAMES; NEWSLETTER

I enjoy playing Powerball and would like to know if you are planning any new multi-state games. Do you have a multi-state lottery news letter? Anthony C., Kansas City MO by mail.

There are always new game ideas offered and being considered by the lotteries. The lotteries will offer the games that they see fitting into their product mix. Although we don't yet have a MUSL newsletter that is available for the public, you can subscribe to our Winning Numbers e-mail.


LIMITATION ON TOP PRIZE

I don't think that the Powerball Lottery jackpot should be allowed to go above ten, or perhaps twenty million. Once the jackpot were to reach this limit, drawings could continue to occur until a winner was selected. This would develop more interest in the Powerball game and participants would feel their chances of winning would be greater. It surely would "spread the wealth". Hazel B., Missoula MT via mail.

For a $15 million jackpot draw we sell about $12 million. For a $20 million jackpot we sell about $13.5 million. With a $100 million jackpot we sell $25 to $50 million for the draw (depending on time of year and other factors). Now imagine that your job is to raise money for various public projects by selling lottery tickets. Would you limit the jackpot size to $20 million? Many people write to suggest that we limit the size of the jackpot or that we split up the jackpot and give it away to a number of people. The truth is that there are many people who do not even think about playing Powerball until the jackpot rises to $40 million or $80 million or more. Even at $100 million we get calls from first-time players asking how to play the game. We exist to raise revenue for the member states (and do it, we hope, in a much more enjoyable way than by taxation). Those who play at the $10 million jackpot level generally still play at the $100 million jackpot level. Larger jackpots only bring in more players and more dollars. Of course, we do listen to our players (Powerball was created after listening to what players wanted in a lottery game) and welcome all comments and suggestions.


SHARING OF PRIZE; GIFT TAX

Can the Powerball winner designate additional recipients, such as family members? Roger B. via Compuserve.

Prize claims are handled by each state lottery that sells the game. State prize claim rules will vary, but states generally prefer to issue one check and withhold taxes for one person. Note, however, that some state lotteries will issue separate checks and withhold amounts for any number of persons that share in a prize.

Your question seems to suggest that a winner may decide, after winning the jackpot, to share the prize. You should be aware that to avoid the Federal Gift Tax, the persons who are splitting the prize must have agreed to share in the purchase price of the ticket before the win. Most people are not aware of the Gift Tax. When a person dies, the Federal Government collects an Estate Tax (payable by the estate) on the assets of the estate. It would be an easy thing to avoid the Estate Tax by simply giving the property away shortly before death. To close this loophole, the Federal Government also assesses a Gift Tax payable by the person making the gift. If a winner decides to give half of the winnings to a third party, the winner will be charged with a Gift Tax on the half of the prize he or she gives away (at rates up to 55%). In this scenario, the winner is still liable for the income tax on the entire prize.

Players planning to split a prize should be sure to have evidence of that intention so the IRS will not levy an additional tax for making a gift. There are some minimum amounts that can be given away without incurring the Gift Tax, but Powerball winners can afford to give gifts that can quickly reach the maximum Gift Tax percentage.


COMPUTER PICKS

Do you know if winning numbers are usually "quick picks" or specifically chosen? Roger B. via Compuserve.

Of the first 59 winners in the Powerball game, there were 41 winners (about 70%) who won using Quick Picks (or Computer Picks or Easy Picks). The remaining 18 winners chose their own numbers. Does this mean that you are more likely to win with a computer pick ticket? Maybe. Seventy percent of Powerball tickets are purchased with computer pick numbers. It may just be that the number of computer-pick winners is comparable to the number of computer-pick purchases.


FUTURE PLAYS; TICKET REDEMPTION TIME

I am currently playing Powerball through a friend in Arizona. The sad thing is that I can only buy a maximum of 10 draws at one time. Is there any state in which I can buy Powerball for 52 draws at a time? John A. via Internet.

Each state lottery selling the Powerball game has the option of deciding such things as its ticket redemption time and the number of plays offered as a future play. Most states offer future plays for between 5 and 10 weeks (10 to 20 draws).


DRAWING EQUIPMENT; DRAW MACHINES; BALL SETS.

Visited your great home page, nice work. Looked at your FAQ but didn't find what I am looking for. What device(s) are used to draw the numbers? Computer? Plastic balls in an air machine? Rubber balls in a gravity machine or what? Does the commission make changes to the mechanical system? What Kind? How Often? Dale M. via Internet.

The Powerball numbers are drawn using two Halogen drawing machines -- one for the white balls and the other for the red balls. The balls are hard solid rubber balls that meet our exact specifications for size, weight and density. The numbered balls are placed into loading tubes in consecutive order and during the show are dropped into a plastic drum and mixed for at least 5 seconds. A turntable propels the solid rubber drawing balls, for a lively mix, and the winning balls rise on an illuminated shaft. We use four sets of white balls and four sets of red balls. One set of each color is randomly selected to be used for each drawing.

I thought the balls were changed more frequently. Don't they suffer damage from bouncing off each other and the plastic drum twice a week? I remember having a super ball when I was a kid, it had chips all over it. And are the solid white/red or painted? Doesn't the paint chip? Cynthia C., via Internet.

The balls seem to last without any apparent damage. We have to change them at times due to discoloration, typically yellowing, that occurs over time. The balls are hard rubber and are colored all the way through. The numbers are painted on but we don't have any trouble with the paint coming off. Our original balls cost $100 apiece and were made under pretty exacting specifications for size, weight, density, and durability. Competition and improved technology has brought the price down to around $50 but they can be expected to last longer than a dime-store ball. I had a super ball too. I guess that dates us (unless they made a comeback sometime later).

Do you use only one set of white balls and one set of red ones or do you rotate different sets in drawing the numbers for the Powerball game? Dale M., via Internet.

We use four sets of white balls and four sets of red balls. The ball set to be used at a particular drawing is randomly selected by the Drawing Manager and the security official (a city police officer hired by some of the member lotteries). The selection is observed by an independent auditing firm.


WHERE IS THE DRAWING HELD?

Could you please answer two questions for me: 1) Date, time, and place of 1st Powerballdrawing? 2) Time and place that the Powerballis drawn each Wednesday and Saturday? Thank you. Ron G. via Internet

The first Powerball drawing was held on April 22, 1992, at 10:59 p.m. Eastern Time at ITC Studios in West Des Moines, Iowa. The Powerball drawing is currently being drawn at the same place and time every Wednesday and Saturday night unless we are on a remote drawing. We usually do several remote draws each year.


DO THEY TAKE OUT BACK TAXES, CHILD SUPPORT, ETC?

I read on another lottery page that state lotteries check each jackpot winner's background for child support payments due, past due tickets, outstanding warrants, back taxes, etc. Is this true? What is the process jackpot winners go through when they go to lottery headquarters to claim their prize? Mindy M., via Internet.

Many state lotteries are being required by their state legislatures to deduct any money owed to the state before paying out lottery winnings. It started several years ago and the concept is sweeping the states as an easy way to get back money owed. Back child support and unpaid taxes are both likely deduction areas, but it will vary by state.

Jackpot winners need to claim their prize at the central lottery office in the state where they purchased their ticket. The ticket is verified on the computer system through a number of different checks. The lottery usually gives some advice on seeking financial and legal advice along with some practical advice like getting an unlisted phone number and leaving town for a while. All but a very states have laws that require the lottery to make public the name and city of every winner (to assure the public that there are real winners). The lottery will ask the winner to participate in a press conference. Most take that option. It really is a good idea to get it over with since the press is likely to hound you anyway until they get some questions answered. In the Powerball game, it takes two weeks to gather the money from the member lotteries to make the first payment.

The winners are usually in a state of semi-shock and everybody treats them very gently. Almost all winners check their tickets several times and have friends make repeated checks. They typically don't really believe it until the moment that the security officials come into the director's office and confirm that the ticket is a winner. The winners usually wait for about 45 minutes in the director's office chatting while the security checks are being done. Although the whole process can be completed in a hour or so, the winners usually end up spending most of the day at the lottery. Most lotteries take them on a tour, spend time answering questions, bring in a lunch, and hold the press conference.

When a person wins the Powerball, is it true that there is a search done to see if that person has ever been on welfare or unemployment, etc., and if they have been, that half of their winnings are confiscated by the state that paid them? Can you send me the rules on this? Frank S., via U.S. Mail.

While it is common for states to require lotteries to withhold amounts owed to the state for such obligations as child-support payments, unpaid taxes, unpaid fines, etc., we are only aware of one state that requires a deduction for welfare payments. We understand that the State of New York will now deduct up to half of a person's lottery winnings to pay back welfare payments previously made to that person. Although this plan has received popular support, it is an entirely new treatment of welfare payments. It is certainly reasonable to deduct payments from lottery winnings, tax refunds, or even wages to pay back unpaid taxes or other legal debts, but before this action by the State of New York, welfare payments have never been treated as a debt that must be repaid.

Does this mean that a person who was once on welfare, but now has a job, can be forced to pay back the welfare payments? This is likely to be a much-debated issue. Since the Powerball game is not sold in the State of New York, there are no deductions for welfare that may have been paid in New York. The Powerball game is operated under the laws of the local state lottery and the same laws that apply to the local state lottery will apply to the Powerball game as sold in that state. If a state does adopt a law requiring the lottery to make a deduction for past welfare payments, then the local lottery must make that deduction and return that portion of the winnings to the state.


CLAIM PERIOD; WAITING TO CLAIM A PRIZE

What is the time limit a jackpot ticket holder has to contact the Powerball offices and how long can he/she wait to turn it in pick up his winnings?

This question is to settle a argument based on this scenario. A person has a winning Powerball ticket for say 60 million dollars, he waits a week to call the Powerball offices. He contacts the office and verifies the winning ticket over the phone but says he doesn't want to pick up the prize money until his divorce is final. This is approximately one year from his call to the office. Steven B., via Internet.

Each state lottery that sells Powerball tickets can set the time limit claiming the prize. The following states use a 180-day claim period: AZ, CO, ID, IN, KY, LA, MO, MT (MT actually says 6 months), NE, SC, SD, TN, WV, and WI. There is a 90-day claim period in NM. The other states have a claim period of one year (CT, DE, DC, IA, KS, MN, NH, OR, PA and RI).

Under your scenario, the ticket holder would have to actually turn over the ticket and claim the prize within the claim period. The clock starts running at the draw day, not the day that the winner calls the lottery. The issue may be moot however, since the spouse would likely have a valid claim on a share of the prize -- even if claimed "after" a divorce. The right to claim the prize during the marriage is likely to be the deciding factor, not the actual claiming of the prize.


WHO SUPERVISES Powerball?   CAN YOU PLAY?

What company supervises the Powerball winning number selection? Is it true that any employee of such company cannot accept the prize (in the unlikely event of picking the winner numbers)? Liz F., via AOL.

The Powerball game is sold through the state lotteries just like any other state lottery game. The Multi-State Lotter Association performs administrative, financial, and other services to run the game. The directors of the member state lotteries sit on this association's Board of Directors. It is true that none of us can play the Powerball game. For that matter, we are prohibited from playing any lottery game (even instant scratch ticket games) in any member state. In truth, there are enough safeguards that we couldn't turn ourselves into winners. Eligibility stipulations aside, it would be pretty difficult to explain to the public how a Multi-State Lottery Association employee just won a $100 million Powerball prize.


DISCLOSING NAMES OF WINNERS / PRESS CONFERENCES

Are winners of the Powerball jackpot required to divulge their names and give a press conference after they win?

Most state lotteries are required to divulge the names of their winners to help ensure the integrity of the games. Winners are not “required” to perform press conferences, however, they are generally recommended. It gives the winners a chance to answer the usual questions without the Press having to “hunt them down”.

 
     
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