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How Maryland regulates its lottery

On Behalf of | Sep 6, 2018 | Gambling Tax |

The state of Maryland offers a variety of lottery games that individuals can play to earn cash prizes. In some cases, those prizes will be given to a custodial parent or to the government itself. This is true for those who owe more than $150 in back support or who have an outstanding tax debt.

In fiscal 2013, there were a total of $1.756 billion in lottery tickets sold. Of that amount, $1.036 billion was given back to participants in the form of prize money. The other $545.2 million went to the state’s general fund where it was used to support education and small business. It was also used to provide funding for companies owned by women and minorities. Overall, the state lottery has generated $13.9 billion in revenue since it began in 1973. Sales to minors are prohibited, and a person has 182 days to collect his or her prize if the game is not played on a daily or weekly basis.

Individuals who profit from buying lottery tickets or other forms of gambling, including through online outlets located offshore, generally have to report those profits on a tax return. This standard generally applies whether a person is a professional gambler or just plays for fun every so often. Failure to do so could result in an audit, which may lead to financial penalties.

An attorney can help people learn more about their obligations under federal tax laws. Counsel can in many cases also be helpful by providing representation in the event that a client has been audited because gambling winnings were not reported properly.