Ok, I know it's a gambling and guessing game, where the lucky man wins a jackpot of millions.
My question is this, if the goal is for the government to collect taxes, why not just tax on the ticket purchase, and reduce the allocated prize amount? In which case, you can report the "net" amount, and make it tax free to the winner?
For example, if the jackpot is $100M, does that mean they sold 100M tickets for $1 each? If so, why not just tax the prize in advance, and declare that, if the effective tax rate is 30%, there's only $70M as prize money claimable, and the winner does not need to report any additional taxes?
Would that just make too much sense and put too many people out of business?