minyan gal- I agree with you that taxing the winnings seems unjust. The tickets are purchased with after tax dollars and a portion of the ticket price is taken by taxing authorities (supposedly to fund education, but that’s probably as true as saying FICA funds social security) so that only about half is factored into the jackpot calculation. I think it is an inconsistency in the tax code to also tax the winnings.
I guess that there is no demand for “fair play” since it is considered gambling winnings. Why should we be fair to degenerates?