Thursday, August 27, 2009

Which is the best lotto site for overseas purchases?

The US Megamillions jackpot stands at $325 million this Friday.

Given that I will win this, I decided to read some small print.

I normally buy through the PlayUKInternet.com network. I understand this is run by some South African ex-pats living in London and has done very well.

However, there are a number of issues to consider:
  1. Is the lottery site legit and if you won would the site pay you or disappear with your winnings?

    1. The PlayUKInternet site has an established reputation and seems high-profile and reliable

  2. What premium does the site charge over the actual ticket costs?

    1. A Megamillions ticket costs $1 if bought at a retailer in the US.

    2. PlayUKInternet and other agency sites charge a premium for their services. Overseas residents cannot buy from in-country retailers, so agencies have people who stand in queues, process winnings, etc. This premium varies.

    3. PlayUKInternet charges £2,40 per ticket for a US Megamillions draw. They do give one voucher for every five tickets bought, effectively dropping the price to £2. That's $3,24, a premium of 224%.

    4. OSA charge a whopping €3,60 per ticket. That's $5,13, a premium of 413%!

    5. Betslips.com charge $2 per ticket, a premium of 100%

  3. Does the agency have any discretion over my winnings payout?

    1. PlayUKInternet take 10% of winnings awarded through them. TEN PERCENT!!!! They also have the discretion as to whether to take the winnings as an annuity or lump sum. This is only evident through reading the fine print in their terms and conditions

    2. Betslips.com takes 1% of winnings. This is also only apparent by reading their FAQ.


Clearly the fine print here is important. Imagine winning the $325 million and being forced to take the lump sum payout of $204 million. I'm not sure how the percentage paid to the agency is determined (this is not clear from their terms and conditions). I would imagine it is based on the net payout. That would be $204 million less US withholding tax of 30% equals $140 million. 10% to PlayUKInternet would then be $14 million. But if calculated on a gross basis, it could be $20 million or $32,5 million. You would have to pay local taxes - let's say 6% if you were a resident of New York - although as an overseas resident it might well be higher. That moves your take home winnings towards $100 million.

Of course $100 million is a huge amount of money, but why would you want to pay the agency anything more than their cost of administration? Why do they deserve any percentage of your winnings?

For this reason, I bought through Overseas Subscribers Agents - osalottos.com, despite their astronomical cost per ticket. That way, when I collect my winnings, I'll not be paying them any more.

Sheeesh. Read the fine print....

3 comments:

sheraz said...

None of these sites are reliable..Trust me! Check out their business addresses on google street view and you will either see some abandoned house or an empty office. They all operate discretely and don't want their identities exposed.( Just ask the full name or a picture of their Managing Director) The day you hit the big one, the sites will be down and all those scanned copy of the ticket, Insurance through some blue chip insurers etc would be worthless. In UK, Camelot would only pay to the ticket holder and would not give a toss about what evidence you have. After-all, they never encourage us to play through these bogus sites anyway. The small amount is payed to gain your trust and then eventually ( after hitting the big one) screw you big time. My advice is, forget the big jackpots and stick to your country's lotto.

Peter said...

For a fact I know that there are some reputable companies out there. www.lukilotto.com (Lottery UK International) has been in business since 1998 and is a UK registered company and all of their details can be found. They help international players participate in overseas games and lotteries and their process has been approved by independent lawyers.
They are not a ticket re-seller but do charge a fee for their services. Of course this does seem a lot compared to the face value of the ticket but if it is safe, secure, legal and you can guarantee your winnings will be paid to you there has to be some charge.
How do I know this? Because I am the Director of this company and we are working hard to create a trustworthy safe environment in which to play the lotteries.
Unfortunately there are many unscrupulous businesses on the internet and as sheraz says check out the company first before making any decisions.

Teza said...

Hi, Peter..you said www.luklotto.com is reliable site, but i have a doubt that this site is also a scam. If you were player i would have believed you but you are the admin of the site. How can you prove that your site is legit?