Should You Keep Your Losing Scratch Tickets?

Many individuals who purchase scratch-off lottery tickets often find themselves wondering about the potential value of non-winning tickets. While a ticket may not yield an immediate cash prize, there are situations where retaining them can be advantageous. Understanding these possibilities can help inform decisions about what to do with losing scratch tickets.

Second-Chance Opportunities

Many lottery commissions offer second-chance drawings, which provide an additional opportunity to win prizes using non-winning scratch tickets. To enter, players typically register an account on the lottery’s official website or through a dedicated mobile application.

The entry process generally involves submitting a unique code found on the non-winning ticket, often by manually entering it online or by scanning a barcode using a smartphone app. Participants are usually required to keep the physical non-winning ticket, as it may be needed for verification if selected as a winner. Prizes in these drawings can vary widely, ranging from additional cash awards to merchandise, gift cards, or even trips. The specific rules, entry deadlines, and available prizes differ depending on the lottery game and the jurisdiction, so checking the local lottery’s official website for details is always recommended.

Tax Deductions for Gambling Losses

Individuals who engage in gambling activities, including purchasing scratch tickets, may deduct their gambling losses for tax purposes. This deduction is permissible if the taxpayer itemizes deductions on Schedule A (Form 1040) of their federal income tax return, rather than taking the standard deduction. Gambling losses can only be deducted up to the amount of gambling winnings reported as income during the same tax year. For instance, if someone wins $500 but loses $1,000, they can only deduct $500 in losses.

To substantiate these deductions, meticulous record-keeping is required by the Internal Revenue Service. This includes maintaining an accurate log or diary detailing each gambling session, including the date, type of gambling activity, location, and the amounts won and lost. Losing scratch tickets serve as evidence of losses and should be retained alongside any other relevant documentation, such as wagering tickets, payment slips, or bank statements. This information is general guidance; consulting a qualified tax professional is advisable for specific tax situations.

Proper Disposal

Once a scratch ticket is confirmed as a non-winner and is no longer needed for second-chance drawings or tax documentation, secure disposal is important. Losing tickets can contain unique identifying numbers or barcodes that should ideally not be freely accessible. Shredding or tearing the ticket into small pieces before discarding it can help prevent any potential misuse.

From an environmental standpoint, the recyclability of scratch tickets is often limited. Many scratch-off lottery tickets are constructed from multiple layers, including paper, plastic films, and metallic foils, which can make them difficult to process in standard recycling facilities.

While some lottery commissions indicate that their tickets are recyclable, it is generally recommended to check with local municipal recycling guidelines. If a ticket cannot be easily torn to confirm it is only paper, it is likely not recyclable through typical curbside programs.