Earlier quoted context omitted.
> You're paying income tax, not sales tax, because winnings are income. (Think about professional gamblers...) Think about them why? Gambling income is in a completely different category from a prize you won for free. There's no reason they have to be taxed the same.
> Gambling income is in a completely different category from a prize you won for free. The only difference is that as a professional, you're filing your taxes as a business. It's still "income"[1], it's just the entity filing is a business rather than a specific person. Regardless, a prize you win is not taxed as a sale. > There's no reason they have to be taxed the same. To the extent they're treated inconsistently,…
In gambling, you're putting money into the system, possibly applying skill, and getting money back out.
With free prizes, you're just being given things with nothing in return.
That's a big difference. And not one that you can effectively game. It's very clear whether you're inputting money or not.