A hole in one prize at your local charity scramble is almost never paid by the golf club, the sponsor, or the guy who handed you the scorecard — it is paid by an insurance company that was hired weeks earlier and priced the risk down to the yard. That car sitting on the tee box is a marketing prop.
The money behind it is a prize indemnity policy, a niche insurance product that Wikipedia’s prize indemnity entry describes as one of the oldest and most common forms of the coverage.
The numbers are what make it work. According to the National Hole-in-One Registry, cited by Golf Digest and the PGA, the average golfer’s odds of an ace are about 12,500 to 1, and a hole in one prize contest typically lasts one day with a hundred or so players. Insurers like US Hole In One and Perfect Golf Event publish quotes showing a $10,000 prize with 100 golfers running roughly $246 to $329 in premium.
So the organizer risks a few hundred dollars to advertise a five- or six-figure hole in one prize, and the insurer collects hundreds of those premiums for every one it has to pay. Below is how the whole arrangement works, what the fine print requires, why golfers occasionally end up in court over it, and what the IRS says happens after somebody actually wins.
Who Actually Pays the Hole in One Prize
The chain runs like this. A tournament organizer wants a headline prize. Instead of buying a car, they buy a policy from a prize indemnity underwriter. If a qualifying ace happens, the insurer pays the prize — usually cash equal to the vehicle’s value, or the vehicle itself through a dealer arrangement. US Hole In One’s own explanation of its product states plainly that the insurer pays the prize and the insured pays only a fraction of that amount as premium.
Car dealerships are often the visible sponsor, and American Hole ‘n One publishes a dedicated FAQ for auto dealers explaining that the dealer buys coverage rather than absorbing the loss. That is why the same dealership can back a hole in one prize at a dozen events a summer without flinching.
What a Hole in One Prize Costs the Sponsor
Pricing depends on four things the insurers all list: the prize value, the number of players, the yardage of the insured hole, and the skill level of the field. Published quote pages from Hole In One International and US Hole In One put typical coverage in the range of about $99 to $1,000 for common club-tournament prizes.
Here are the verified figures in one place.
| Figure | Amount / Odds | Source |
| Average golfer’s odds of an ace | 12,500 to 1 | National Hole-in-One Registry (via Golf Digest, PGA) |
| Low-handicap player’s odds | about 5,000 to 1 | National Hole-in-One Registry |
| Tour professional’s odds | 2,500 to 3,000 to 1 | National Hole-in-One Registry |
| Frequency across all rounds played | 1 ace per ~3,500 rounds | National Hole-in-One Registry |
| Two aces by one player, same round | about 67 million to 1 | National Hole-in-One Registry |
| Two aces in the same group, same day | about 17 million to 1 | PGA.com |
| Premium, $10,000 prize / 100 golfers | $246–$329 | US Hole In One; Perfect Golf Event quote pages |
| Typical premium range | $99–$1,000 | Hole In One International; US Hole In One |
| 1099-MISC prize reporting threshold, 2025 | $600 | IRS rules as reported by Verrill, Reed Smith, Venable |
| 1099-MISC threshold, prizes after Dec. 31, 2025 | $2,000 | One Big Beautiful Bill Act, as reported by the same firms |
The Fine Print That Decides Whether You Get Paid
Every policy has conditions, and they are not decorative. US Hole In One’s published terms set a minimum shot distance — commonly 150 yards for men and 130 for women, with the exact number written into the contract. Play the wrong tee marker and the shot may not qualify, no matter how perfect it looked.
Witness requirements scale with the prize. US Hole In One’s posted rules require one non-playing adult observer at the hole for prizes from $2,000 to $59,999; two non-playing adults, one at the tee and one at the green, from $60,000 to $150,000; and for prizes above $150,000, two observers with one being a PGA Professional or a police officer.
There is also an amateur-status clause. Golfers certified as professionals by the PGA or a comparable body are generally excluded from winning an insured hole in one prize. That single line has produced some of the loudest disputes in the business.
When a Hole in One Prize Ends Up in Court
In August 2023, golfer Linda Chen sued after acing the 11th hole at a charity fundraiser at Isleworth Golf & Country Club in Windermere, Florida, where a roughly $90,000 Mercedes-Benz E-Class was advertised. As reported by Golf Digest, WKMG and Carscoops, the organizer denied the claim on the grounds that she had played professionally in the mid-1990s; her attorneys said she had regained amateur status with the USGA. She filed for breach of contract.
Other reported cases turn on the same kinds of technicalities. CBS Boston reported that Dan Fialho sued over a car at a Rockport Golf Club tournament after the dealership said his shot was not played from the correct tee. In Arkansas, Austin Clagett sued a country club and dealership after an ace at Morrilton Country Club did not produce the promised Ford F-150.
None of that means anyone acted fraudulently — these are contract disputes over eligibility and setup, and the published reporting describes claims, not proven wrongdoing. The lesson is simply that the rules sheet, not the banner, defines the prize.
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Taxes on a Hole in One Prize
Prizes are income. Under IRS rules, the fair market value of a prize is taxable to the winner whether it arrives as cash, a car, or a trip, and the winner reports it on their return even if no form is issued. Legal analyses from Verrill and Reed Smith note that the Form 1099-MISC reporting threshold for prizes was $600 for 2025 and rises to $2,000 for prizes awarded after December 31, 2025, with inflation adjustments starting in 2027.
That is a change worth knowing about: a sponsor may not send a form on a $1,500 hole in one prize awarded in 2026, but the value is still reportable income. How any of it applies to your situation depends on facts only a tax professional or IRS.gov can sort out for you.
The Odd, True Details Behind the Business
A few things surprise people. Insurers routinely cover the “second prize” holes too, so a single event may carry several policies. Lloyd’s of London, the market famous for insuring a pianist’s fingers, has also written coverage on aces at professional tournaments. And the odds gap between skill levels is smaller than you would guess — 12,500 to 1 for an average player versus 2,500 to 1 for a tour pro is a five-fold difference, not a hundred-fold one.
Sponsored contests at pro events are structured differently again. Business Wire’s 2024 announcement of Jani-King Southwest’s $100,000 hole in one prize contest at the WM Phoenix Open directed $90,000 to Thunderbird Charities and $10,000 to the caddie — the player, already a professional, was not the one collecting.
Frequently Asked Questions
Does the golf course pay the hole in one prize?
Usually not. The organizer or sponsor buys a prize indemnity policy, and the insurer pays the qualifying claim. The course typically just hosts the event and helps set the tee markers.
Why do these contests have a minimum yardage?
Distance drives the odds, and the odds drive the premium. US Hole In One’s published terms commonly set 150 yards for men and 130 for women, with the exact figure written into each contract.
Can a former professional win a hole in one prize?
It depends entirely on the contest rules and the insurer’s definition of amateur status. That exact question is at the center of Linda Chen’s 2023 breach-of-contract suit over a Mercedes-Benz in Florida.
How rare is an ace, really?
The National Hole-in-One Registry puts the average golfer at 12,500 to 1, with roughly one ace per 3,500 rounds played. Two in one round by the same player runs about 67 million to 1.
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Sources & How to Verify
The facts on this page are drawn from official government and primary sources. Rules and figures change, so always confirm the current details with the official agency or the promotion’s own published rules.
- FTC Consumer Advice: consumer.ftc.gov — prize, sweepstakes, and lottery scam guidance
- IRS: irs.gov — how prizes and winnings are treated as income
- Social Security Administration: ssa.gov — what SSI recipients must report
- The promotion’s official rules: every legitimate sweepstakes publishes them — the rules page is always the final word
Content last reviewed August 2026. If you notice outdated information, please contact us.
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Informational only — not legal, tax, or financial advice. Win Big Daily is an independent educational resource. Prize rules, tax treatment, and benefit-program requirements vary by state and program and change over time, so always verify the current details with the official agency, the promotion’s published rules, or a qualified professional before acting. If a topic involves government benefits, contact the program office about your specific situation.