The difference is that lottery winnings are liquid, you can just pay your tax burden out of the winnings.
>The employees would not be taxed just for receiving the stock/ownership, only once they sold it and made it liquid.
This is incorrect; the initial grant is income and anything after that is capital gains. This is also how RSUs work.
My sibling commentor has the workaround.
And make no mistake, that's already exactly what's being proposed here, in making EVGA an employee-owned corporation: a gift of equity from the current shareholders, to a set of new shareholders.
The only difference in what I'm describing is that there's a trust / holding corporation in between the givers and the recipients.
If this was legal all sorts of companies would do this all the time.
I'm sure they'll have to write down a lot of inventory because prices went down, but for tax purposes their valuation is still going to be very high based on earnings. That's why private companies other than startups rarely go this route.
edit: (in the US at least)
YMMV but an NQSO purchase agreement can be your friend.