This is one of the most important questions that you should ask yourself before you claim the prize in case you hit the jackpot.
Suppose you have hit a jackpot in one of the casinos in Vegas by playing over a pokies machine. You are all excited and wait for the announcement by the casino to offer you the grand jackpot prize.
What are the winning payment options you can choose?
Most pokies companies give winners two ways to receive their money. The choice you make could have important tax implications. One is the lifetime payout and other is in lump sum. See the difference below
Lifetime payout is a set annual payout for a certain number of years. For IGT, maker of Megabucks, it’s 25 years. On a $33 million jackpot, that means an annual payout of about $1.3 million and an annual tax bill of $525,000. That’s just more than $13.1 million in taxes over the span of the payout.
If you choose Lump Sum winners have 60 to 90 days to decide whether you want a lump sum or lifetime payment. If you opt for a lump sum, you’ll have to deal with a hefty interest rate. That’ll leave you with 60 percent of your jackpot. But don’t forget: you still have to pay the government. From the remaining $19 million, the IRS will demand another 40 percent, leaving you with about $12 million.
Here you take the example of playing the Megabucks pokies machine at one of the casinos in Las Vegas. You can easily find this pokies machine in all of the major casinos throughout the state of Nevada as they all are tied together. The progressive starts at $10 million and any progressive pokies machine always play max coin in so Megabucks would be $3 per spin.
So that means Megabucks is a Dollar coin Pokies Machine that must have 3 coins ($3.00) played to hit the jackpot. The jackpot is reset to $10,000,000.00 after a jackpot is hit. Not only is this almost certainly the largest jackpot pokies in the world, but it was also the first one to link machines from many different casinos in an effort to generate the largest reward possible.
Now imagine you just hit a $33 million jackpot on Megabucks. If you’re lucky, you’ll see half of that after taxes. How you choose to receive your payout helps determine exactly how much you’ll cash in after winning the jackpot. Here are the things you should consider before you ask as how to get yourself paid your winning amount.
10 things casinos does before rewarding you the Jackpot amount
Remember that there are few things that the casino staff does before it declares you the Jackpot winner. Here find those ten things specifically done by casinos when you win a jackpot in Vegas casinos.
- The casinos call the Jackpot SWAT Man
SWAT is a term used for special weapons and tactics a term used for law enforcement units. Here they are referred as Jackpot SWAT man who work with gaming companies like Bally Technologies. An example is one of EJ Coyle the SWAT man who is attending to calls in case there is a jackpot winner at the casinos. According to Bally business analyst by day, he’s the company’s first responder when it comes to big wins. He is one of a four-man team that responds to million-dollar-plus jackpots players hit in Southern Nevada.
If you now worried as what the SWAT man will do with you at casinos just relax. He is out there to deliver the wins when you hit a jackpot.
2. Casino monitor the pokies machines that have hit the jackpot
When a player hits a jackpot worth more than $1 million, casino bosses call a Bally control center where technicians monitor the company’s pokies machines on computers. A technician confirms where the jackpot hit and calls SWAT man or another responder.
3. Casinos prepare the winning cheque
The casino SWAT man or in this example Bally technologies EJ Coyle typically heads to Bally headquarters on Bermuda Road before heading to a casino. There he has to pick up an oversized check for the winner. Bally designs them with logos from specific games: Michael Jackson, NASCAR, Betty Boop. If he’s lucky, Coyle already has the check in his car. He keeps an armful handy, just in case.
4, Casino staff looks for the original winner
At the casino, the staff has to find the winner. It’s usually pretty easy, since crowds tend to form around winning machines. Also some ID proof is enough to claim that you are the exact winner.
The casino will not even be involved in a pokies jackpot unless it is $1200. If you win less than that you just have the credits added to your total so that you gamble again.
Also remember that the clearance of winning amount varies from casino to casino so you should read their policy terms before you enter to play.
5. Casinos pay only after proper verification of winning machine
A casino technician verifies the jackpot and confirms that it was valid. Casinos won’t pay on a machine that malfunctioned. Also the casino looks if anyone has hacked or tempered with the game play and won with unfair means. It will only pay the jackpot win if the play was fair win.
6. Casino demands certain documents to clear the winning amount
You can call this paperwork but winners have to provide with their valid Social Security number to collect their winnings and a bank account number so the cash can be wired. Winners can choose to take a lump sum payment or monthly payouts, typically spread over 20 years. All this is discussed with the casino staff.
7. Within 24 hours casinos pay one twentieth of Jackpot wins
Within 24 hours of hitting a jackpot, all winners automatically receive one-twentieth of their money wired to their bank account. That’s so they have plenty of cash on hand to continue to gamble again at the casino if they are thirsty for more wins (remember you might lose too in this hunger for wins)
8. Casino and their finance department delivers a real check
Once all the paperwork is filed, the casinos finance department process it and wire the money to the winner. Sometimes, a representative delivers a real check. As for the giant commemorative checks most winners don’t keep them as they are too much of a hassle to transport.
9. Casino staff interviews the winner
After presents the check to the winner the casino interviews them about why they’re in Las Vegas and how they plan to spend their winnings. Many casinos organise a press meeting in case of a big jackpot win or organise a grand event. But most winners want to remain anonymous and collect their money without a big show.
10. Casinos propagate the jackpot win their promotions
To attract more customers to their casinos the staff propagates the jackpot win in their promotional messages. While this is a marketing aspect of the casino it lures many more players to the same pokies machine that has won hoping to hit the massive jackpot again.
As said above note that paying the wins depends on casinos policy and is not same at each casino. Like at Venetian casino it does issue a cheque if requested but many casinos have other options to pay and play. Better to ask the casino staff and know their policy rules before you ask for the winning amount or engage to gamble in any of the pokies machines hoping to win a jackpot.
Finally note the Jackpot taxes. If at the casino you win $1-$1,199 you simply cash out and go. The IRS doesn’t care about jackpots less than $1,200.
But if you win $1,200 – $4,999 you’ve entered the tax threshold. You must fill out a W-2G form to report your winnings to the federals, but casinos aren’t obliged to take out withholdings. It will be up to you to pay the taxes later. However, if a winner fails to provide a Social Security number, the casino will then take out 28 percent for the IRS.
Then again if you win $5,000 or more the IRS will consider your winnings part of your income, which could bump you up to a higher tax bracket. If you hit it really big, expect to pay up to 40 percent in income taxes. For that as an example of $33 million Megabucks jackpot, that would be more than $13 million.
Also the choice is yours when you hit a jackpot on any pokies machine, as how to take your winnings in check or cash. As said above a check is usually issued for winnings with very large amounts. For multi-million dollar jackpots, a check for the partial amount will be paid to you and you are given some 90 days to decide if you want the remaining balance to be paid in full or in an annual annuity.
Now that you have understood that all winnings from any casino are subject to federal taxes. Casinos are not oblige to deduct withholding taxes on jackpots less than $5,000 as long as you can provide your social number. If not, the casino will take 28% withholding tax from your winnings.
Before you are paid your jackpot money, casinos in the United States will require that you present a proper identification because if you cannot, the casino will decline to pay you until a proper identification of yourself will be produced.
Therefore with all these things you need to consider before heading to your favorite pokies machine, it is advisable to plan first what you will do if you hit the jackpot. Also don’t forget to bring any valid ID for your proper identification when going to any casino for your own benefit.