How Do Casinos Pay Out Large Sums Of Money?
Land-based and online casinos take in lots of money from gambling each day. Therefore, you might think that casinos would pay jackpots and other big wins immediately. The reality, though, is that casinos may take longer to deliver some wins versus others-especially the multimillion-dollar variety. Casinos may not even be the ones actually making the payouts in some cases since developers are also involved. That said, you might have questions about how casinos make large payouts. The following page answers common questions on this matter and explains what happens if you win big.
Do Casinos or Software Developers Pay Jackpots?
A common misconception is that casinos always cover payouts on their floor (or online). However, the truth is that either casinos, software developers, or both may pay large wins. Key factors in this discussion include the jackpot type and agreement between a casino and software provider. Regarding the jackpot type, progressive prizes can either be "local" or "network." Casinos usually pay local jackpots because they're smaller amounts, while developers often cover the larger network prizes. However, both sides can make an agreement to split costs while sharing profits.
What's Considered a Big Win in Casinos?
A big payout is all relative to the individual. Some players may consider $500 a large payout, while others are focused on six figures or more. In land-based casinos, the IRS considers $1,200 large enough to require paperwork. The IRS wants to make sure that it gets a chunk of winnings this large. Casinos are willing to pay cash for wins under $25,000, but they make arrangements for any prizes bigger than this. Online casinos vary on what they deem a big payout and will make withdrawal restrictions accordingly (covered next).
How Do Casinos Pay Big Jackpots?
Casinos typically offer two options on huge jackpots: lump sum or annuity payments. A casino's policy on offering these options depends upon the win. Some gambling establishments may pay annuities on $1 million jackpots, while others could do so on $100k wins. In any case, the lump sum is always smaller than the win value. An example of annuity payouts could be $50,000 every year for 20 years ($1 million total). Online casinos typically have withdrawal limits to naturally serve as partial payments. If a gaming site allows up to $10,000 weekly cashouts, for example, you'd be able to withdraw $520,000 every year.
Are Annuity Jackpot Payments Fair?
It doesn't seem fair that you could win a jackpot and receive less than the stated value. For this reason, some players may opt for annuity payouts over the lump sum. However, the latter is often worth more because it doesn't lose value through inflation. Neither lump sums nor annuities seem like great options in the end. But casinos and software developers are similar to lottery corporations in this respect. They don't want to pay millions of dollars upfront and instead offer more-favorable options to them. Again, online casinos already have built-in partial payments thanks to the cashout limits.
Check the Fine Print
You can generally expect to choose between a lump sum, annuities, or withdrawal limits (online) when winning big. That said, we urge you to check the fine print whenever possible. This matter is especially easy in online casinos, where terms and conditions are right on the website. The general terms page often states withdrawal limits and any potential information on jackpot wins. Land-based casinos and slots developers may also have terms and conditions pages that explain their payout policies. You should check out such pages whenever you're interested in playing at a particular casino.