How Do Casinos Pay Out Large Sums Of Money?
Most players have not given a thought beyond winning that large jackpot. However, it is essential to know what happens when this wonderful day arrives. The movies have painted an incorrect picture and it is not just a matter of receiving a briefcase full of money and walking out. So, how do casinos pay out large sums of money? It is most cases the payouts are given by an annuity or check.
When the slot machine lights up to indicate there has been a large sum won, you will not have to flag down a casino worker. Instead, someone will be on you so quickly before you can blink. This is because the machine has already indicated to them that a jackpot was won. The casino worker will walk you through the process of claiming your winnings.
Before any payments are made, the casino will need to verify that that the machine you were playing has not malfunctioned. It will be tested for this. The casino will also check that you have not cheated to cause the jackpot win. The process before receiving your payment will also involve confirming your identity. You will need to show legal government issued identification even if you are a non-resident or a foreigner on vacation. This can all take a long time and the verification process cannot be rushed.
During this process, it will also be necessary to sign any tax forms. If you are in the United States, the IRS would want their share of your winnings. You can choose to receive a form 1099 or instead, a special W-2G form. Players will also have to make the decision whether they would like a lump sum or to be paid as an annuity. Keep in mind that for jackpots of up to $25,000 a casino player can receive either a check or cash. In some cases, the player may opt for tickets or request to leave some of the money inside their player account to be used on subsequent visits.
The annuity is a way to receive a portion of the winnings on a payment plan. This is a long-term payout from 20 years to 30 years. Casino players will only have to pay taxes on the amount they receive each year. This is a way to spread the money over a specific time period and a guaranteed income. However, it does mean you will not have access to the cash right away, and the amount of interest from it can depreciate. Anyone choosing an annuity payment will really have to sit down with their tax accountant to see how this would affect them.
Lump Sum Payment
This is in contrast to the lump sum payout. With a lump sum payment of a large sum of money, the amount for the tax man is taken out from the beginning, and can be between 50% to 60% in the United States. The money is then paid out, but you will have to pay taxes on this large amount of cash.