• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Professor Slots

Play slots smarter. Leave with your winnings!

Play slots smarter. Leave with your winnings!
Get your FREE Guide Revealing…

  • YOUR PLAN TO WIN
  • CONSULTING
  • SIGN IN

How Do Slot Machines Pay Out Taxable Jackpots?

April 10, 2022 By Jon Friedl - Professor Slots

Introduction to Taxable Jackpots

One of the most popular slot machine questions on Google searches is: How do slot machines payout taxable jackpots? I’ve assumed this question is about the mechanics of the payout process. A different upcoming post deals with explaining when slot machines payout.

Get Your FREE Guide Revealing…

Keep Reading … or Watch Instead!

The Slot Machine Gambling Process

Once a player selects a specific slot machine, that machine operates to accept or reject the inserted cash, ticket voucher, and reward card.

Get Your FREE Guide Revealing…

Next, it accepts the player’s selection for denomination and amount of credits to be bet. However, it will merely reject one or both settings if insufficient funds are available to make such a bet.

When the bet is placed, the machine immediately selects the latest random number generated by its RNG to determine the outcome of the bet and update the players club card with the points earned for placing the bet.

At the end of this process, the machine turns the reels to show the outcome of the bet. See below for this player-machine sequence of events.

Get Your FREE Guide Revealing…

During slot machine gambling, a sequence of actions and reactions occurs between the player and machine. The player:

  • selects a specific machine, inserts money in the form of cash or ticket voucher
  • chooses from the denominations available
  • selects the number of credits to bet
  • places a bet
  • observes the results of the bet including any bonus round
  • receives winnings from the bet (if any)
  • then, either:
    • leaves the machine empty-handed
    • cashes out any remaining funds and leaves with a ticket voucher
    • continues playing the machine.

Get Your FREE Guide Revealing…

The player may choose to insert a player card at any time before or during play, then later remove it before leaving the machine.

Player/Machine Sequence of Events when Playing Slot Machines [Taxable Jackpots]
Player/Machine Sequence of Events when Playing Slot Machines [Taxable Jackpots]

Jackpot!

Between determining the outcome of the bet and turning the reels, the machine executes programming code that sets the reels.

Get Your FREE Guide Revealing…

The reels turn in a way the machine’s game designers consider most entertaining to the player – such as stopping on reel symbols for non-wins next to the symbols for sizable jackpots.

As mentioned, the bet’s outcome is determined when the bet is placed, not when the reels stop moving, despite the player’s entertainment value when observing the slot machine’s “action”.

Get Your FREE Guide Revealing…

In the event of a win, the machine executes further programming to activate sequences of lights and sounds while updating the information display for the player, which is referred to as a roll-up.

All jackpots are taxable [Taxable Jackpots]
All jackpots are taxable [Taxable Jackpots]

Now What? – The Hand Pay Process

If a jackpot less than the taxable limit is won, slot players can proceed with continuing to play or cash out from that slot machine. The current taxable jackpot limit is $1,200 in the United States.

Get Your FREE Guide Revealing…

Meaning, if you have a win of $1,200.00 or more at a slot machine, there is an immediate tax bill resulting in an IRS Form W-2G. If you win $1,199.99 or less, there is no automatic tax bill.

Jackpots that require immediate payment of taxes results in the slot machine locking up.

Many slot players have been surprised by their slot machine locking up when a taxable jackpot is won. It can only be unlocked by a casino employee, e.g., a slot attendant.

Get Your FREE Guide Revealing…

A slot attendant will arrive shortly to administer a hand payout. During a hand payout, a slot attendant

  • collects personal identification sufficient to both complete a tax form as well as any other state-required documentation
  • performs the hand payout (if they have adequate cash on hand)
  • unlocks the machine to allow the player to continue.

If the attendant is not carrying enough money with them, or if the player wishes to have a cashier’s check instead of a cash payout, the slot attendant leaves the player with a receipt and returns a short while later with the check or cash.

Get Your FREE Guide Revealing…

If the attendant leaves, they typically unlock the slot machine beforehand to allow the player to continue betting while waiting for the slot attendant to return.

Jackpots are a good thing [Taxable Jackpots]
Jackpots are a good thing [Taxable Jackpots]

Summary of Taxable Jackpots

The most important thing to remember about winning a jackpot is to make sure you’ve brought your government-issued I.D. If you don’t have it, you cannot receive a taxable jackpot.

Book Your Consultation…

Related Articles from Professor Slots

  • How Slot Machines Work from a Player’s Perspective
  • Keeping Gambling Records for Tax Preparation and More

Other Articles from Professor Slots

  • Previous: Why Do Slot Machines Use Fruit Reel Symbols?
  • Next: Who Builds Slot Machines Throughout the World?

Register Now!

Register Now!

Primary Sidebar

Basics of Slots Online Course (Self-Paced)

Register Now!

Need a plan? Book a paid consultation!

Advanced Slots Course (Instructor-Led)

Waitlist Now!

Professor Slots – YouTube Channel

Watch on YouTube

My Most Popular Articles

  1. Choosing Slot Machines
  2. Can You Guess Who Controls Slot Machine Odds?
  3. Win More Often at Slots During Your Las Vegas Visit
  4. MGM Grand Detroit Casino Trip Review

If you’re new, sign up for a 15-minute chat!

Show your support

Tip Professor Slots!

My Book on Learning to Win at Slots

Gambling Tools (Commissions Earned)

As featured on:

ABC27 Evening News Report ABC9  News Report
  • YOUR PLAN TO WIN
  • CONSULTING
  • SIGN IN

Policies

  • Privacy Policy
  • Terms of Service
  • Responsible Gambling
  • Customer Service Pledge

About

  • Professor Slots
  • Jon H. Friedl, Jr., Ph.D.
  • Podcast Episodes
  • Merchandise

Contact Info

Jon Friedl, LLC
4790 Caughlin Pkwy #218
Reno, NV 89519-0907 USA

Voicemail/Text:
702-90-SLOTS (702-907-5687)
Email: jon@professorslots.com

As an Amazon Associate, I earn from qualifying purchases. Copyright 2016-2023, Jon Friedl, LLC

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie Settings Accept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
_wpfuuid11 yearsThis cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon.
cookielawinfo-checkbox-advertisement1 yearSet by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Advertisement" category .
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
CookieDurationDescription
__atuvc1 year 1 monthAddThis sets this cookie to ensure that the updated count is seen when one shares a page and returns to it, before the share count cache is updated.
__atuvs30 minutesAddThis sets this cookie to ensure that the updated count is seen when one shares a page and returns to it, before the share count cache is updated.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
CookieDurationDescription
__gads1 year 24 daysThe __gads cookie, set by Google, is stored under DoubleClick domain and tracks the number of times users see an advert, measures the success of the campaign and calculates its revenue. This cookie can only be read from the domain they are set on and will not track any data while browsing through other sites.
_ga2 yearsThe _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.
_gat_gtag_UA_76764367_11 minuteSet by Google to distinguish users.
_gid1 dayInstalled by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.
at-randneverAddThis sets this cookie to track page visits, sources of traffic and share counts.
CONSENT2 yearsYouTube sets this cookie via embedded youtube-videos and registers anonymous statistical data.
uvc1 year 1 monthSet by addthis.com to determine the usage of addthis.com service.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
CookieDurationDescription
loc1 year 1 monthAddThis sets this geolocation cookie to help understand the location of users who share the information.
test_cookie15 minutesThe test_cookie is set by doubleclick.net and is used to determine if the user's browser supports cookies.
VISITOR_INFO1_LIVE5 months 27 daysA cookie set by YouTube to measure bandwidth that determines whether the user gets the new or old player interface.
YSCsessionYSC cookie is set by Youtube and is used to track the views of embedded videos on Youtube pages.
yt-remote-connected-devicesneverYouTube sets this cookie to store the video preferences of the user using embedded YouTube video.
yt-remote-device-idneverYouTube sets this cookie to store the video preferences of the user using embedded YouTube video.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
CookieDurationDescription
_drip_client_25001682 yearsNo description
_drip_visitor_25001682 yearsNo description
GoogleAdServingTestsessionNo description
xtc1 year 1 monthNo description
Save & Accept
Powered by CookieYes Logo