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How Do Casinos Pay out Large Sums of Money?

Boom! you hit the jackpot and now your account funds are filling up with well-earned cash. Now how do you get that money out of your account and into your wallet? Find out how your casino can pay you out and all the considerations that come with drawing out large sums of money.

It’s every gambler’s dream to win big at the casino. Picture the bright lights dimming momentarily as the slot machine goes wild or the dealer looking at you in amazement as the cards turn in your favor. The jubilation, the feeling of triumph after hours of tension, the rush of endorphins – it’s the sort of exhilarating moment movies are made of.

Casinos push the narrative of winning big by providing special jackpot games and tournaments, offering the prospect of such massive payouts. So, contrary to what you may believe, casinos don’t prevent you from winning such large sums. It’s actually an excellent marketing strategy for them.

However, it’s how these massive winnings are paid out that you should concern yourself with. From legal terms to tax obligations and acceptable payment methods, this article aims to shed light on how your jackpot winnings make their way from your casino balance to your bank account.

Annuity Payments vs Lump Sum Cash Outs

There are two ways that traditional casinos typically offer pay winnings of large amounts: either through annuity or lump sum payments.

Annuity Payments

An annuity payment is a system where the winner receives their prize money distributed over several years or even decades, usually 20 – 30 years. Instead of acquiring the whole sum immediately, the beneficiary gets a consistent, smaller amount at regular intervals. This structured settlement provides a steady income over time, making it somewhat analogous to receiving a salary or a pension.


  • Provides a controlled income stream, aiding in long-term financial planning.
  • Depending on tax laws, the spread-out winnings might result in a cumulative lower tax obligation.
  • Reduces the risk of squandering the entire amount on impulse or poor financial decisions.


  • Inflation can erode the real value of future payments, making them worth less in terms of purchasing power.
  • Limits immediate financial flexibility due to the fixed payment schedule.

Lump Sum Cash Outs

Choosing a lump sum cash out means that the winner collects the entirety of their prize money at once. This method hands over the total winnings immediately, offering the beneficiary a sudden and substantial increase in their financial assets. It allows for immediate access and use, whether for investment, purchases, or other financial decisions.


  • Grants immediate access to the full prize.
  • Great for financial emergencies, large expenditures, or investments.
  • Potentially yields higher returns if managed wisely.


  • Can put you in a higher tax bracket due to the substantial influx of money in a single year.
  • A heightened risk of financial mismanagement, especially without appropriate financial guidance or discipline.

Which is Better? (Annuity Payments or Lump Sums)

While both methods have their merits, they also come with distinct implications for the recipient. It’s essential to understand the intricacies of each option, as the choice can significantly impact your financial future. A good idea is to enlist a certified financial planner to help you make the best decision for your financial needs.

Some additional points to bear in mind for cashing out on big wins include the following:

  • Players often have 90 days to choose between a lump sum disbursement and annuity payments.
  • Some operators will decide this for you (usually stated in the terms and conditions or withdrawal policy).
  • Receiving casino winnings may take a while due to extended verification that may be required.
  • Casinos may request you take part in media arrangements that involve picture sessions and interviews (this is not obligatory).

How Online Casinos Pay Out Large Sums of Money

Every online casino has its own terms and conditions regarding payouts. First and foremost, players should be well-acquainted with these, especially any clauses about withdrawal limits or mandatory waiting periods before playing at the site. Some operators may place a limit on how much you can withdraw in a single day, usually about $5,000. Others will limit how much you win at all.

There are also federal and state tax laws that apply to large casino winnings. The precise requirements may differ based on the location, but typically, the threshold for what is considered a large sum is $25,000.

Brick-and-mortar casinos will often pay by cash or check for winnings that fall under this amount or on the mark. It’s for amounts surpassing the $25,000 threshold that you can choose between an annuity settlement and a lump sum payment. At online casino sites, however, there are a variety of diverse payment methods that support these larger winnings.

Payment Methods

Here’s an overview of the biggest US brands in legal casino gambling states and their cash-out methods:

🎰Operators💳Payment methods
BetMGM CasinoBank transfer (ACH), Cash, Wire Transfer, Check, PayPal, Visa/MasterCard, Prepaid Play+
DraftKings CasinoPayPal, Check, Play+, ACH, Cash at Cage
Caesars CasinoBank transfer, PayPal, Play+ prepaid card, Caesars Casino cage
FanDuel CasinoPayPal, ACH, FanDuel prepaid card, Visa/MasterCard, Wire transfer
BetRivers CasinoACH, Play+, Cash at Cage, PayPal

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How to Know if a Casino Pays Out in Full

When it comes to casino winnings, especially substantial amounts, it’s crucial for players to know whether they will receive their prize money in a single lump sum or through extended annuity payments. As mentioned earlier, you may be given the option to choose your preferred method. Other times, there’s a specific policy in place.

Here’s how you can discern the payout methods of a casino:

Examine Slot Machines

In land-based establishments, one of the most direct ways to discern the payout type is to look at the face or display of the slot machine. Machines are typically clear about their payment structure. An annuity game will have clear indicators, often with terms like “Paid Annuity” or “Extended Payouts.” If you see this, it means that significant winnings will be disbursed over a set period rather than all at once.

Full-Pay win machines that offer lump sum payouts will either explicitly state so or not mention annuities. Terms like “Instant Payout” or “Full Pay” are indicators of this structure. An immediate full-pay win will see you get paid upfront.

Payout Policy and Terms & Conditions

The terms of payout are often detailed in the casino’s ‘Terms and Conditions’ or ‘Payout Policy.’ While it may seem tedious, thoroughly reviewing these sections is imperative for any frequent gambler serious about their gaming. Some casino platforms may have stipulations that payouts below a certain amount can be received in full, but anything above that threshold will be paid in annuities. Look out for these specifics.

Ask Directly

If in doubt, there’s no harm in directly asking the casino staff (in a land-based casino) or reaching out to the customer support team (in online casinos). They should be able to clarify their payout structure for substantial winnings.

Player Feedback

Especially relevant for virtual casinos, player forums and review sites often have first-hand accounts of payout experiences. These can provide insights into whether a particular casino typically pays out in full or prefers annuity-based disbursements for large wins.

Do Online Casinos Pay Out in Cash?

By virtue of their digital nature, online gambling sites typically pay winners via digital payment methods. However, online casinos in the US may pay out in cash via the “Cash at Casino Cage option. This is usually available at platforms like BetMGM and BetRivers, which have physical casino properties. In states with legal online casinos tied to land-based partners, players can also deposit and withdraw funds directly from the physical casino’s cashier, like the case of BetRivers NJ and Golden Nugget Atlantic City.

Do Online Casinos Payout Jackpots in Full?

Jackpot Grand Total

With there being many casino operators that don’t keep their word and try to wiggle their way out of paying winners, your jackpots being paid out in full depends on the integrity of the casino’s payout system.

For instance, offshore casinos often set limits on progressive jackpots. Unlike stand-alone and local jackpots, progressive jackpots are networked across multiple operators and are usually paid out by the game developer. Also, the prize is, for the most part, pooled from players’ bets. So imposing a payout limit on a progressive jackpot is an unfair tactic used to pocket part of players’ winnings.

If you want assurance that when you win, you’ll receive your due winnings in full, here are some guidelines when deciding the casino to play at:

  • Relevant state licensing
  • Audited Payout Percentages
  • Online Reviews and Player Forums
  • Check Their Payout Policy
  • Prompt and Efficient Customer Service
  • Consistent track record of paying out winners
  • Avoid Too-Good-To-Be-True Bonuses
  • Reputable Payment Methods
  • Clear Terms and Conditions
  • Personal Experience with smaller amounts

Can the Casino Kick Me Out for Winning Too Much?

The notion of a casino ejecting a player amidst a winning streak often seems like a plot straight out of a Hollywood movie. In reality, gambling operators are well aware that on any given day, casino games can roll out a jackpot win. Casino companies operate on probabilities and are prepared for the occasional big payout. So legitimate wins, achieved purely through luck or valid strategy, shouldn’t lead to any player’s eviction.

However, if a casino becomes suspicious of how a player is consistently winning money, that changes the dynamic. While techniques like card counting in blackjack aren’t illegal, casinos frown upon them. Players perceived as having an unfair advantage or using frowned-upon strategies might be asked to leave. As long as you play fair and square and respect the establishment’s rules, you shouldn’t worry about being shown the door.

Are There Payment Fees for Lump Sum Casino Payouts?

Some casinos might have transaction fees when disbursing large lump sum amounts, especially if specific payout methods are chosen. Once again, it’s essential to review the casino’s terms and conditions or speak with the cashier to clarify any potential charges. Fortunately, many reputable establishments aim to keep these fees minimal, understanding the importance of player satisfaction.

On the other hand, you also have to pay taxes on your winnings. Here’s what you need to know:

Reportable Winnings: The US taxes gambling winnings, irrespective of the amount. However, casinos (or players) are mandated to report only certain winning thresholds to the Internal Revenue Service (IRS) via IRS tax forms.

  • $1,200 for slot machines and bingo
  • $1,500 for keno
  • $5,000 for poker tournaments
  • $600+ (on horse track) or any casino winnings worth 300 times your initial wager

Withholding Taxes: For certain winnings, especially those above $5,000, casinos might automatically withhold federal taxes at a rate of 24%. However, this doesn’t exempt you from declaring the winnings in your tax return.

Tax Return Inclusion: Players should include all gambling winnings as ‘Other Income’ on tax returns. This means winnings from common slot machines, table games, horse races, lotteries, and even bingo.

W-2G Form: If you win a certain amount or win at odds that qualify, the casino will present you with a W-2G tax form, a special IRS document for gambling taxes, where you must detail the amount won and the taxes withheld. It’s vital to keep this for your records and for tax filing.

Deducting Losses: Interestingly, you can deduct your gambling losses, but only up to the amount of your winnings. These deductions are itemized on Schedule A of your tax return. It’s paramount to keep detailed records of both winnings and losses to validate your claims. Deductible losses on lodging, cost of meals, and other expenses may apply to professional gamblers only.

Note that the method you choose between lump sum or installments will affect how much tax you’ll get to pay. Income taxes on a lump sum will be significantly higher based on the progressive tax system, while annuity payments are spread out over time and are likely to keep you in a lower tax bracket.

Whats the Limit for Tax-Free Gambling Winnings?

When it comes to gambling winnings in the US, the concept of “tax-free” can be a bit misleading. According to the Internal Revenue Service (IRS), all gambling winnings are taxable income. This means that technically, no amount of gambling winnings is truly tax-free. However, there are thresholds for reporting and withholding, which can sometimes be mistaken for tax-free allowances.

The IRS does not require entities to issue Form W-2G for winnings under $600, with some exceptions based on the type of gambling (horse racing) and the ratio of payout to wager (300x). This often leads to the misconception that winnings under $600 are tax-free.

Even if your gambling winnings are below $600 and you do not receive a W-2G form for tax purposes, you are still legally required to report all winnings on federal tax returns as “other income.” It’s the taxpayer’s responsibility to ensure all gambling income, regardless of the amount, is reported accurately.

Feel free to use our gambling tax winnings calculator to know how much you will be paying based on your state and winning amount.

What Can Happen if I Don’t Report My Online Casino Winnings?

Failure to report gambling earnings to tax authorities can lead to complications. The IRS often cross-references reported incomes with records from institutions. A discrepancy can result in an audit – a comprehensive review of your financial transactions, which can be both taxing and invasive.

Financial repercussions await those who fail to declare. Penalties can be substantial, amounting to a sizable percentage of the unpaid tax. Additionally, interest accumulates on these unpaid taxes from the due date until full payment is made.

In severe cases where significant amounts are repeatedly unreported, one might even face criminal charges for tax evasion, translating to possible jail time, an alarming record, and heightened fines.

Moreover, once flagged by tax authorities, future returns are more likely to be scrutinized closely, heightening the chance for future audits. Beyond just finances, any involvement in tax evasion can damage one’s personal and professional reputation, affecting relationships, job prospects, and loan applications.


It can literally change your life to hit a big win at a casino, whether online or land-based. It’s not uncommon to win jackpots worth a million dollars or more. But a lot happens when you win and before you can take home the bag.

Traditional casinos often provide winners with a choice between annuity payments, which offer scheduled payments over a period, or a one-time lump sum. Online platforms, especially those in the US, employ diverse payment methods, each with its procedures and processing times.

All your casino winnings come with tax implications. While the IRS doesn’t automatically require reporting for amounts under $600, all winnings remain taxable. Non-compliance can lead to audits, penalties, and, in extreme cases, legal repercussions.

Moreover, players should be vigilant, understanding a casino’s payout terms and ensuring wins are received in full.