How Do Casinos Pay Out Large Sums Of Money?
Some play at casinos for the love of the game, while others play to win. And yes, you can win big playing at a regular or online casino. But how exactly do online casinos pay large sums? Read this guide and find out.
How Casinos Pay You
The payouts are straightforward if you have the fortune of winning modest amounts. For example, if you win a few hundred dollars at a terrestrial casino, you go to the cashier and receive your money. If you play slot machines, most casinos won't report winnings to the IRS if you stay below a certain threshold.
However, once you reach that threshold, the online and regular casinos must report those winnings to the IRS. Poker works a little differently. Both online and regular casinos report these winnings once you hit the $600 mark. Then, again, you can head to the cashier and receive your money.
But what if you game and win it big playing at an online casino? Let's say if you win a slot game tournament, you process your withdrawals like normal. It's up to you to pay your federal and state tax liabilities. And if you live in cities like New York and Detroit, you must pay municipal taxes.
But once you hit the $5,000 mark, for the most part, the online casino must report that to the IRS off the top. And if you live in a state with a tax liability, you must also pay that. Moving forward, the online casino will pay you by check or, sometimes, by money transfer. These methods come with fees associated with them.
Depending on the online casino, you might get a lump sum or annuity option for payments reaching $20,000. Most online casinos will give you 90 days to decide between the two. If you go for the lump sum payment, you pay all the applicable taxes at once. But with the annuity, you spread that tax liability over time.