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Wide Area Progressive - advice needed please

Discussion in 'Casino Gaming' started by Corinne, Jun 8, 2015.

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  1. Corinne

    Corinne Low-Roller

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    Just wondering if anyone has any advice on this scenario from all you helpful people. Although I was advised by the casino not to post anything on social media I'm not sure VMB is included in that and wanted your experienced take on it.

    A few days ago I won a WAP. Had to wait for an employee of the owner of the slot machine to arrive which was fine and the fact it was at 1.30am wasn't a problem. After filling in lots of paperwork and reading it through and being told there were a few ways of receiving the money. It said it would be paid in 20 yearly annual instalments or the if wanting to be paid the full amount it would be a discounted figure. The guy from the company said that meant it would be the full amount less the up front one twentieth in a check or bank transfer. For two hours he assured us we would get the full amount. We still queried this sentence and asked the advice of the casino manager who agreed with us that it looked like if you wanted to be paid the full progressive straight away it would be less money.

    The manager said that in his experience it is usually 40-50% of the full amount. By now we felt like children given sweets and then had them taken away.

    Still extremely grateful for the win of course but a little deflated. Coming from the UK we never expected that and even the company guy didn't know. We asked him to ring his boss and ask. It was then confirmed there would be a reduction but he couldn't say how much and the terms were written on the machine. Not in the pays but on the big screen across the top in such tiny writing I defy anyone to actually see it let alone be able to read it.

    The decision now is whether to accept this lower amount (whenever I find out how much) or take yearly sums which in ten years time will be worth very little anyway due to inflation.

    I'm sure most VMBrs know all this but although I'd seen something about it on Lions Share we weren't expecting it, particularly after the company guy said however we wanted it then it would be the full amount and how great it was that I had my ITIN so tax wouldn't be deducted.

    Going to see the casino manager again tonight or tomorrow to see if he has found out what percentage they keep if paid straight away. It makes no sense to me that there wasn't an immediate answer from the company on this or maybe it changes according to who you are!!! Who knows.

    Am hoping some of you may be able to advise what to do and whether you would take yearly amounts or up front money and whether or not anyone has been through this and what assurance there is that the company doesn't go bankrupt or just stop paying each year.

    Please don't think I'm moaning and not extremely happy to have this excitement as it's still a great win but just feeling a tad deflated after two hours on such a high and finally got to bed at 6am. It's now a couple of days later and have been wondering to ask you guys or not but decided to see if anyone has any pointers for me to make it a little clearer in my head.

    Thanks guys.
     
  2. sindustry

    sindustry VIP Whale

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    Wide Area Progressiveadvice needed pleas

    From my understanding, if you take a lump sum, it is less than the total jackpot amount. How much less, I do not know. My buddy witnessed someone hit a Wheel Of fortune progressive a couple weeks ago and that either paid over 20 years, or a reduced lump sum...something in the $550-ish zone, from a 1.2mil jackpot.

    Edit: actually, I may have gotten the lump sum figure wrong...I'll see if he found out the actual amount.
     
  3. symbols

    symbols Low-Roller

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    Congrats
     
  4. topcard

    topcard Older than the Stardust!

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    Here's the deal on stuff like this:
    If you check the fine-print on these machines regarding multi-million dollar payouts, you will find that they are an annuity - meaning paid-out over a certain number of years.
    Those annuities have a 'present cash value'...it is typically just over 50% of the annuity value. (e.g.- a $10 million jackpot would be $500,000/year for 20 years, or about $5 million if you want it all right now... The idea is that the $5 million in cash would generate $10 million in payments over 20 years because of the interest on the balance.
    Now, depending on your tax situation, you may very well wish to take one over the other. I wouldn't know.
    IF they're giving you some time to make a decision, I would STRONGLY urge you to retain an 'estate planning' attorney. Be sure to tell them you're from the UK.
    NOTE: Your US Federal income tax rate on $5 million will be much higher than the US rate on $500,000 annually x 20 years (assuming tax rates do not change).
    A $5 million kump-sum will likely net you about $2.6 million after taxes... you will have paid $2.4 million in taxes.
    Compare this to the 30% or so that you'll pay per year, total, for the first $5 million on the annuity - 10 years, total tax = $1.5 million.
    Even for the entire $10 million over 20 years., your total tax would be about $3 million, giving you a net of $7 million.

    If you think about getting $2.6 million right now, versus getting $500,000 a year, for many of us, we would take the $500K...after all, in just 8 years, you will have received the same amount after-taxes (8 x 350,000 = $2.8 million), and you'll still have 12 more years of receiving $350K (after-tax) per year.

    Anyway - I'm not up on how US tax law impacts UK citizens, so you need to talk with somebody who is.
    Good luck & congratulations!!
    :beer:
     
    Seems like forever from now, but the flights are booked, so it counts!
  5. yoyoseven

    yoyoseven Low-Roller

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    Pretty much what topcard said. There's a lot of factors to consider when making a lump-sum versus annuity decision. Will you live long enough to collect the annuity? Can you invest the lump-sum and do better than the rate of return afforded by the annuity? What will the inflation rate look like between now and the end of the annuity, in your opinion? Etc, etc. As topcard said, you should probably get in touch with an attorney or an accountant (someone with some actuarial expertise) to help you decide 1) whether to take the lump-sum or the annuity, and 2) what to do with the cash if you take the lump-sum. If I were you, I would probably contact a professional in the UK in regards to the tax implications........

    Oh, and CONGRAULATIONS!
     
  6. Char1

    Char1 High-Roller

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    Can't add anymore than Congrats!
    I hope it all works out for you.
     
    May 28-June 2
  7. pikabu

    pikabu Low-Roller

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    Congratulations! In Canada we have a lottery in which you can win $1 million dollars (payments over 20 years) or $675,000 cash. I would definitely take the $675,000 up front.

    Not sure about US income tax regulations, but you may have to apply to have tax money reimbursed that the US IRS takes from your winnings.

    All a bit complicated, but let us know what happens.
     
  8. CJ's

    CJ's Low-Roller

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    Jammy bugger lol
    If it's not too rude to ask......how much did you win????
    Oh and major congrats :nworthy:
     
    The way I like to start a new year
  9. Royal Flusher

    Royal Flusher Savvy Gambler

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    Congratulations! I would re-iterate the advice to consult a professional estate / tax planner on this.

    I wouldn't give advice on this, personally. There are too many variables. Like how much you won, how much money you have, and how old you are. If you are 100 years old, take the lump sum no matter what (assuming that they cut off payments if, God forbid, something happens to you.) Also, what goals you have in life.

    Don't let them rush you, maybe get a lawyer too. And make them spell out the terms in black and white on paper. It's ridiculous that nobody has been able to give specifics on this.
     
  10. Corinne

    Corinne Low-Roller

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    Huge thanks to everyone for advice. There is no tax to pay for a UK citizen as I had the tax exemption number with me. CJ, sorry I'm not going to say how but I will say it was under 250k.

    Thanks again all of you. Have been advised to take this down so if mods can please do this I would be grateful. Not sure how to do it myself. However please leave for a while so you can how grateful I am for the advice.
     
  11. CJ's

    CJ's Low-Roller

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    i understand :evillaugh
    good luck and enjoy the payout however much it ends up being :thumbsup:
     
    The way I like to start a new year
  12. Film-Noir

    Film-Noir High-Roller

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    Nice!

    Congrats Corinne

    Traditionally Lump sum payments are the more desirable way for a large settlement.
    Many lump sums are Annuitized at 20-25 Year payouts, a good Investor can beat that
    with a sound & balanced portfolio of diverse mutual fund Stock Investments over the time period.

    Being from the U.K. it a double win as your not traditionally subject to U.S. Tax.

    Disclaimer: You are free to, invest as you wish & always seek the guidance of a Tax professional
    in Lump sum decisions.

    Also keep it quiet, as with any large boon, /the beggars & bums will come a calling
    & you will see relatives & old acquaintances come out of the woodwork that you haven't seen in 20 years,
    trying to /suck up.

    Enjoy,
    You have accomplished what many L.V.M.B. Members have only dreamed of
    Winning a Large dreamy Jackpot! :nworthy::nworthy::nworthy::nworthy::nworthy::nworthy:
     
  13. Royal Flusher

    Royal Flusher Savvy Gambler

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    I hope you will post a full account of this when the dust has settled!
     
  14. flyguyfl

    flyguyfl Low-Roller

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    Corrine, married or want to be? Just kidding girl from a guy who lived in Ipswich for 4 years..
     
  15. tringlomane

    tringlomane STP Addicted Beer Snob

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    Congrats! But under 250k and it's an annuity? That's pretty shitty imo.
     
  16. Auggie

    Auggie Dovahkiin

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    There are companies that will buy annuity payments and they usually pay a little more than the lump sum option you get offered.

    Being that you are from the UK I can't say whether it would be best to find a company there or use one in the USA, but just saying its an option to explore.
     
  17. Corinne

    Corinne Low-Roller

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    Divorced actually. Happily so. When I got the win a young guy asked if I wanted a blue eyed young stripper. No thanks I said, would rather have a cup of tea. It's not enough money for anyone to put up with me purely for the money, lol. There won't be that much after they reduce the lump sum and my friend gets her 20%.

    I will post something when I find out the actual details although someone did say today that the 50% lump sum payment may take into account the tax US citizens pay so it may be more as there will be no tax to pay for me. That would be a nice bonus.
     
  18. pd54

    pd54 Low-Roller

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    "if wanting to be paid the full amount it would be a discounted figure."

    Bit rubbish though to win the jackpot, but not actually get the amount advertised. In UK gambling winnings are tax free, so at least that's a positive!
     
  19. Its Only Money

    Its Only Money Low-Roller

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    That is how lotteries and a lot of big jackpots are paid out, either an annuity or the present value of that annuity. I've never really thought about it in terms of slot jackpots, but it makes sense. It is just present value of money, nothing underhanded about how they do it. I would like to read what they put on the machines to tell you that it is an annuity though. At 10% the PV of a 20 year annual annuity with a total pay out of 250,000 would be 106,420, at 5% you are looking at 155,775. Lump sum is almost always the best way to go.

    Good luck.
     
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  20. blue227

    blue227 Tourist

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    Did you win the "Windfall" WAP for $170K? I was at the Wynn last week and noticed that the winning progressive jackpot amount got reset to $100K while I was there. Either way, congrats!
     
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