While the change that led handpay jackpots to be increased at the federal level was confirmed by the IRS only a short time before the new year, when it took effect, some of us were still somewhat surprised to see how slow the switchover was. A survey of casinos recently indicated that 15 percent of them hadn’t started the process of updating their machines, but that means most have.
One player wonders about that process:
Since slots are preprogrammed at the manufacturer then sold to casinos, what did the casinos have to do to “change” the program for a $1,200 handpay display to now be $2,000 handpay?
Bella S.
This was something we were curious about too, so we asked a number of manufacturers during the IGA conference in San Diego earlier this year. It turns out, most manufacturers anticipated this would eventually happen, and programmed in a setting in many of their newer slots to allow for casinos to update the number if/when it happened.
This wasn’t universal – many casinos have machines on the floor that were older and would require a software update, if the manufacturers were even able to support such a thing (imagine trying to update a 20-year-old slot).
But in at least one case a manufacturer told us they had only introduced their machines to have a setting in the past couple of years, meaning they had some work to do to retroactively have some of their machines. And it did seem in some cases there was an effort update what was possible.
So in some cases machines, especially ones that couldn’t be updated, will continue to lock up at $1,200. However, on modern machines the jackpot amount is a setting, similar to some other settings casinos do have access to, such as the payback percentage. While they can’t control every little thing a slot can do, that jackpot threshold in terms of when a machine locks up for manual payout is one they do have.
And being able to update this number is important because going forward it’s expected that the handpay jackpot threshold will increase with inflation, so this will become an annual process going forward.
It’s worth noting that, while not for tax purposes, there are other settings a casino can set, such as how much money in a machine is too much for a ticket, in which a manual payout in cash takes place. We’ve seen it as low as $3,000, not ideal for higher limit players, but one most of us won’t generally encounter, which is probably the point.
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