What Happens When You Hit a Jackpot Handpay?

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Brian Christopher gets paid another handpay

Jackpot handpays are a rarity for many players, given quite a few of us don’t do the sorts of bets Brian Christopher does. Here’s a representative example of what players ask us quite a bit about them:

I’ve always wondered how taxes work if you hit a handpay. Do they give you all the money right away? How much is typically taken out in taxes? How does your win/loss report affect this?

Brittany S.

A jackpot handpay is a win of $1,200 or more on a single wager, regardless of bet. When this threshold is reached, a machine locks up and a slot attendant gets involved (usually, with the exception of Fast Pay, but we’ll talk about the traditional scenario here). 

The slot attendant will capture the core personal information needed to create a W2G, which has to be filed with the IRS. You’ll receive a copy of it as well, so you can incorporate it into your own tax return paperwork.

Now, on to your questions:

Do They Give You All The Money Right Away?

In most cases, you receive it immediately, regardless of amount. You do have the option to request a check for part or all of the money, which can be smart if it’s an amount that may be too difficult or tempting to carry around the casino.

The exception to this rule would be when you hit one of those gigantic Wide Area Progressives that some slots offer. Those are paid by the manufacturer instead of the casino, and often are paid in installments instead of all at once.

How Much is Typically Taken Out in Taxes?

Many times they’ll ask you how much – it’s not a set amount and you’re not required to have any taken out (presuming you’re a U.S. player in a U.S. casino – players out of country are governed under different rules). 

Regardless of whether you have taxes taken out, the amount of the win is reported and counts as income. Your ability to claim losses depends on your personal situation. So ultimately it’s your call, and you should do what makes the most sense based on your expectation at the end of the year as to whether you’ll owe or not.

How Does Your Win/Loss Report Affect This?

You’ll see this recognized on the win/loss statement, either incorporated into the total without a separate line, or you’ll see the jackpots as a separate line. Some casinos break the information down more clearly than others. The two top casino owners, Caesars and MGM, both break out W2G amounts per casino and those numbers are part of the total win/loss numbers listed.

Other casinos, particularly tribal casinos, generally don’t offer much information so you just get the total win/loss, inclusive of the W2Gs, but the win/loss statement doesn’t reference them specifically.

Have a question? Submit yours here!

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