What Is a Progressive Jackpot?
Progressive jackpots are pay-outs on gambling machines, like slot machines or video poker machines, found in casinos. The machines are marked as progressive jackpot machines, so a player knows it’s a progressive machine before they sit down to play.
The total of the jackpot winnings increase by small increments each time the machine is played. These increase limits are set by the casino. Often, a group of machines are linked, so the total increases quicker with several players playing different machines at the same time.
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Each machine has a meter that shows the jackpot amount, and winning combinations needed. For instance, on a slot machine you might need 5 cherries showing to win. When a player wins the jackpot, the meter resets to a minimum level, and the process begins again.
Players usually have to bet the maximum wager per play to qualify for the jackpot winnings. If the maximum is not bet, the bet still contributes to the jackpot, but the player will not be allowed to keep the jackpot winnings if it should hit on that play.
The Benefits of a Progressive Jackpot Machine
Casinos have progressive jackpot machines to entice players to play, but the number of machines are limited within the casino. The casino is willing to contribute a small percentage to the progressive jackpot winnings, but the odds always favor the casino.
Players like progressive jackpots because if they win, they win big. The size of the jackpot can grow quickly, from hundreds to thousands. Players will risk their losses from feeding the machine for a chance to hit the progressive jackpot.
Progressive jackpot machines don’t pay out jackpot winnings that often, since the increases are preset by the casino. The machine needs to be played a while. Your odds of winning faster pay-outs are better on regular slot machines, not progressive machines.
How Does a Progressive Jackpot Work?
When a progressive jackpot hits, several things will happen. The machine locks up, lights flash on and off, and the player is advised to call an attendant. The machine sends an electronic signal to the control room, so the casino also knows about the win.
Most progressive jackpots pay large winnings, amounts from $10,000 to $1,000,000. Before winnings are paid, the casino will send someone to verify that the machine was operating properly when the jackpot was hit. The casino must verify an authentic win.
With jackpot wins, the player can be paid in cash or check. With larger pay-outs the winnings could be split. A partial pay-out may be paid by check on the day of the win, then the player has a set time, 60-90 days, to collect the rest in a lump sum or an annual annuity.
All winnings over $1,200 are reported by the casino to the IRS. The player will receive a W-2G form from the casino, and the amounts shown on that form must be reported on the player’s tax return to the IRS.