What Happens When You Win a Jackpot?

The Southern California Gaming Guide's, www.TheGamingGuide.com, April issue has a neat article describing what happens when a player actually wins a big jackpot.  Before that, what is this publication?  This magazine is geared for the casino player here in Southern California.  It has information on the various local tribal casinos such as: where they are, driving directions, bus pickup locations and schedules, special offers, etc.  It also highlights recent jackpot and other notable prize winners (free cars, etc.).  For the local casino patron, a pretty good place to shop around if you're looking to partake in casino gaming.

In this issue, there's a short article on what happens when you win a big jackpot.  The article describes in more detail, but what happens when a large jackpot is hit boils down to a few things:

1. Is the jackpot legitimate
2. Pay the taxman
3. Pay the player

What happens when a big jackpot is hit is that the machine will alert the casino and slot manufacturer (assuming a wide area progressive) that a jackpot has been won.  At that point, both the player and machine are secured by casino staff.  The machine is put out of service until the slot manufacturer's staff can verify the machine is working normally and that the jackpot result was a normal result, and not the result of an external influence.

At the same time, the player needs to wait.  But the casino will treat the player right and typically have them relax in the VIP area (as of course the player IS a VIP since they've won a big jackpot)!  They might be offered a room and other perks, but at minimum, they'll be lounging in a great spot, and will be eating some great food while awaiting verification of the jackpot.

When that is complete, its paytime!  Well, not for the player, but for the taxman.  You see, taxman wants their money (or at least know who you are and how much you have won so they know how much they'll be getting).  Depending on the jurisdiction, withholding amounts can vary.  The casino will have the player provide identification and fill out tax forms.  After that, and if there is any withholding, then the player will be given a choice to take the payout in a lump sum, or in installments.  Depending on the choice, that will impact the amount of withholding and timing of the payout.

What isn't mentioned in the article, but also another step would be the celebratory pictures and things like that, which again goes right back to the fun and excitement of winning.  The casino wants to trumpet big winners and of course the player wants to have that picture of them with their winning machine and a big cardboard check showing one and all how much they've won!  Woo Hoo!

New Legal Brief Supports New Jersey Sports Betting

The libertarian Cato Institute and the Pacific Legal Foundation have filed an amicus brief in support of New Jersey's appeal to the US Supreme Court over its desire to offer legal sports betting within the state.  This is an interesting development as this brief is being done by third parties, with no direct stake in the matter.

It is unknown how much weight this will bear on the case, but for a well-regarded think tank to step into a case like this must be welcomed by pro-sports betting interests.

The story on this development can be found here.

Nevada and Delaware Interstate Poker Agreement not Enough

Nevada and Delaware signed on online poker compact last week.  This compact (read: agreement) means that residents of these states can play online poker against each other.  So, online poker operators in both of these states can accept players from either state.  The USA Today story on this agreement can be found here. 

This is a good thing, but it really isn't sufficient to make Nevada or Delaware online poker a big money maker.  Why?  Because the populations of these states are just too small.  Nevada has approximately 2.75 million people and Delaware has approximately 917,000 people.  This is barely 1% of the 316 million people in the USA.  For Nevada and Delaware to really get critical mass, they need to have deals with more states.  I don't see that happening.  If I was a governor of a larger state, I wouldn't necessarily compact with Delaware or Nevada because I won't get as much value from them as they get from me.

If you take the population of Nevada (rank 35 of 50) and add the populations of every state that is smaller, which includes Delaware (rank 45 of 50), you barely break 20 million.  Now 20 million isn't necessarily bad, but you have to have those 15 states working together and agreeing on the deal to get to an aggregate 20 million population.  To put that into perspective, that number is just slightly larger than the population of Florida (rank 4 of 50), which has a population of approximately 19.5 million.

Nevada and Delaware have to somehow get agreements with larger states to feed off of their larger populations before the larger states get wise.  I don't think that will happen.  I foresee something different. I predict that the four largest states will eventually work together and craft a compact just among themselves.  Those states are California (38.3 million), Texas (26.5 million), New York (19.6 million) and Florida (19.5 million).  Add that up and you have approximately 104 million, almost one-third of the entire US population.  THAT is a good number and you only need four states to work together.

Illinois and Pennsylvania are both a bit above 12 million in population, but that is a big drop from over 19 million.  If I were those four states, I would just work together and perhaps add Illinois and Pennsylvania, which would put the total size of the "Big 6" network at just under 130 million.  This is a large enough number that would be sufficient to have a good population of online poker players.  Then, that group could then cut deals with other countries.

With online poker, size DOES matter.  California, Texas, New York and Florida have it - Nevada and Delaware don't.

Nevada Gambling Hypocrisy On Parade

Here are a couple of recent stories that highlight the hypocrisy that arises when you deal with an industry that has a strong regulatory component.  These stories are in addition to my recent post regarding casino heavy hitters fighting each other over expanded gambling, which you can see here. 

The first story details the news that Nevada's senators (one Democrat, one Republican) are teaming up to introduce a bill to outlaw all online gambling in the US except for poker.  Why?  Because they are trying to stop the "wild West" of gambling.  You see, yes they are doing this to protect their Nevada casinos, but you shouldn't only think of their more noble motives of protecting YOU from evil gambling.  As you of course may realize, Nevada only offers good and pure gambling...so that's OK and should be protected.

This bill is going to be bi-partisan because, let's be clear, the Democrat, Harry Reid, isn't very popular among Republicans, which is probably an understatement.  He needs his fellow Nevada senator, a Republican, to help weasel this bill through.  Of course, the bill would also have to get through the House of Representatives, but one step at a time.

My view is that this bill shouldn't get through the Senate, but it indeed may.  When?  After the November elections during Congress' lame duck session.  This bill will be inserted into another bill that due to its content would be deemed a "must pass" bill.  Think of something like a bill to authorize the budget for the armed forces, or removing a tax impediment for disabled elderly people.  No one will stop those bills, so Harry Reid as Senate Majority Leader will add this bill to that one and force people to vote for this or they will be viewed as hating old people, the military, etc.  Watch for the news on this bill to go very quiet until after the election, then watch these lame duck bills come up in November and December.  The article on this bill can be found here.

Now, where's the hypocrisy?  Well the Nevada view that their gambling is good and everyone else's is bad is hypocritical, but let's add in the other story to buttress the hypocrisy.  This story discusses how Nevada regulators are allowing slot players to use prepaid access cards.  Now similar means are used for sportsbook and poker players, but doing this with slots isn't exactly the same.  It would take some time for a sportsbook player to place their wagers, similar with a player in a poker game.  Slot machines are fast.  You can get a new spin about every 6 seconds if you're fast enough.  Also, sports betting and poker have a skill component, where a slot machine does not.

Here's a quote from the article:

"Here’s how it would work: A player who wants to use an access card in a slot machine would first have to register at a casino with identification that verifies a player’s address and date of birth. Registration would also tie a player to a casino’s loyalty card. Players could then load the cards at their banks by transferring funds from a checking or savings account.  Harry Hagerty, president and chief financial officer of Sightline, said his company’s agreement with banks puts limitations on the amount of money that a player could load to an access card — a maximum of $2,000 a day, $4,500 a week and $10,000 a month, and the most a player could put on a card at any time is $25,000.  Regulators also said a player wouldn’t be able to use the card for at least 15 minutes after transferring the funds."

Wow, very responsible of Nevada to make sure the maximum on a card is $25,000 and they have a whole FIFTEEN MINUTE cooling off period. (sarcasm alert)

Here's the Nevada hypocrisy.  One the one hand, they want to make it easier for people to spend their money on slot machines, ahem, THEIR slot machines, which they must think is a good thing.  On the other hand, they are seeking to pass a federal law to outlaw online slot machines, because those are generally not Nevada slot machines, which of course must be assumed to be bad.

So, in essence, NO NO NO don't put your money in those non-Nevada slot machines because they are bad and evil because they are electronic and online and you could go through your money very fast.  Put your money in our slot machines because we're pure and decent and we limit the money you have on your prepaid card to $25,000 dollars!  Right, I stand corrected thinking about this...no hypocrisy here!  (sarcasm alert)