IGT, Wagerworks and their Megajackpots

[Balthazar]

Why is it ok for them to be able to pay the winner over a 20-years period? How do we know if they are going to be around in 20 years? Hell, we don't even know for sure if the internet will still exist 20 years from now. This isn't the state lottery.

Assuming that they are putting the jackpot money aside (since a % of the RTP goes directly in there), why are they taking 20 years to pay the winner? I mean the money should be physically available now (unless it's automatically "reinvested" somewhere else? ).

I remember reading about that Canadian woman that got more than half of her progressive jackpot money stolen (more than $2M) by some suspicious casino because of similar terms. Not saying IGT is dishonest, but 20 annual installments shouldn't even exist in the online gaming world. Not at this point anyway.

Just my 2 cents.

 

[conker]

It's a good question and I suppose the answer is that there is no specific laws or regulations governing jackpots. If players were a bit more aware of this drip-feed payment then they would possibly not play IGT's jackpot slots, but that is probably wishful thinking.

I believe IGT would pay every single penny of a jackpot, assuming they are around in 20 years. The player you mention in your post won a jackpot from a different provider, who have a different way of doing business to IGT - IMO.

 

[Osloking]

this reminds me of eurolotto.com, they advertise so much in norwegian tv about the big jackpot and the 25€million, so many norwegians thinks they get all the cash in one check if they win.

but the fact is if you go to their T&C they have wrtitten : The lottery jackpot is paid out as an annuitized prize of 30 payments over 29 years

the only reason they do this is because they are greedy and they can earn intrests from this huge amount of money, let see 4% of 25mill = 250.000€ each year X 29 = 7.250.00€ in intrests for this period.

 

[rainmaker]

Why is it ok for them to be able to pay the winner over a 20-years period?

It is OK since they are only following US laws. The general rule for accredited casinos is that progressive jackpots should be paid in "timely manner", but this does not apply for IGT jackpots since it is not something IGT casinos or IGT themselves have decided. They are only following the laws

 

[Balthazar]

It's a good question and I suppose the answer is that there is no specific laws or regulations governing jackpots. If players were a bit more aware of this drip-feed payment then they would possibly not play IGT's jackpot slots, but that is probably wishful thinking.

I believe IGT would pay every single penny of a jackpot, assuming they are around in 20 years. The player you mention in your post won a jackpot from a different provider, who have a different way of doing business to IGT - IMO.

I'm not comparing IGT to that casino, but she lost her money because of the terms. If she had been paid in full when she won her jackpot, she wouldn't have had any problem.

 

[Balthazar]

It is OK since they are only following US laws. The general rule for accredited casinos is that progressive jackpots should be paid in "timely manner", but this does not apply for IGT jackpots since it is not something IGT casinos or IGT themselves have decided. They are only following the laws

Please Rainmaker. They are in UK and the US laws forbid online gaming. Don't tell me that thet had no choice but to follow some obscure jackpot US laws (I'd be very curious to read this law btw, even if it doesn't apply to them, if you have the link).

 

[rainmaker]

Please Rainmaker. They are in UK and the US laws forbid online gaming. Don't tell me that thet had no choice but to follow some obscure jackpot US laws (I'd be very curious to read this law btw, even if it doesn't apply to them, if you have the link).

I myself are no expert when it comes to IGT games (not allowed to even open these games), but Casinomeister wrote this in a MrGreen thread 8th June 2011, when a member asked about why IGT jackpots are paid over 20 years (so I have assumed this is correct):

This means that it is a policy directed by the software provider - not the casino management itself. Wagerworks is owned by IGT - an American company, and their jackpot payouts are determined by whatever US laws they have to abide by. You know, land of the free and all that.

 

[jetset]

I'm with Balthazar on this contentious subject, which comes up from time to time.

I think Microgaming and Cryptologic were paying out in full last time I checked, and there was some doubt about whether Playtech was allowing its licensees to stagger payments over extended periods.

My personal view is that the company should structure any progressive offer so as to pay out in full - 20 years (or even 10 years) is a long time to hang around for both casino and player, and delaying full payment is really passing the risk to the player with none of the reward in terms of interest on the capital amount.

The money in the jackpot belongs, imv, to the players who have been contributing to it in trying to hit the damned thing - usually for years.

If a casino does not intend to pay out its progressives in one tranche, I believe that this should be made very clear on the machine and not buried somewhere in the T&Cs, because that is a factor that could influence whether the player uses that progressive or goes somewhere else that has a more timely policy.

If players are fully informed that any progressive win will take some time to be paid out, then by continuing to play imo they are tacitly accepting that condition...but how well do the integrity-challenged communicate exactly how their progressive is paid?

It's an interesting subject, and I wonder whether anyone has researched the major operators to find out who does and who doesn't pay out in full - that would be really useful information.

 

[Balthazar]

I myself are no expert when it comes to IGT games (not allowed to even open these games), but Casinomeister wrote this in a MrGreen thread 8th June 2011, when a member asked about why IGT jackpots are paid over 20 years (so I have assumed this is correct):

This means that it is a policy directed by the software provider - not the casino management itself. Wagerworks is owned by IGT - an American company, and their jackpot payouts are determined by whatever US laws they have to abide by. You know, land of the free and all that.

Thanks for your answer. I've been spending the last 30 minutes trying to find an US law that would force a casino or any kind of lottery to pay a jackpot in installments but I couldn't find any. Honestly, I don't think that it exists, since some big US lottery winners have taken "lump sums" of over a hundred million dollars. It wouldn't make sense to allow that then force others to make installments for 2M jackpots.

 

[rainmaker]

Thanks for your answer. I've been spending the last 30 minutes trying to find an US law that would force a casino or any kind of lottery to pay a jackpot in installments but I couldn't find any. Honestly, I don't think that it exists, since some big US lottery winners have taken "lump sums" over a hundred million dollars. It wouldn't make sense to allow that then force others to make installments for 2M jackpots.

I have reported my own post to Bryan (so that he sees it). Maybe he could give us some more info on this

Jetset: Yes, I agree with what you wrote. I personally would not play any of these progressive jackpots that would take 20 years to pay out if I won. IGT is of course very reputable and all of that and they will most likely be around for maaaaany many years. But 20 years is still way too much. Most players will probably agree with Balthazar's first post.

 

[Balthazar]

If a casino does not intend to pay out its progressives in one tranche, I believe that this should be made very clear on the machine and not buried somewhere in the T&Cs

It's pretty clear on the IGT casino websites actually. It's even written on the front page right below the Jackpot amount. I don't think that they are being dishonest about it or trying to hide it, but having this kind of T&C, even when it's crystal clear for the players, doesn't make it OK or fair. Like you said, it's the players money. That money should be (and hopefully is) put aside. Since it's the players money and it's available, there's no reason not to give it entirely to the player right away.

I know that some land based casinos are doing it to with MegaBucks (among others), but I trust that these casinos will still be around in 20 years. Plus the Nevada Gaming Commission is highly involved in monitoring those jackpots and making sure that the winners are getting paid so it's not the same risk for the players at all.

 

[vinylweatherman]

I have never heard of an IGT casino reneging on an installment, but many Playtech and RTG casinos have, and it seems there is nothing to stop them getting away with it. It is this lack of an independent body to ensure that a jackpot is paid fully over those 20 years that creates the worry.

The Canadian woman got half, because the casino gave her an ultimatum that was half now in one lump, or the whole lot in 20 years. The casino in question didn't survive 6 months after this, let alone 20 years. When Will Hill took them over, they could find no trace in the accounts of what happened to the other half, which after all belonged to all the players who had contributed, and if not paid out, should have gone back into the pool.

I am sure that with IGT there is the option to take a reduced amount up front as opposed to waiting the full 20 years. I also believe they pass the risk over to an annuity provider, so that even if IGT go bust, the jackpot is still paid out over those 20 years. Unlike casinos, an annuity provider will be tightly regulated, and thus much more likely to keep up the installments than a casino, or even the software provider.

 

[Balthazar]

The Canadian woman got half, because the casino gave her an ultimatum that was half now in one lump, or the whole lot in 20 years.

Actually, it was 49 years. Yep. Think about it. Fourty-nine years. If terms like this aren't made to eventually scam the money from the players, then it's very close.

When Will Hill took them over, they could find no trace in the accounts of what happened to the other half, which after all belonged to all the players who had contributed, and if not paid out, should have gone back into the pool.

That's the problem. Not paying the money entirely leads people to believe that the money is just no longer there and the progressive jackpots are some form of Ponzi scheme, where they use the money from the new players over the upcoming months/years to pay the installments.

 

[The Dude]

Hi all,

I'm in Vegas at the moment attending the G2E and made a special trip back to the exhibition to ask this question. I spoke to one of their reps, and yes this has to do with IGT being a US based company. Most if not all lotteries/jackpots given out in the states have specific tax laws and other banking policies directed towards them. Even though a jackpot may be parceled into 20 years of payments, the actual cost of the jackpot win is offered as a lump sum payment.

Hypothetically speaking: let's say a jackpot is listed as 20 million. This is what the jackpot would be worth in twenty years if paid out over this time including interest etc. This is the jackpot as it is listed within the games. The actual cost to IGT for this jackpot is 15 million (hypothetically speaking, folks), and this is what is offered to the player as a lump sum payment if he wins. All players have this choice.

This allows the casinos (and lotteries) to list huge jackpots, and players are aware of this since it is stated in their terms. If a player dies during the 20 years, the funds go into a trust to be paid out to his survivors. IGT is a pretty solid company. I would not be too worried about them being around in the next twenty years.

This is no way comparible to the issue with Sylvia P. who had her jackpot win stolen from her from the owners of Joyland casino (before William Hill). They had a bogus $9k a month payment plan going - to include progresives. They insisted for her to accept this (it was a $4.1 million win) - it would have taken 38 years I beleive. When she told them this was unfair, the casino manager cut a deal with her privately (using a yahoo email address) that gave her half of the winnings as a lump sum payment. (I still have a copy of all the emails by the way). Playtech did nothing about it. And when Joyland was sold to William Hill, the owners took the funds with them.

 

[Jennifer]

This is no way comparible to the issue with Sylvia P. who had her jackpot win stolen from her from the owners of Joyland casino (before William Hill). They had a bogus $9k a month payment plan going - to include progreesives. They insisted for her to accept this (it was a $4.1 million win) - it would have taken 38 years I beleive. When she told them this was unfair, the casino manager cut a deal with her privately (using a yahoo email address) that gave her half of the winnings as a lump sum payment. (I still have a copy of all the emails by the way). Playtech did nothing about it. And when Joyland was sold to William Hill, the owners took the funds with them.

wow this is the first time I heard about this. Unbelievable (well not really but you get what Im saying )

 

[rainmaker]

I'm in Vegas at the moment attending the G2E and made a special trip back to the exhibition to ask this question.

Thanks for clarifying this Mister Meister (and for taking the time for a revisit to the exhibition only to ask this question!!). Much appreciated

 

[Balthazar]

Hypothetically speaking: let's say a jackpot is listed as 20 million. This is what the jackpot would be worth in twenty years if paid out over this time including interest etc. This is the jackpot as it is listed within the games. The actual cost to IGT for this jackpot is 15 million (hypothetically speaking, folks), and this is what is offered to the player as a lump sum payment if he wins. All players have this choice.

Thanks for the reply Bryan. It's good to know that the Jackpots listed on IGT are what they are going to worth in 20 years, and not the actual amount of money that is available now.

I still think that the US laws allow them to do that, but doesn't force them to do it.

 

[vinylweatherman]

Thanks for the reply Bryan. It's good to know that the Jackpots listed on IGT are what they are going to worth in 20 years, and not the actual amount of money that is available now.

I still think that the US laws allow them to do that, but doesn't force them to do it.

Quite, IGT are not even allowed to let US players play the games online, and in other countries lottery wins are paid out in one go, so for players there, this rule seems very odd.

Why not, for example, just list the jackpot as 15 Million and pay it in one lump, rather than list 20 million and have to justify this as it's value over 20 years. In the end, IGT is a private company, and no matter it's reputation now, it could be gone in 20 years.

Had you asked this question about some of the big US banking institutions in 2006, nobody would have even thought they would no longer be around in 2012 as they had been around "forever" and were solid companies. This assumtion almost brought about the end of the world as we know it. IGT could screw up big time, go bust, and leave a string of unpaid jackpot winners. I would take the 15 million up front, I am sure I can invest it to get back 20 million over 20 years, as well as split the risk between many investments.

At least players have this choice of whether to take a reduced sum up front, rather than worry that IGT won't be around for 20 years. Sylvia P didn't really have that choice, the private deal was a con to allow management to walk away with half rather than pass it on as assets to Will Hill. Maybe they cut this deal because they KNEW they would have to sell out within a few months, and as this player was complaining so much, thought they stood a chance to pocket a million or two by trying to cut a deal. By using a yahoo email address, it looks like this was an "under the counter" arrangement that was never meant to appear in the accounts, so that an eventual buyer would not be asking where the 2 million went. The management then appeared to erase all the evidence from the books, so when Will Hill were asked to look into it after they bought the group, they could find no trace of what happened other than the statement that the player was paid under a negotiated arrangement, and the case was closed.

 

[P.V.]

A bird in the hand is worth two in the bush!

At least players have this choice of whether to take a reduced sum up front, rather than worry that IGT won't be around for 20 years.

It's better to have a lesser but certain advantage than the possibility of a greater one that may come to nothing.

 

[Balthazar]

It's better to have a lesser but certain advantage than the possibility of a greater one that may come to nothing.

I think the best option would be to show the amount of money that is available now, though. Not what it's going to be in 20 years if you leave it in the casino's hands.

 

[P.V.]

I think the best option would be to show the amount of money that is available now, though. Not what it's going to be in 20 years if you leave it in the casino's hands.

I just chimed in, not sure of the entire issue here. But, here in the US, i think this is correct, if you win the Power Ball jackpot you have an option. One is a lesser amount now vs. over long term.

Reason being over long term with the Power Ball, if you die the funds stay with them and not to your family so why not get what you can now?

BTW - No business is guaranteed to be in business 20 years from now.