Originally Posted by accountinquestion View Post
Originally Posted by DGenBen View Post
Originally Posted by mickeycrimm View Post
The entire Illinois Video Lottery is structured to never issue a W2G. It's Class III gaming. It's sanctioned by the state which takes a 30% tax off the win of every machine. The slot route operators own the machines and lease them to the bars, restaurants, gas stations, stand alones, for 35% of the win. That means the businesses get 35% of the win but have to pay all the overhead. Each business is allowed 5 machines. There are over 7000 locations in the state. So over 35,000 machines. There are cash out kiosks at every location so employee's have no interaction with the gamblers.

The max bet is $4 and max line pay is $1199. Here is an example of what is different in the Illinois Video Lottery from every other jurisdiction in the country. Take the game in the pic below, Wold Run Eclipse. Say you are betting $4 per spin. And let's say you hit the 101 Mega Free Games. Those games have an average value of 12 units per spin. So if you are lucky enough to hit them you are going to rack up somewhere around 1200 units. Since you are betting $4 you will rack up somewhere around $5,000. When you are finished with the spins the machine will lock up for a handpay. That's because the total of money won on the free spins is attributed to the spin that won the free games. But not in the Illinois Video Lottery.

Because in the Illinois Video Lottery the "Free Games" are not really free. You are charged either 1 penny or 1 nickel per "free spin" depending on the game but paid per the $4 payscale. That makes all the "free spins" independent of each other. And since the max line pay is $1199 there are no W2G's involved.

I actually seen a person hit the 100 free games on Wolf Run Eclipse, rack up $5000 then cash the ticket as accumulated credits in the kiosk.

The Illinois Video Lottery was one of my honey holes for years because there were a lot of exploitable video games. But eventually other AP's caught on and the competition means the money ain't so great anymore.

So this structuring in Illinois has been going on for about 10 years or so and the IRS has permitted it. If they allow it in Illinois there shouldn't be anything stopping casinos in other states from doing it. Why they don't is beyond me.
Good stuff!

I am guessing the reason more places don’t do this any more is slot players today are just too unsophisticated to understand it so its not a priority for casinos or manufacturers.

I forgot the details, I’m sure I could find them if I really tried but there was a high limit game that came out a couple of years ago that attempted to do just this,

If you won a wheel spin you very virtually guaranteed to get $3,000. But to avoid W2Gs when you got the wheel feature you would get 3 wheel spins that you had to pay for separately but all spaces were $1,000 and one space which would land very rarely was $100.

I saw it installed at a few places and then no one was ever playing it probably because they didn’t understand it and it was quickly removed.

I’m sure I have some of the details wrong but the gist of the story I’m sure is correct.

I remember looking at it to see if it was APable if someone hit the spins but cashed out before paying for the other spins and I don’t recall what I found out other than I didn’t see any opportunity
But when you lose $10k a year then have to pay taxes on $9k it tends to stick with you and get you off gambling. I was talking to an ex of mine a bit ago and apparently her husband is very anti-government. She told me how she thought we'd get along - lol. Apparently it all came from "some sort of jackpot he won at the casino" which was taxed later.

So while I don't disagree with you I do think it has the ability to really turn people off from slots.

I mean if you are much of a slot player and you have to deal with W2Gs every year ... it really is signficant.

Although I suppose you'd need the majority of manufacturers to be on for it to make a big difference. If I was CEO type though I'd seriously go down this rabbithole though of "Penny spins". Great pitch for your brand to casino reps.
All very good points but since most people lose & many people use a tax preparer for taxes I don’t think taxes on W2Gs is something most people worry about.

I do understand they can screw up deductions and AGI too, but when I was a pure degenerate losing gambler I just didn’t care about tax consequences of W2gs. It was just a cost of (not doing business) but entertainment.

And you also have to remember that people that would generate a lot of W2gs playing slot machines that average 85-90% payback are not rational financial actors to begin with.