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Why a Jackpot Winner Blows Their Money

We going to take a guess that everyone who has ever entered a casino will, at some point, wonder what they might do if they were a jackpot winner. Whether seated at the card table, or pressing the button on a slot machine, that next card or next stoppage of the spinning reels might be the moment when everything would change for the better. Or would it? It's an unfortunate fact that many winners actually end up in a worse position than if they hadn't won in the first place.

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Many of the jackpots won, though large, are not large enough to sustain a life of idle luxury. Sure, know yourself out with a new car or a kitchen refit or a holiday. But buying a Lamborghini or a mansion comes with some serious maintenance costs. Rather thsn looking for a means of investing or stretching their prize money over the course of a lifetime, many have burned through it all in just a couple of years.

These are some of the biggest reasons as to why such huge sums can disappear so quickly.

Jackpot Winner Buying Depreciating Assets

For the majority of slots players, Rolex watches and Louis Vuitton handbags are well out of financial reach. Most of their salary is spent on a mundane day to day expenses of rent, food, and utilities. What’s left they feed into the slots machine! Having a sudden win makes them feel financially invincible and so the spending starts. Buying a Ferrari or any other expensive toys is always a bad move. These are depreciating assets and are worth a lot less the moment you drive them off the lot. Yes, of course, there’s some short term happiness. It’s noticeable that the moment these same winners get into financial difficulties, they try and sell these once prized possessions. Of course, they never bring in the sums imagined by the seller.

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Giving Money to Friends & Family

Most casinos allow you to claim these huge jackpots and remain anonymous. Still, there are enough people who want to brag and show off. They feel a sudden pride in their elevated worth. They want the great unwashed masses, as they once were themselves, to know that they are moving to more refined pastures. But, for sure as eggs are eggs, the moment family and friends discover your new-found wealth, they’ll be bugging you for this and that. Some might ask nicely, and others may demand a share more forcefully. After all, you are all a family. If can be very difficult to refuse a family request. But this is a sure-fire means of seeing your cash prize shrink.

Jackpot Winner: Investment “Opportunities” Come Calling

They say that behind every scheme there stands a schemer. There will be an endless cue of people asking for money for this investment and that. Your money can help them launch their dream business. There will be offers of this investment fund or that tech companies shares. The average winner at a slots machine is not an angle investor. just like playing at the slots machine, many of these “opportunities” will bear no fruit and you can say goodbye to your investment.

Taxes Take Away a Big Chunk

The taxes paid on casino winnings will vary around the world, though there will be one constant; taxes. In the US the tax rate on a win at the slot machine is a flat 25%. Some states also demand a share as well. But the taxes don’t just stop there. If you use any of the money to upgrade your home, then there will be property taxes to pay. If you gift any friends or family more than $15,000, then there’s tax to pay. A smart winner would hire a tax accountant and a lawyer before they touch one penny of their win. These professionals are trained to deal with large sums of cash and can help the winner avoid any of the usual pitfalls. Yes, they are expensive. But the idea is that they will leave you in a better position than if you hadn’t used them.

Jackpot Winner: Terms and Conditions Reduce Winnings

If you win one of those huge progressive jackpots, then know that it’s not the actual casino that’s paying you out. The software company has that honor. There will be terms and conditions for the payout, so don’t assume that you just need to turn up with a suitcase for your cash. IGT’s Megabucks, for example, gives winners the following choices:

Take a lump-sum payment worth half the jackpot amount.
Monthly payouts stretched out over 25 years.

So the first option has an obvious downside by only delivering half the prize. So a $10 million jackpot will only be worth $5 million to you. With the second option, the funds will be worth far less as they will be diluted by inflation over the next 25 years.

Jackpot Winner: Playing More Slot Machines

Elmer Sherwin is the ultimate slots player. In 1989 he hit $4.6 jackpot. He just kept playing. It took a while, but in 2005 he had another win of $21.2. What a boss! On the other hand, there’s the story of Sheila King. Initially winning $300,000, she kept on playing. With good fortune, she builds up a multi-million dollar empire. But easy come, easy go. Eventually, she lost it all and even ended up suing Caesar’s Palace.

Wined & Dined by Casinos

Caesar’s palace took note of Sheila’s win and made sure to give her superstar status on her every visit to the casino. They offered her every perk possible, including a Mercedes convertible. Just as long as she kept playing at the high stakes slot machines. They treated her like a queen until the very last dollar was gone. later she was to be unsuccessful in suing them. She claimed that they tampered with her slot machine whenever she took a break.

There are some winners who, after hitting the big one, never set foot into a casino again. But they are in the tiny minority, as the lure of the casino lights and deep pile carpet never has always had a stronghold on others.

Losing Sight of the Value of Money

It’s not really that surprising that some people would take a different view of their own lives after a huge jackpot win. The bigger the win, the greater the disconnect. Spending money like water with expensive clothes and jewelry, with luxury cars, these people have never experienced real money before and they spend it as if the well will never run dry. And it’s only when it’s all too late that they suddenly realize why they were never rich before playing casino games. They were always poor with money.

Bad With Money to Begin With

This follows on from the above. Those that go to the casino to play slots may be good with money. They may observe a strict code of spending limits whilst gambling. But many do not. In fact, they gamble because they are bad with money. In other words, they are looking for a Hail Mary event because they think that’s the only means by which they can change their lot in life. Most of those types of people have little experience with large sums of cash. If they really were financial wizards, then they wouldn’t be gambling in the first place either in the lottery shop or at the online jackpot sites.

Essentially it’s the same way of thinking that leads to spending money in the casino, that’ll lead to losing it all within a very short time span. Casino winners tend to look at extra money as something that must be spent….normally in another slot machine.