Who's Responsible for Paying Progressive Jackpots?

When a progressive jackpot is won on slots, e.g. Wheel of Fortune and Megabucks, is the casino where it's won liable for all winnings or is it shared between all casinos that participate?

Actually, neither the casino where the big progressive is hit nor all the casinos linked up to the progressive system is responsible for paying off the jackpot.

Rather, as in the case of both Megabucks and Wheel of Fortune, it's the slot maker, International Game Technology (IGT), that pays the jackpot. But in a real sense, people who play the big progressives also pay the winners.

IGT leases these machines to the casinos and from the casino lease payments, the percentage of coin-in that goes toward the reset amount and progressive jackpot, and whatever other deals are involved, IGT covers the jackpots, with annuities or lump sums.

According to WizardofOdds.com, of every dollar played through Megabucks, 11.4 cents is held by the casino, 6.7 cents is earmarked for the meter reset (the $10 million after the progressive is hit), and 3.5 cents goes toward the jackpot amount. That's why we say that, to a large degree, progressive players subsidize the jackpot.

Certainly, IGT invests, and gets a nice return on, its 10.2 cents from every dollar played on Megabucks, so all in all, even though IGT has paid out well above $1 billion in jackpots since Megabucks was introduced in 1987 (the largest of which was $39 million, hit at Excalibur in March 2003), it does fine for itself with its progressives.

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Eileen Jul-07-2021

Megabucks jackpot

Does anyone know if the young man who won the $39M progressive at Excalibur in 2003 invested wisely or went broke like so many people who come into money do?

Kevin Lewis Jul-07-2021

Set fire to your money!!

The total hold on Megabucks machines is 21.6 percent!!!! Only a complete sucker would play such a game.

This is in line with the standard casino mantra of: if any bet/game top pay is very large compared to the total bet, then make the house advantage IMMENSE. That is, however, like so much casino thinking, shortsighted.

You walk around a casino, how often do you see the Megabucks machines actually being played? That's because even the ploppies realize that the game is a ripoff. Imagine a linked progressive jackpot game with, say, a 4% hold! That game would be swarmed, all the time!

Pre-corporate Vegas, the casinos understood that when you offer good games, you make MORE money, not less. All the MBAs in their shiny suits don't comprehend that.

VegasROX Jul-07-2021

.32 cents, Kevin Lewis

Looks like about. 32 from every dollar is accounted for. What about the other .68??  
Kevin, most forms of gambling don't pay off for the majority of folks. One thing to remember, it's someone else's money and you shouldn't let the hold on any dollar spent, should not get you riled up. But, once again, here we are.

Kevin Lewis Jul-07-2021

IGT's share

It's a 32% hold if the take given to IGT is paid directly from player coin-in. I had thought that it was paid from casino profits on the game (which would obviously be a smaller number than gross coin-in revenue).

Either way, it's horrible. Dismissing a huge house advantage as unimportant because "no one expects to win anyway"--well, the casinos are delighted when people think that way. It's the same mindset that caused the lemmings to embrace 6:5 blackjack (and it's worth noting that at first, the casinos thought that no one would be stupid enough to play it).

James Mason Jul-07-2021

mega bucks

Play like I do walk by put in $5 who knows walk away. It a slot machine.

O2bnVegas Jul-07-2021

It is called foresight, Kevin

Decades ago, outer regions of our city was nothing but cow pasture.  Plenty of people thought "no one would be stupid enough" to purchase land there.  Now it is full grown and plenty of people wish they'd bought land (as suggested by the few with foresight) where the flagship shopping center (and more) exist.  Out of town keeps moving out.

Roy Furukawa Jul-07-2021

It's Vegas

No one in their right mind would frequent Las Vegas if they expected to win because all casino games have a house edge. What games people choose just determines how fast they can lose their money is all. I say to each his/her own, if you like slots play them. Just make sure you enjoy yourself as much as possible, win or lose.

Kevin Lewis Jul-07-2021

Oh, really?

Candy, I can't believe you're equating playing a slot machine with buying real estate. The former cannot be considered an investment in any sense of the term.

FWIW, I would imagine that very few people considered buying rural land on the outskirts of a growing city "stupid." But expecting people to play a slot machine that returns 68% might be stupid indeed.

Question of the Day - 07 July 2021

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