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Progressive Jackpot Payouts and Casino Software

By: Ryan Alders, Friday April 30th 2010
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Progressive jackpot games are very popular at online casinos. The payouts are not fixed but keep on increasing until the jackpot is hit. In many cases the payouts to run into millions of dollars, which attracts many players. However, before players start wagering in earnest on progressive jackpot games they should be aware of the conditions imposed on the progressive jackpot payments. Generally these conditions are imposed by the software provider and are applicable to all the online casinos powered by that software provider. This article highlights the fact that many online casino software developers have a system making progressive jackpot payments in installments over a period of time.

Microgaming is regarded as one of the best online gaming software developers. This is not only with respect to the casino games they offer but also on issues like fairness and security. Their treatment of progressive jackpot payouts is an outstanding example. Microgaming avers that all progressive jackpot prizes are paid out in one single payment that is made as soon as the verification process is complete. Last year it made a payment of €6.37 million euros to a player who hit the progressive jackpot on Mega Moolah. The payment was made in one stroke. It is little wonder then that progressive jackpots of Microgaming are the most popular.

WagerWorks is another online gaming software provider. It runs a progressive jackpot network called MegaJackpots. This is jackpot also runs into millions of dollars. WagerWorks stipulates that "payment will be in 20 equal annual installments (with no accrual of interest on deferred payments)". The first installment would be paid immediately. Payment spread over 20 years is absurd and perhaps WagerWorks realizes the unfairness of this condition. Therefore it offers another alternative. Players can "choose a reduced lump sum amount based on the present value of the 20 annual future payments." WagerWorks does not specify the interest rate that will be used to compute the present value. However if the interest rate is taken at 5% then the amount payable would be about 65% of the progressive jackpot hit. This would decrease if a higher interest rate is taken by WagerWorks.

The terms and conditions at Playtech online casinos stipulate that "players are allowed to withdraw not more than $9,990 per month." It is also stipulated that if the amount sought to be withdrawn is greater than that allowed the player will have to withdraw the amount in monthly installments. Playtech terms and conditions specifically state that this condition applies to withdrawals of progressive jackpot winnings. This implies that a player who hits a million dollar progressive jackpot will take 100 months or more than 8 years to receive his progressive jackpot winnings in full. Though it is not put down in the terms and conditions it is known that Playtech is amenable to arriving at some sort of settlement as in the WagerWorks case.

There is an issue that often perplexes new players. Why are the payouts of progressive jackpot games controlled by the software provider and not the online casino? This is because the progressive jackpot games are networked across all online casinos of that software provider. A person who hits a progressive jackpot gets the contribution from players who have played the game at all online casinos. Therefore the part of every wager that goes to the progressive jackpot is not retained by the online casino but is forwarded to the software developer. The pool is maintained by the software developer and payouts are made from that pool.

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Comment by: Hero On: May 04, 2010
€6.37 million payout would definitely be an amazing win. Too bad it wasn't more often that we hear about these big wins.
Comment by: Channy On: May 03, 2010
Progressive slots are fun to play but if you think that you'll be winning any of these big jackpots anytime soon guess again. Unless you have an immense amount of luck it's very doubtful that you or I will hit any of the large progressive jackpots offered either in land based casinos or at internet gambling sites.

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