Chainsaw Hits 1.2M Jackpot

Not saying one is right or wrong, but depending on current marginal rate, you could pay more in taxes taking the annuity. If you are already at highest bracket, since under current law the rates are going to increase in two years, the annuity is likely to pay more taxes. And this doesn’t even consider filing status.

As to the size of the lump sum, generally the payer is indifferent. They are going to spend $x to purchase the annuity or they write you a check for $x. It is also easy enough to find which deal is better since you get can annuity quotes online.

The other think you need to consider is the rating of the annuity provider. Since they need to remain in business and paying for 20 yrs.

He wasn’t pulling. He was jumping immediately to the bonus round. You pay extra to use this feature.

Please recalculate after tax amount invested at $51000 instead of $45600

Wrong. These are almost always, literally never heard of any that were not, fixed term annuities. You die in 3 yrs, your estate/heirs get 17 more yrs (technically 16 more because you would have been paid 4 yrs as this is a zero base function.

Not sure how you arrive at this, because of standard deduction? But here it is:

Summary with Adjusted Annuity:
Lump Sum Option:

After-tax amount invested: $504,000
Future value after 20 years: $1,950,480

Annuity Option (with $51,000 annual after-tax investment):

Annual after-tax amount invested: $51,000
Future value after 20 years: $2,090,745

Agree, not technically a scam, but also not misleading. The state lotteries, the Mega Millions and PowerBall all do the same thing. I remember asking a business law professor about the legalities of listing a jackpot prize that doesn't match what you're actually getting, as it seemed like false advertising. The answer is that they tell you exactly how that figure is reached, none of it is untrue, and people can (and often do) know all of this before they play. Sneaky? Sure. But honest? In the end, also yes. Which oddly was good enough for me.

Not long after that, when Who Wants To Be A Millionaire became a huge thing, a local radio station ran a contest in which the winner would be a millionaire. The catch was that it was a million Turkish lira or Korean won or whatever currency translated to a few hundred USD back in the early 2000s. They weren't even trying to hide it, as it was part of the joke. The promo was meant to sound like one of those old monster truck ads, with the loud high voice alternating with the low, gruff voice. "WIN A MILLION! (in Colombian pesos)" kind of thing.

BS. If its +ev it doesn't matter how much he's down.

If the slot jackpot is so inflated that its 102% rtp hes making $2.50 every time he buys that bonus.

Could take a long ass time to realize that equity (probably never if he doesn't hit the bonus before leaving)

The people on twitter saying he's a huge degen and should have the 20 year payout just have no idea.

I stand corrected... apparently, Chainsaw has been a "loyal patron" of TV for a decade, which is more than I can say – it's altogether possible I last went there in 2014, even though it was my regular spot for a while.

These ai engines are notoriously horrible at math. In this case it appears to incorrectly a poorly offered problem.

First you need to consider real vs nominal return. Generally ignoring taxes, which are always individual, the NPV of the annuity is close to the lump sum because the payer is indifferent. He either pays X to purchase the annuity or writes you that check for X. In your case, the 7% rate is too high. Current real rates are about 2%. You can’t get close to 7% with an annuity.

A better way to answer this is use a site like immediateannuities.com, put in the lump sum offered and see what SPIA that 800k would buy for a 20 year period certain SPIA. Just did this and guess what, a 20 period certain SPIA with an 800K premium and an A or better rated company would pay just under $5100/mont or about $61k/yr. Right in line with the numbers quoted in his Twitter.

You have to do the analysis pretax on a NOV basis because it is impossible to predict your taxes 3 yrs out much less 20 yrs.

The other thing people screw up is using a equity type return for a bond 5y PE analysis AND then failing to account what they could earn on annuity payments each year (which then becomes a FV analysis).

The casino isn’t paying the bank bonus. This lets casino offer big number wins wo the variance risk. I mean it is possible that the very next spin huts the reset min bonus.

But even if they were, even non AP players realize that these types of machines are better EV as the must pay value is approached. They likely don’t know the terms and don’t know when the machine actually is ev+ have a gut feel.

Sounds like Allen was saying it was 3k plus ev play but he was down 12k at the time. Trying to be a bit coy about it being an advantage play

Congrats. Dude's been at it for a long time

Where the next spins are +EV? lol do you also bet on flipping a coin after it landed heads 5 times in a row? There's been plenty of times a machine has "malfunctioned" - google it and you can find tons of cases.

Ok go on google and type in casino malfunction lawsuit - there you will find dozens of cases. Just like an insurance company paying out an insurance claim, casinos will certainly do their due diligence before paying out a big sum like this. Google is your friend.

Yes, lump sum most likely better for most people. It was just hilarious of so many people talking about what the earnings would be on the total lump sum when invested with zero consideration for taxes.

But, isn't Allen a losing player? He was already paying zero income tax this year and I would assume a lot of years. This could be a case were the annuity makes sense because of the high fluctuations of a "professional gambler". But, because of his age and sh**** eating and exercise habits I would think he takes the lump sum.

Lol

Allen having no idea how to invest the money makes me think he really does have some family trust paying his way.

wtf kinda nonsense paying out 800k on a 1.2m jackpot

They may go bankrupt in 20 years?

I don't know if Thunder Valley is an Indian casino and if so they can basically do what they want.

But in non Indian casinos I don't understand how a machine like this is legal.
It's a progressive must hit by bonus but the value goes down at 500k. 499,999 you get in 2024 dollars but one more dollar and the entire thing is spread over 20 years. Total scam.

The first $499,999 should be paying in 2024 dollars and then the rest over 20 years.

Lot of rich people don’t understand their options financially. It’s why financial advisors exist. The fact he has no idea what to do with this money does make it sound like he probably didn’t have this much or more before though or you’re right could have all been in a trust pre set up.

I mean if he already has millions then wouldn't it be logical to add this jackpot to his pot of investments??

No one said you can’t find examples of malfunction. What was said is find times where casinos falsely claimed malfunction and it was PROVEN it was not a malfunction.

Finding dozens of cases online means nothing. You can sue for anything. Given the size of some prizes, people who are victims of a true malfunction feel hurt, they are certain casino is screwing them, etc. with multi million dollar prizes it is easy to find lawyers willing to gamble they can get a settlement or even convince a jury. A jury award against a multi billion dollar company is not prove Can you find CRIMINAL CONVICTIONS, not settlements, of casinos cheating patrons claiming malfunctions?

Something else you need to realize is the larger the prize the less likely that casino is actually paying the prize. These larger prizes are syndicated. The particular casino might not even be in the syndicate. The machines are always checked and logs reviewed. If a prize is voided for malfunction, the casino or syndicate will have specific credible evidence to support.

Wife has won multiple mid 5figure prizes. These are usually not syndicated. But the machines are checked before payout. Even had one voided (casino did provide pretty generous FP as compensation but wife’s layer status probably helped) but they should wife the error code. She did not like it but did not sue either. Why would slot tech partake in such fraudulent activities? Somewhere, sometime ar p*ssed off price employee tech wo7ld have been a whistle blower.

Now some illegal casino unregulated is a different case. They are already operating illegally and effectively defrauding the state why should you be any different.

I hear this Indian casinos can do anything they want. This is far from true. They don’t have to answer to state gaming, but they do have written rules. Those rules must conform to federal laws and regs and they do h@ve to follow those rules. Sure they may write those rules more to their advantage than state regulated casinos but those rules still must be approved and reviewed by govt.

As to your payout rant, I don’t even understand why you think some min current pay out is required. But the fact is the terms are clearly stated on the machines. You might have to look and even press some buttons but it is there. If you choose to play a game wo knowing the rules clearly available that really is your choice.