Part IV: Financial Fraud · Chip, Cash & Ticket Fraud · #5.19
Jackpot Claimed by a Stand-In (W-2G Substitution)
How it works
A large win that the casino has to report (on IRS Form W-2G for a slot jackpot, or a currency transaction report for a large cash-out) is claimed or cashed by someone other than the real winner. Either the winner wants the tax form or the report in another person’s name, or a launderer pays the winner cash for the win and claims it, so dirty money returns as a documented gambling win. FinCEN lists a version of this as a red flag: a big winner enlists another person, who is not a partner in the gaming, to cash out part of the winnings so that a currency report or a W-2G is avoided.
Where it appears
Slot jackpots and other wins that require a W-2G; large chip or cash redemptions at the cage
On the record
FinCEN listed this pattern in its 2008 casino red-flag guidance. The same idea is known in lotteries as “ten-percenting”. In May 2023 a Massachusetts father and son were sentenced to five years and 50 months after a jury convicted them of conspiring to defraud the IRS and to commit money laundering: they had claimed more than 14,000 winning lottery tickets bought for cash from the real winners, causing more than $6 million in federal tax loss.
Detection & preventionADVISORY
The paid halfHow a monitoring room catches jackpot claimed by a stand-in (w-2g substitution), and what stops it recurring, written for the desk, not the reader.
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Sources
- FinCEN Guidance FIN-2008-G007, Recognizing Suspicious Activity - Red Flags for Casinos and Card Clubs (31 July 2008)Regulator document
- IRS Criminal Investigation - Watertown father and son sentenced to prison for decade-long lottery and tax fraud scheme (22 May 2023)Enforcement record
Sources last checked 2026-08-14
Published as a detection reference for surveillance, compliance and gaming-operations professionals. Thresholds and tuning are set by the property. Nothing here is instruction: the method is described so it can be recognised.