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Jackpot

Reviewed by Sujaini | Updated on Jul 27, 2020

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Introduction

A jackpot is a large windfall derived from an act of gambling. In finance, jackpots refer to large investment returns reaped over a short period of time.

Jackpot entered the English lexicon via a 19th-century variant of five-card-draw poker which required a player to declare a hand with a pair of jacks or better in order to open bidding.

Understanding Jackpot

Jackpots are typically subject to taxes. Tax treatments vary based on the origin of the windfall. However, not all jackpots pay out the same way.

For example, some lottery payouts offer winners a choice between a lumpsum and an annuitized payout that offers periodic payments.

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