You win money at an overseas casino: how do you get it back into the US?
July 22, 2018 9:13 AM   Subscribe

A good friend's daughter just won a few hundred thousand dollars (I KNOW) playing slot machines in Australia. Like yesterday. He wants to know what's the best way for her to get the money and get back here to the USA. For legal purposes. For tax purposes. For safety purposes. Open up an account in a US based bank with locations over there? A cashier's check? Wire transfer? And what other things should this young girl - who's always made a very modest salary - know right now?
posted by rileyray3000 to Work & Money (18 answers total) 2 users marked this as a favorite

She should just have the casino transfer it to her US bank account.
posted by bradf at 10:12 AM on July 22, 2018

And what other things should this young girl - who's always made a very modest salary - know right now?

Well, she should know that she needs to see a financial advisor. A few hundred thousand dollars could be a life-changing amount of money, but only if used carefully. If I suddenly lucked into that much cash, I'd need someone who could tell me how to get the most long-term value out of it. Used wisely, that money could provide her with a lot of safety, security, and freedom to pursue her interests. Used carelessly, it could evaporate pretty fast and provide no lasting benefit.
posted by Anticipation Of A New Lover's Arrival, The at 10:26 AM on July 22, 2018 [20 favorites]

I've always heard the #1 rule is to tell as few people as possible. It will be hugely tempting to tell all her friends and be a celebrity for awhile, but it seems like the more people you tell, the more heartache, shakedowns, and ugly falling-outs ensue.
posted by nakedmolerats at 10:58 AM on July 22, 2018 [29 favorites]

As Anticipation notes, the important thing is to have a destination for the money. Most people who get major lottery windfalls are actually worse off, or even bankrupt, within a few years. As far as the mechanics, the casino will send it via some form of electronic payment, such as a wire transfer (which tend to be really pricey), ACH (slower but reasonable fees). Usually a routing number and account number can be read off a current check, and the casino will ask for other straightforward information that can usually be found on the bank's website. There will be a nominal fee.
posted by wnissen at 11:00 AM on July 22, 2018 [2 favorites]

She shouldn't spend any money until she talks to a CPA about how it will be taxed (it will be). Until then, she doesn't know how much she actually has.

Unless she is quite poor, a few hundred thousand shouldn't make her some kind of huge target amongst her friends/family, but she should be very quiet about it all while she's on her own in a strange country. If I were her, I'd have more peace of mind leaving for home right after confirming that the money is being transferred (as wnissen describes).
posted by praemunire at 11:48 AM on July 22, 2018 [3 favorites]

CAN the casino just transfer it to a US bank account? Are there more or less fees doing it that way than going through a bank? And who has to file the paperwork for amounts over 10K? Them or the casino?
posted by rileyray3000 at 11:57 AM on July 22, 2018

The casino probably doesn't have to file the 10k report, the bank probably will. Regardless it's just ordinary taxable income.

Gambling isn't taxable in Australia so this won't be of much interest to the locals there.

The casino might or might not be be willing to repatriate it for her for compliance reasons. Only way to know is to ask. Legally they can but it might just be too much of a hassle.
posted by JPD at 12:49 PM on July 22, 2018 [2 favorites]

The best option would be to ask the casino if it is possible to transfer the money into a foreign bank account. They rely on international visitors, so I would be surprised if they didn't have a policy, or at least provide some basic advice.
posted by Kris10_b at 12:52 PM on July 22, 2018 [3 favorites]

It’s unlikely that a foreign casino would be able/willing to do an ACH transfer, but wire transfers are cheap, fast, and reliable. Every business outside of the US transfers money by wire regularly, and a casino will almost certainly offer this as a payout option.

I remember being really nervous about my first six-figure international wire transfer, wondering if one of the banks was going to flag me for money laundering or hold up the transfer to ask a bunch of questions. It turns out this kind of transaction is completely normal and there are thousands of them going through every day. Just report it to the IRS next year, pay whatever taxes are owed, and she’ll be fine.
posted by bradf at 1:53 PM on July 22, 2018 [3 favorites]

Tell the casino what you/she want to do (move the money to the US) and ask them how they do that normally. The costs will be the conversion from AUS to US dollars, the wire fees or SWIFT fees and probably some other fee the casino tacks on. She won a few hundred thousand dollars. If it were me, I would not be concerned so much with the $40 fees. I would probably be willing to give up, up to $1,000 in fees just to get my 200 large back home. HMMV.
posted by AugustWest at 2:08 PM on July 22, 2018 [1 favorite]

On the subject of what the young woman should know...she should definitely sit with this for a bit. I had a high school friend who won $250,000 in the lottery when she was around 18 or so. Her parents were pretty casual about it and let her decide what to do with it (this was about 30 years ago, so that was an even bigger chunk of money than it is today). Long story short, it didn't last very long, and it sure didn't serve her very well in the long term.

So while she should definitely use some of it for fun things, I'll nth those who are recommending a good financial advisor, and that she should spend some time thinking about what she wants to do with that money to get the most out of it.
posted by Preserver at 5:17 PM on July 22, 2018

Just report it to the IRS next year, pay whatever taxes are owed, and she’ll be fine.
Note that if she waits until next year to pay the taxes, she may pay a penalty - US law requires that taxes be paid when the income is earned. If, when she pays her taxes next year, she owes the IRS more than $1000, she may have to pay a 10% extra penalty on the difference. She will probably owe $100,000+, depending on exactly how much she won, how much other income she has, and a wide variety of factors.

So, she needs to get a decent idea of what she owes now, and make an estimated tax payment. The state she lives in may have similar requirements.

The fee-based financial advisor and/or CPA that she hires can help her with this.
posted by Hatashran at 6:24 PM on July 22, 2018 [3 favorites]

She should look up stories about lottery winners. Lots of mistakes to make when you suddenly have a windfall.

Might help to invest a good chunk of it, then just sorta forget about it for daily consideration. I did that when I had a windfall and it helped keep me from blowing it all on impulse stuff.
posted by egypturnash at 6:56 PM on July 22, 2018 [1 favorite]

If, when she pays her taxes next year, she owes the IRS more than $1000, she may have to pay a 10% extra penalty on the difference.

Not as long as the taxes she pays this year are at least 100% of her tax liability last year.

This is why pro advice is good to have.
posted by praemunire at 9:25 PM on July 22, 2018 [5 favorites]

Depending on which state it's in, there will be laws governing how the win has to be paid out. For example, here's the law governing gaming machine payouts in NSW (which includes Sydney). If the payout is over $5k the winner can ask for the whole lot to be paid by cheque or electronic funds transfer.

Are you sure this win happened in a casino, rather than in a random pub/club? Australia doesn't have many casinos, but there are slot machines in most pubs and clubs. If this is in an actual casino, I'd suspect that enough of their clientele come from overseas that the staff will have experience with how to pay out winners from overseas. If it's at a small town pub, I wouldn't expect them to have any such expertise.

I can't speak to tax, bank fees or exchange implications or how this would interact with US law.
posted by escapepod at 4:34 AM on July 23, 2018 [2 favorites]

wire transfer (which tend to be really pricey)

The price of a wire transfer is well worth it for this kind of transaction. You should expect the charge to be less than USD 50.

Above all else, absolutely do not bring the money into the U.S. in the form of a cashier's check or cash. There is paperwork you have to file to bring in large amounts of money that way and if you don't, it can be confiscated. Additionally, if the check is drawn on a foreign bank, once you get the check to your U.S. bank it will take a long time and cost a fair bit of money to negotiate it.
posted by grouse at 6:17 AM on July 23, 2018 [4 favorites]

I'm assuming that, because of the amount, she doesn't actually have the payout yet pending the various verification / certifications that will probably need to take place; everything from reviewing surveillance footage to checking to pulling the machine off the floor and ensuring its EPROM chip hasn't been tampered with.

She isn't the only non-resident to win a large sum of money at that casino, I promise. Best course of action is just to ask them what her options are. They will know and they should be helpful about providing such information when it comes time to pay out. Here are some basic details:

She can bring back to the US any amount of 'Monetary Instrument' - cash, checks, or other negotiable physical thing - but you just need to be absolutely, positively, 100% sure to accurately declare it at customs, including ALL cash and checks being brought back. e.g. if she brings back a $250k casino check and has $500 in cash in her purse, her declaration must specify $250,500 or risk getting hassled at CPB or, worst case, being fined or having part of it confiscated. As long as it's accurate and she's up front about it, it's a simple process and shouldn't cause any issues beyond some extra questions at the border. If available, carry along a copy of any photo or other evidence / paperwork from the casino to back up her declaration.

If they can wire transfer it to her US bank, it is the bank's responsibility to report the transaction to the IRS. She shouldn't need to do much in this case beyond covering the fees. This would be the preferred method obviously. Nobody wants the kind of stress that carrying around $250k worth of anything in their pocket or backpack brings.

In either case, she needs to:
- Immediately set aside around $100k to cover US and state income taxes which she will need to file for and pay.
- Make an appointment with a financial planner. Her bank may have someone available to make an appointment with. I don't feel it's an amount necessitating a retained accountant or anything, just someone that can help guide her with suggestions on how best to protect and invest it for her future.
- Ensure all paperwork for previous, and this, tax years is in order - A large bank deposit from an international source sounds like the thing that could easily trigger an IRS audit.

Oh, and in return for all the wonderful advice everyone provided, a small donation to MetaFilter's community funding plea would be decent of her :)
posted by SquidLips at 7:37 PM on July 23, 2018 [1 favorite]

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