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Serious question about gambling income


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How are table game winnings such as craps, baccarat and roulette taxed in the USA? Do most players who win regularly even worry about reporting their winnings?

I know a guy who plays craps as a full-time pro ( I have played with him in person several times) and he made over $150,000 last year playing almost every day. He averages between $400-$600 a day.

On another forum someone got wind of his successes and said something like "good luck paying taxes on that" out of envy I believe. The pro player said "if I have to pay taxes on my winnings then so be it".

I don't think he is really concerned about paying or even INTERESTED if he owes taxes or not, and to my knowledge, he hasn't paid taxes on his craps winnings in almost 2 years of full-time play lol.

I am concerned for him as he is a very nice guy and I am also learning from him his method of play and I don't want him or me or anyone for that matter to be in hot water with Uncle Sam for failure to pay a percentage of winnings. I have searched several sites about gambling taxes and can't find a consistent or a pat answer concerning table games winnings.

Do you regular winners worry about it? Should I be?

Thanks for any help and input.

Griff in Atlanta

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Does craps still exist much? I know at one point it was the most popular game in USA but I thought it was pretty much dead nowadays.

We had 1 table in Australia at my casino and that was closed down years ago.

Cant comment on the taxes apart from saying we don't have to worry about that here.

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Does craps still exist much? I know at one point it was the most popular game in USA but I thought it was pretty much dead nowadays.

We had 1 table in Australia at my casino and that was closed down years ago.

Cant comment on the taxes apart from saying we don't have to worry about that here.

Still going pretty strong here in USA. I heard that in big casino towns, Vegas, Tunica, Atlantic City, etc that craps is 10% of all their income. Up in Cherokee, NC 2 and a half hours from me they have 8 tables and they are full on the weekends from what I hear. In Tunica the bigger casinos have probably 4 to 8 tables and I think just about every casino there has at least one table, not sure.

So yes still a solid and decently popular game here in the states.

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In relation to your post on taxes it brings up an issue of how do you explain to people what you do for a living?

Most people don't regard gambling as an occupation

Try going to the bank for a house loan and tell them you play baccarat of craps professionally?

I think it would be better to keep quiet about it.

Maybe people will assume you deal drugs?

We have a law over here if the government suspects you have any assets the government suspects may be from crime and you cant prove how you payed for them they can sieze them.

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In relation to your post on taxes it brings up an issue of how do you explain to people what you do for a living?

Most people don't regard gambling as an occupation

Try going to the bank for a house loan and tell them you play baccarat of craps professionally?

I think it would be better to keep quiet about it.

Maybe people will assume you deal drugs?

We have a law over here if the government suspects you have any assets the government suspects may be from crime and you cant prove how you payed for them they can sieze them.

I found today through some research that there is the "professional gambler" option as an occupation you can declare on your tax reports. I wonder if this is fairly new considering the popularity of pro poker tournaments here now.

From what I understand that may be the way to go, as the max in taxes they can take from your winnings is 15% compared to the 25% (I read on one site) the government wants from the casual/recreational gambler's winnings.

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In the US, all income is taxable no matter how it is obtained and no matter what the amount. I think that is how the feds finally got Al Capone, tax evasion. Even if you win $2.40 on a $2.00 horse bet, you are required by law to declare the $0.40.

If you declare yourself a "Professional Gambler" you prepare a Schedule C tax form showing your income and expenses. And you better have sufficient documentation to back up EVERYTHING.

If you just hit a big win at the tables one night, I think you declare the money as misc. income on Schedule A.

DISCLAIMER: I am not a tax professional nor an accountant. I've just dreamed enough that I really looked into it.

Edited to Add: Yes, it would be very nice to see his method.

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Do you regular winners worry about it? Should I be?

Thanks for any help and input.

Griff in Atlanta

Griff,

The quick and dirty answer is "no". It does not come into play as a baccarat player.

“W2-Gs are not required for winnings from table games such as blackjack, craps, pai gow, baccarat, and roulette, regardless of the amount.â€

However, with that said, one is SUPPOSED to report ALL income (including gambling) on their 1040, but obviously most do not.

If your wife hits a decent slot jackpot, I can assure you when they pay her, they will also hand her a 1099-G if the amount is over $1200.

For the rest of us, take the money and don't even worry about it until you're pulling $5000 a day, every day, from the tables.

Heck, $5000 a week, spread across a few casinos is WAY under the radar.

MVS

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No that is not right. You must LEGALLY pay taxes on ANY income regardless of the source. If you're not a moral and honest person, well the decision to declare your winnings is up to you but any income from any source is required by law to be declared.

Are you maybe asking "Does the casino collect taxes on winnings" and they most of the time do not.

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I believe that if you win over $10,000 in the casino regardless of where you play, the casino notifies the IRS. In the online casinos in NJ, if you win over $1,200 they email you a tax form and notify the IRS. I know this because I won $1,500 in the online casino. I have not yet had the luck of winning $10,000. AS conservative as I play, I don't ever anticipate it either.

Thank you MVS, this helps a lot. Just to confirm what you say here, I contacted another pro player by e-mail Monday and he said the tax you pay on table game winnings is ZERO and slot machine jackpots are the only thing taxable.

Peace,

Griff

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Maybe Ellis, way, oz, Kevin or mvs can add to this topic....this is a really great topic.

I know that the Seminole Hardrock gives me a form to fill out anytime I'm cashing over $9999. Per day regardless of where it came from...usually they ask me where I was playing and verify it with the pitboss....so I learned how to cash out over a period of several days....

But if the goal is to become part of the 10% , how do we best handle this aspect of the game....

What did Norm do when he won routinely in the high limit rooms?

Wonder what advice Ellis and others have for us on this topic.....

I yell "winner winner chicken dinner on all naturals"

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I have very little knowledge of tax on gambling winnings in the US, but as for we Aussies...we pay no Tax on gambling winnings even if it is our sole source of income.

My Accountant laughed and looked at me as if I'd lost my marbles when I broached the subject a few years ago...He's not laughing now.

I am however curious as to how I will be treated (taxation wise) when I play in the US. As an overseas visitor in your country, I'm hoping that I will be tax exempt.

If anyone can shed light on this aspect, it will be greatly appreciated.

Oz

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At least right now, no casino I know of takes out taxes on table games anymore. They used to take out taxes if you went to the cashier with $10,000 +.

But you could go to the window several times if need be. So taxes on table games only applied to huge winnings when the casino carried your chips to the window in chip trays. - Also avoidable. But they don't do that any more so no worries.

Technically, we are supposed to pay taxes on winnings but we are allowed to subtract all loses and expenses first.

The IRS is sorta between a rock and a hard place on this: If you go to a casino and win, they want you to pay taxes. BUT if you lose, you can't claim a loss. You can only subtract losses from winnings. That simply doesn't jell with most folks here.

Personally I think the IRS should stay out of it as they do in other countries. They are having enough image problems as it is.

Edited by Ellis
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You can only deduct expenses if you declare your job is a professional gambler and then you have to use a Schedule C to declare winnings, losses and expenses. If you're a hobbiest then you can only declare losses up to the amount of your winnings (i.e. NO LOSSES) and then you better have some really serious documentation.

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