Note that you can document winnings and losses from table games at casinos by recording the number of the table and keeping statements showing casino credits. Theoretically, you’re supposed to record each gambling win or loss for each blackjack hand, spin at the roulette table and throw of the dice, as well every horse or dog race. Trump Hotels & Casino Resorts, a holding company for Trump's three casinos, entered Chapter 11 in November 2004 as part of a deal with bondholders to restructure $1.8 billion of debt. Earlier that year, the holding company posted a first-quarter loss of $48 million, double its losses for the same quarter the previous year. You can absolutely deduct those gambling losses. However, you can only do so based off of how much you’ve won in cold, hard gambling cash. This means in order to write off your losses, you will have to accurately report the amount of money you made from gambling in a given year. This can make some people wary. The Rules for Offsetting Casino Winnings for Tax Purposes. You can deduct Gambling Losses up to the extent of Gambling Wins, so they can be offset, but if you lose more than you win you cannot claim the loss any further than your winnings. Gambling Losses unlike other forms of Losses cannot carry over from year to year.
Every now and then we pop down to Atlantic City for a weekend away, as we get access to a great range of comped rooms, dining and entertainment. This trip we were lucky enough to be staying in the Borgata’s Opus Suite, which at 1000 sqft is bigger than my Apartment in Brooklyn, and has a ton more marble in it than we have! We spent quite a low key weekend, enjoying the restaurants and the suite without too much gallivanting around the town. I did take a little time out to play some slots during the trip and hit a Jackpot for $5,600. Which was very exciting, but at the same time a little annoying since your cash comes with a W2-G slip from the Casino.
The IRS Form W2-G is required whenever one of the following occurs:
- The winnings (not reduced by the wager) are $1,200 or more from a bingo game or slot machine,
- The winnings (reduced by the wager) are $1,500 or more from a keno game,
- The winnings (reduced by the wager or buy-in) are more than $5,000 from a poker tournament,
- The winnings (except winnings from bingo, slot machines, keno, and poker tournaments) reduced, at the option of the
- payer, by the wager are:
- $600 or more, and
- At least 300 times the amount of the wager, or
- The winnings are subject to federal income tax withholding (either regular gambling withholding or backup withholding).
Once you receive a W2-G Slip you are stuck with the knowledge that the Casino will be reporting the amount of your Win to the IRS, and as such if you fail to report your winnings too then there could be trouble come Audit time.
Casino winnings reported on the W2-G will add onto your regular income for the year, and you will therefore be taxed at whatever your current rate is. Luckily you can reduce the impact of the winnings by deducting your losses.
If you use your Casino Players card in slot machines or on tables (an absolute must in order to receive comps) the casino will be able to track your wins and losses and produce an annual Casino Win/Loss Report. This is useful to show you where you stand, but unfortunately are notoriously unreliable when it comes to accuracy. Don’t rely on this.
The Rules for Offsetting Casino Winnings for Tax Purposes
- You can deduct Gambling Losses up to the extent of Gambling Wins, so they can be offset, but if you lose more than you win you cannot claim the loss any further than your winnings.
- Gambling Losses unlike other forms of Losses cannot carry over from year to year. Therefore if you lost 10K in 2012 and won 10K in 2013 whilst you now may seem to have broken even, you will be subject to tax on the ‘win’.
- If you are planning to deduct losses it can only occur if you file your taxes in an Itemized manner.
- The IRS Requires you to keep accurate records of your Wins and Losses in the form of a detailed Gambling Diary, with any supporting documents that you might be able to muster. It is best to keep a current diary and complete it during every day of your trip, as your daily win/loss will be most accurate. You should keep copies of the W2-G forms (I scan mine and save them to a Dropbox folder for that years Tax Reports, where I also keep the Win/Loss Diary).
- For the diary, I keep whatever receipts I can, often including the Win/Loss Report if it is fairly accurate, along with ATM Receipts – though in fairness there aren’t many receipts available, and most of the inconsistencies come from Table Play as they are not able to track the players as accurately.
- Casual Gamblers are not able to reduce basis by claiming costs of business as a deduction, however Professional Gamblers are able to claim costs, such transport to the location, hotel etc. If you aren’t listing your profession as a Pro Gambler don’t try to claim any of these as costs!
Writing Off Gambling Losses On Tax Return
So, good times were had at The Borgata, and we did quite well overall, sadly with Uncle Sam needing his share the win comes with a little more paperwork come tax time, but I think its a small price to pay. Check out some of our other Gambling experiences here – http://saverocity.com/travel/casino-gambling-playing-the-comp-game/ whilst on many levels Casino Gambling and ‘smart financial decisions’ is an Oxymoron, there are a lot of benefits to doing it right, as our $13,000 of free travel for 2012 is testament to.
By John Grochowski
What would make you write off a casino? How bad would the experience have to be for you to vow never to set foot in the door again?
My casino choices revolve around gaming options. Give me a decent set of blackjack rules and some video poker pay tables that allow me to make a fair run for the money, and I’m happy. I can putup with mediocre restaurants and indifferent service as long as I feel I have a shot to win.
Some of my friends have far different priorities, and I expect many of you do, too. On a night of television and conversation recently, the talk turned to casinos, and several of us had storiesabout problems that had us headed to the door, never to return:
Tom: “I’m a smoker myself, and I’m not all that pleased with the new Illinois law that prohibits smoking in casinos. But I can’t stand other smokers who won’t at least use an ash tray,
“This was just a couple of years after the riverboats first opened. I was playing dollar video poker, and had a pretty good run. I think it was Bonus Poker --- it’s so long ago now I’m notexactly sure. I think I drew four Aces, which is 400 credits on Bonus Poker.
“Anyway, I had several hundred dollars on the machine, and I hit the button to cash out. Those tokens came pouring into the tray --- this was before ticket printers --- and I reached in tostart putting the tokens in a bucket. Along with the tokens, I was getting ashes and cigarette butts. It was awful. My hands were filthy. I had to wash before I went to the bathroom.
“I complained to a change girl and she said, ‘Isn’t it awful? People are such pigs.’ But I didn’t see her or anyone else cleaning out the trays. That was it. I never went back.”
Alan: “I guess I threaten never to go back every time I lose. I probably even really mean it at the time. If the craps table is cold, and my wife tells me the slots are paying nothing, we starttalking about whether they’ve changed the games so you can’t win.
“But give us a month, and we’re back. We know we’ll win sometimes, and losing is part of the game.”
George: “My wife and I do the same stuff every time the slots are cold. We say we’re never going to go back and then we do.
“The only time a casino ever made us mad enough to REALLY stay away was a customer service thing. It wasn’t just one thing, either.
“I was playing blackjack, and ordered a drink. It was 45 minutes before the cocktail waitress got back. I’m ashamed to tell you, I lost $50 more than I’d set as a limit because I was waitingfor my stupid free beer.
“We went to the coffee shop for breakfast at 6:30 a.m. There was no one in front of us in line, but we stood for 20 minutes because there wasn’t enough staff. They told us one station wasn’topen because there was no waitress, and they couldn’t seat us in the open part because there was no one to clean a table. No apology, just, ‘We’ll get to it.’
“My wife hit a pretty decent slot jackpot, and they gave her those plastic racks to rack up dollar coins. She had about eight of them --- $800 worth. You know how those things are. Heavy asheck. She asked a change girl if she could redeem them, and she was told to go to the cage. So she asked if she could put them on the cart and wheel them to the cage. She planned to tip, butshe was told, ‘I have work to do.’ A supervisor finally stopped and helped.
“That was 10 years ago, and we haven’t been back since.”
I understood where George was coming from. Even though I’ll overlook sloppy service for a good game, there’s one Las Vegas joint my wife has refused to enter for 20 years. She and I hadcomplimentary show tickets, and wanted a room service meal while cleaning up.
Problem: No menu in the room. We called the front desk, and they promised to send one up. Fifteen minutes later, we called again. After another 15 minutes, we phoned housekeeping, and someoneelse promised to bring one right over. Yet another 15 minutes later, we made one last try.
We wound up having to choose between going to the show or eating. We ate in a different casino’s restaurant and did the rest of our gambling elsewhere. The casino has changed owners twice sincethen, the bad memories linger.
George sympathized. “I’d never go back,” he said.
My wife agrees. You win some, you lose some, but if the service is poor, there’s always somewhere else to spend your money.
What would make you write off a casino? How bad would the experience have to be for you to vow never to set foot in the door again?
My casino choices revolve around gaming options. Give me a decent set of blackjack rules and some video poker pay tables that allow me to make a fair run for the money, and I’m happy. I can putup with mediocre restaurants and indifferent service as long as I feel I have a shot to win.
Some of my friends have far different priorities, and I expect many of you do, too. On a night of television and conversation recently, the talk turned to casinos, and several of us had storiesabout problems that had us headed to the door, never to return:
Tom: “I’m a smoker myself, and I’m not all that pleased with the new Illinois law that prohibits smoking in casinos. But I can’t stand other smokers who won’t at least use an ash tray,
“This was just a couple of years after the riverboats first opened. I was playing dollar video poker, and had a pretty good run. I think it was Bonus Poker --- it’s so long ago now I’m notexactly sure. I think I drew four Aces, which is 400 credits on Bonus Poker.
“Anyway, I had several hundred dollars on the machine, and I hit the button to cash out. Those tokens came pouring into the tray --- this was before ticket printers --- and I reached in tostart putting the tokens in a bucket. Along with the tokens, I was getting ashes and cigarette butts. It was awful. My hands were filthy. I had to wash before I went to the bathroom.
“I complained to a change girl and she said, ‘Isn’t it awful? People are such pigs.’ But I didn’t see her or anyone else cleaning out the trays. That was it. I never went back.”
Alan: “I guess I threaten never to go back every time I lose. I probably even really mean it at the time. If the craps table is cold, and my wife tells me the slots are paying nothing, we starttalking about whether they’ve changed the games so you can’t win.
“But give us a month, and we’re back. We know we’ll win sometimes, and losing is part of the game.”
George: “My wife and I do the same stuff every time the slots are cold. We say we’re never going to go back and then we do.
“The only time a casino ever made us mad enough to REALLY stay away was a customer service thing. It wasn’t just one thing, either.
“I was playing blackjack, and ordered a drink. It was 45 minutes before the cocktail waitress got back. I’m ashamed to tell you, I lost $50 more than I’d set as a limit because I was waitingfor my stupid free beer.
“We went to the coffee shop for breakfast at 6:30 a.m. There was no one in front of us in line, but we stood for 20 minutes because there wasn’t enough staff. They told us one station wasn’topen because there was no waitress, and they couldn’t seat us in the open part because there was no one to clean a table. No apology, just, ‘We’ll get to it.’
“My wife hit a pretty decent slot jackpot, and they gave her those plastic racks to rack up dollar coins. She had about eight of them --- $800 worth. You know how those things are. Heavy asheck. She asked a change girl if she could redeem them, and she was told to go to the cage. So she asked if she could put them on the cart and wheel them to the cage. She planned to tip, butshe was told, ‘I have work to do.’ A supervisor finally stopped and helped.
“That was 10 years ago, and we haven’t been back since.”
I understood where George was coming from. Even though I’ll overlook sloppy service for a good game, there’s one Las Vegas joint my wife has refused to enter for 20 years. She and I hadcomplimentary show tickets, and wanted a room service meal while cleaning up.
Problem: No menu in the room. We called the front desk, and they promised to send one up. Fifteen minutes later, we called again. After another 15 minutes, we phoned housekeeping, and someoneelse promised to bring one right over. Yet another 15 minutes later, we made one last try.
We wound up having to choose between going to the show or eating. We ate in a different casino’s restaurant and did the rest of our gambling elsewhere. The casino has changed owners twice sincethen, the bad memories linger.
George sympathized. “I’d never go back,” he said.
My wife agrees. You win some, you lose some, but if the service is poor, there’s always somewhere else to spend your money.
Writing Off Gambling Losses
John Grochowski writes a weekly syndicated newspaper column on gambling,
and is author of the 'Casino Answer Book' series from Bonus Books.
and is author of the 'Casino Answer Book' series from Bonus Books.