Gambling Records

Another thread here got me wondering about tracking ones play. What I usually do is something very simple - I record what I have in my pocket when I leave my room and then I record what I have in my pocket when I return. I'm either down or ahead and this includes any money spent on food, drinks, etc...

I don't really care about getting to a level of tracking every game - I just use this easy system to keep within my budget - after watching others years ago and seeing how they have no idea how much they are spending I figured rather not lose track. My brother-in-law cracks me up when at the end of a trip he'll declare that he brought x amount and now has x+$100 so it was an ok trip, of course not accounting for the half dozen drunken trips to the ATM!

Anyway let's say I hit a 5K slot jackpot - exactly what kind of loss records do you need to show to offset any or all of the win? Seems to me that I have seen more than a few folks hit a big win at a slot machine and I doubt that they are precise record keepers...

As a UK reader, I'm totally bemused by all this talk of federal and state taxes on US based gamblers.
Here in the UK, Her Majesty's Revenue and Customs : HMRC, the equivalent of your IRS, does not care to know about winnings or losses in casinos, be they live or on-line, table games or video games. The situation in most of Europe is the same. HMRC taxes the profits of the business establishments, but has no interest whatsoever in the successes or failures of we punters. Even profesional full time gamblers would not have to declare winnings, unless they were themselves running a gambling establishment by way of trade. Since, on average, the players lose and the casinos (or other players) win, if all of us had to declare our losses and profits, then in aggregate we players would be declaring losses and HMRC would owe us money.

I visualise rows of players sat in a Vegas casino at slots and tables, carefully pocketing receipts for each buy-in, for each coin or note deposited, and keeping printouts of every win. Then handing that bunch of papers to their accountant who licks his lips at the thought of his fee.

Surely it cannot be so! Where is the fun of going up to a blackjack table and handing over $xxx to buy chips, which get played for a few restful hours before being sold back at the cashier desk, give or take a few $$$. Please tell me that's not all accompanied by paperwork?

Out of curiosity, do all, most, or all employed, US citizens have to submit state or federal tax records each year? In the UK, generally only self employed people or those with complex tax affairs ever have to submit anything to HMRC. We call it self assessment and VERY few self assessments get challenged or audited.

As far as tracking for my own budget, I do the same, usually keeping accurate track of the bills in my pocket -- and any trips to the ATM, drunken or otherwise ;).

Quote: andyg99

Anyway let's say I hit a 5K slot jackpot - exactly what kind of loss records do you need to show to offset any or all of the win? Seems to me that I have seen more than a few folks hit a big win at a slot machine and I doubt that they are precise record keepers...

For accurate records for tax purposes, if you use a player's card at the tables or slots, the casino will track your wins & losses. You just ask them for the totals at the end of the year.

I set up my TotalRewards account online earlier this year. I was surprised to see that they have yearly Win/Loss statements going back 5 years. You just select the year and the statement pops up.

Quote: OnceDear

As a UK reader, I'm totally bemused by all this talk of federal and state taxes on US based gamblers.
Here in the UK, Her Majesty's Revenue and Customs : HMRC, the equivalent of your IRS, does not care to know about winnings or losses in casinos, be they live or on-line, table games or video games. The situation in most of Europe is the same. HMRC taxes the profits of the business establishments, but has no interest whatsoever in the successes or failures of we punters. Even profesional full time gamblers would not have to declare winnings, unless they were themselves running a gambling establishment by way of trade. Since, on average, the players lose and the casinos (or other players) win, if all of us had to declare our losses and profits, then in aggregate we players would be declaring losses and HMRC would owe us money.

I visualise rows of players sat in a Vegas casino at slots and tables, carefully pocketing receipts for each buy-in, for each coin or note deposited, and keeping printouts of every win. Then handing that bunch of papers to their accountant who licks his lips at the thought of his fee.

Surely it cannot be so! Where is the fun of going up to a blackjack table and handing over $xxx to buy chips, which get played for a few restful hours before being sold back at the cashier desk, give or take a few $$$. Please tell me that's not all accompanied by paperwork?

Out of curiosity, do all, most, or all employed, US citizens have to submit state or federal tax records each year? In the UK, generally only self employed people or those with complex tax affairs ever have to submit anything to HMRC. We call it self assessment and VERY few self assessments get challenged or audited.

Virtually everyone in the US, starting with their employment as teens or whenever, pays income taxes through involuntary payroll deduction as it is earned. All income, including illegal revenue from any source, has a tax on it. Every year, almost everyone who earned money is required to file a tax return, because their employer has filed a return that shows payroll going out and who it was paid to, and that money has to be accounted for by those who earned it. Many people do not earn enough, or have offsetting expenses (called deductions) enough, to receive all their income taxes back as a refund.

Many other people pay, on a sliding scale, some amount of taxes; the scale takes into account the deductions allowed; after that, their Adjusted Gross Income falls somewhere on a chart that tells their total indebtedness to the federal government. If you owe taxes, the floor of it is around 17% of what you earned, and the ceiling around 36%. (These numbers change from time to time.) You compare the chart to what you've already paid in for that year; if you've paid too much, you get a refund for the overage. If you've not paid enough, you have to send a check for the difference.

Most states have an income tax as well, at lower percentages, topping out around 9% of your income; about 1/2 dozen don't have any.

Money made by selling stocks favorably, selling real estate, doing well on other investments, is considered income in most cases. So are gambling winnings, rent collections, alimony, child support, pensions, disability awards, just about any revenue stream. So, in these situations, you usually have to keep track of your expenses or downturns, so you can offset the revenue with losses or allowed expenses, and the true gain from those sources can be evaluated and paid for.

This is a very simplistic explanation, and there are lots more parts to it, but hopefully you get the basic idea. The tax code, as it stands (and it changes every year), is a bewildering mess of thousands of pages of legislation; so much so there's an entire industry, tens of thousands of tax preparers who only work January to April, (the due date is April 15 for the previous calendar year) helping people fill out their taxes. And it's a federal offense not to file if you're required to, or to file a fraudulent return, and they do come and find you.

What happens in casinos is, if you win a large amount of money, the casino needs your ID and has you sign paperwork that includes your Social Security number (used by the IRS to track your earnings, and given by your employer to the IRS with your payroll information), before they will give you the money. You can have them deduct an estimated tax amount then, or take it all, but you'll have to pay taxes on it later. If you refuse to give ID and SSN when the casino pays you, or if you're not a US citizen, they take 30% immediately for the government. Non-US citizens can file to get the money back, as can those who refuse ID, but the 30% is usually a larger amount than most people will end up owing on it, citizen or not. For gambling, if you're not a professional, you can deduct your losses up to the amount of your winnings and owe nothing, but you'll have to file a return to get it back if you had them deduct it. For a professional, it's taxed at their income level rate, and I don't know much at all about how that works, except that they have to track their work expenses and losses as well.

As I said, this is a very simplistic and general explanation. Anybody else, feel free to elaborate or correct anything needed.

Quote: OnceDear

Surely it cannot be so! Where is the fun of going up to a blackjack table and handing over $xxx to buy chips, which get played for a few restful hours before being sold back at the cashier desk, give or take a few $$$. Please tell me that's not all accompanied by paperwork?

TV's Rumpole used to take any mail from Inland Revenue and immediately assign it to the circular file without being read; ever since watching that, I have wondered how much better the Brits have it. When it comes to gambling at least, I am jealous.

Regarding table games, there is no need for normally staked players to be concerned about taxes on winnings, except I'm not sure what happens with very large wins. Perhaps someone can say. Generally, as described above, no paperwork need be bothered with.

The US Federal Government seems to be intolerant of the idea that a bigtime winner at gambling *in a particular year* might come out ahead and they not get a piece of the action. That over several years that same person might be an overall loser is not a concern. If that logic makes any sense, then it makes sense that big wins get federal notice. Accepting the first, I can then accept the other. The problem is, the threshold is way, way too low.

Someone can establish themselves as a professional gambler with the Feds. Then everything changes.

Before getting angry with the Feds, though, a US gambler should consider how his state treats him, it could actually be much worse!

In my honest opinion....

If you're an AP, you need to keep track of EV, # of rounds played, unit, anything and everything in between (the $1 drink tip included). Not to mention, the obvious, win, loss, game, time played, casino name, EVERYTHING.


If you're just a gambler, you should be keeping track of win/loss (to report on your taxes). Even if you aren't going to report your wins/losses on your taxes (not everyone does....although everyone is supposed to), it'd be very good to know how much you typically win or lose.

Quote: beachbumbabs

Virtually everyone in the US, starting with their employment as teens or whenever, pays income taxes through involuntary payroll deduction as it is earned
...
So, in these situations, you usually have to keep track of your expenses or .downturns, so you can offset the revenue with losses or allowed expenses, and the true gain from those sources can be evaluated and paid for.

This is a very simplistic explanation, and there are lots more parts to it, but hopefully you get the basic idea. The tax code, as it stands (and it changes every year), is a bewildering mess of thousands of pages of legislation; so much so there's an entire industry, tens of thousands of tax preparers who only work January to April, (the due date is April 15 for the previous calendar year) helping people fill out their taxes. And it's a federal offense not to file if you're required to, or to file a fraudulent return, and they do come and find you.

It's interesting that all of this about income tax filing and a complicated tax system is true in Canada as well, EXCEPT that we do not pay taxes on gambling or lottery winnings.

I would like to hear from anyone whose tax return has been AUDITED by the IRS; what records of gambling wins and losses did they keep for tax purposes, what did the auditor / IRS tell them, and what was the result of the audit?

In other words, what passes muster In the Real World to pass an IRS audit of gambling wins and losses?

What level of proof is deemed "good enough?"

Quote: MrV

I would like to hear from anyone whose tax return has been AUDITED by the IRS; what records of gambling wins and losses did they keep for tax purposes, what did the auditor / IRS tell them, and what was the result of the audit?

In other words, what passes muster In the Real World to pass an IRS audit of gambling wins and losses?

What level of proof is deemed "good enough?"

I think that this really varies from case to case. Most of the time they will accept casino win/loss records, but not always.

IMO this makes sense. If you have some W2Gs, but your win/loss records from those same casinos show that you are down significantly, they know that you have a net loss. They records may not be accurate but they are not THAT inaccurate, and when it comes down to it, the IRS does not care if you are down $5k or $50k -- if you are down, you are down.

On the other hand, if it's borderline and non-obvious, they may ask for more detailed records.

Quote: odiousgambit

Regarding table games, there is no need for normally staked players to be concerned about taxes on winnings, except I'm not sure what happens with very large wins. Perhaps someone can say. Generally, as described above, no paperwork need be bothered with.

I agree. Though everyone is "supposed" to declare any gambling wins, even a paltry amount like $5, don't bother if you're a small or medium-sized gambler. I only started worrying about it when I started taking >$10K bankrolls to Vegas. At that point I knew I was triggering CTRs. Whether or not I should be worried or not, I wanted to be on the up and up.

Quote: Joeman

For accurate records for tax purposes, if you use a player's card at the tables or slots, the casino will track your wins & losses. You just ask them for the totals at the end of the year.

This is terrible advice. Casino win/loss statements for table games are horrendously inaccurate. According to their W/L statement, CET thinks I won money at Harrah's New Orleans last year. I haven't been there since 2011!

For machine games, I would imagine the casino's statement is pretty accurate due to the nature of machines. But I don't have any first hand experience.

The bottom line is that the IRS wants a daily gambling journal from you, personally. Games played, amounts won/lost, casinos visited, etc.

Quote: AxiomOfChoice

I think that this really varies from case to case. Most of the time they will accept casino win/loss records, but not always.

Do you know this? Have you or do you know someone who has been audited? If I were an auditor I would reject out-of-hand any casino win/loss statements for table game play. But I guess if the auditor isn't a gambler, they might not know how bad it its...

Quote: AcesAndEights

Do you know this? Have you or do you know someone who has been audited? If I were an auditor I would reject out-of-hand any casino win/loss statements for table game play. But I guess if the auditor isn't a gambler, they might not know how bad it its...

I've done some research on this. I don't remember the exact sources. If it is clear that you are a losing player then I think you will be fine.

Didn't the Wizard host a show with a gaming lawyer? I'm quite sure he did. Was this covered then?

Thanks BBB That's very enlightening and interesting. I looked on Wikipedia and your tax system takes up far more pages of explanation.

Quote: beachbumbabs

Virtually everyone... pays income taxes through involuntary payroll deduction as it is earned.

Same here. Employers do submissions monthly. That's pretty much all of it for most regular employees who need submit nothing ever.

Quote:

Every year, almost everyone who earned money is required to file a tax return

Unless one has other income, maybe from renting out property or a 'hobby job' such as ebay selling, annual submission is waived completely. Gambling winnings are totally exempt. There's no real culture of fear and HMRC doesn't waste resources chasing every odd penny. There is a significant amount of illegal 'cash in hand' trading and I believe that's even more true in continental Europe.

Quote:

..You compare the chart to what you've already paid in . . .

Sounds a bit complex. Those of us who do submit returns tap different types of income and outgoings into an HMRC web portal and we are told what to pay. Paper returns are permitted but have to be submitted many months sooner. It's not generally complex.

Quote:

Most states have an income tax as well

That sounds a major complication. We don't have that. We have local council taxes, based loosely on the price band of our homes. No calculations to submit, we just tell them when houses are unoccupied or have a sole occupant.

Quote:

Money made by selling stocks favorably, selling real estate, doing well on other investments, is considered income

Here we have Capital Gains tax which is separate from income with separate allowances.

Quote:

... there's an entire industry, tens of thousands of tax preparers...

What a dreadful waste of human resources :) You have more lawyers too, I believe.

Of course we have corporation taxes, Petrol taxes, National Insurance, inheritance taxes and the dreaded VAT, but all at nationally set levels. Not a paperwork problem to citizens, though VAT paperwork is a burden on traders.

Thanks again for the insight.

Quote: AcesAndEights

This is terrible advice. Casino win/loss statements for table games are horrendously inaccurate. According to their W/L statement, CET thinks I won money at Harrah's New Orleans last year. I haven't been there since 2011!

For machine games, I would imagine the casino's statement is pretty accurate due to the nature of machines. But I don't have any first hand experience.

The bottom line is that the IRS wants a daily gambling journal from you, personally. Games played, amounts won/lost, casinos visited, etc.

(Quote: AxiomOfChoice)
"I think that this really varies from case to case. Most of the time they will accept casino win/loss records, but not always."

Do you know this? Have you or do you know someone who has been audited? If I were an auditor I would reject out-of-hand any casino win/loss statements for table game play. But I guess if the auditor isn't a gambler, they might not know how bad it its...

I’ve had some experiences with tax issues / IRS / gambling records.

When I was a very active gambler I was always aware of the 10k cash transaction that might shoot up the red flags and require additional signed paper work. Not sure if anything would have happened at a casino, but regardless of the circumstances I made sure I never made that 10k cash transaction that would or could be recorded.

If I had over 10k in chips to cash out, I would do like 7k at a time, have my wife or friends do some, or space the cash outs and go to different windows.

If I took markers I would take like 6k and if I needed more would take the remaining 4k. If I won the money back I would pay the markers 6 and 4 back at different times. Not sure if that was necessary and not sure if paying markers off with chips is the same as cash, but made sure I never would find out one way or the other.

I was audited by the IRS for a five year consecutive period which involved stock trades I made during that specific time initiated by an SEC investigation I innocently was involved in. During that five year period one year I had a 20k video poker win at one casino, and another year I had two 20k video poker wins from a different casino. For both those years I used the different casinos win/lose statements which both not only made me sick to my stomach reading them, but had more then enough losses to cover the wins I signed for. I didn’t pay any taxes at all on those wins. I also would like to add that 95% of all the losses recorded on the casinos W/L statements derived from table games. Also, casino W/L statements per year can only be used for the same year of the recorded wins.

I had to hire tax lawyers on top of the lawyers I already had for the SEC criminal investigation. My tax returns are usually very thick with paper work and during review with these tax lawyers I mentioned the wins and how my accountants filed against them. They said it was nothing to worry about, and during the entire audit never once were the casino wins even brought up. This audit from the IRS I recall taking months to complete. I'm sure the IRS went further then the five years being investigated by the SEC and only got tagged for what could be considered petty nonsense. So I think it’s safe to say that the casinos W/L statements qualify for losses against wins.

As far as personal records go with gambling I think it’s a great idea and should be mandatory for any gambler. Not for any reason other then to always know where you stand. Of course all you professional AP’ers already know and do it obviously. But for any person that gambles a reasonable amount should always keep records.

One year I decided for the first time to keep an actual black calendar book for an entire year. I wrote every single bet down I made that year. Casinos, lottery, horses, numbers, personal bets, any bet what so ever. I actually became obsessed with doing this that year and couldn’t have missed much if anything at all. Casino action was not per game or table, just total in and total out records.

At the end of the year I totaled the entire amount, and suddenly woke up and realized that just maybe the blood wasn’t flowing properly through my brain. The following year I didn’t make a single bet for at least the first six months getting over the sticker shock and knowing I was gambling like that for years. I’ve since kept flawless records and never lost more then 50% of that total in one year.

Of course I had a few winning years but overall I’m a big time loser when it comes to gambling.

The government knows if people pay taxes they shouldn't and change it, others whom donate to the politicians will have to pick up the slack. I was talking to an old lady, rich as could be, the other day who complained she had to pay taxes on hand pays. She admitted she spent $1000 every time she played the slot. Maybe she is so wealthy, she pays voluntary minimum, but I can't say for sure. Either way, someone else would have to pay for the money she voluntarily paid on slots also voluntarily and that means tax increases. Grover would eat their children and their children's children if they did.

Quote: 4ofaKind

Quote: AcesAndEights

This is terrible advice. Casino win/loss statements for table games are horrendously inaccurate. According to their W/L statement, CET thinks I won money at Harrah's New Orleans last year. I haven't been there since 2011!

For machine games, I would imagine the casino's statement is pretty accurate due to the nature of machines. But I don't have any first hand experience.

The bottom line is that the IRS wants a daily gambling journal from you, personally. Games played, amounts won/lost, casinos visited, etc.

Do you know this? Have you or do you know someone who has been audited? If I were an auditor I would reject out-of-hand any casino win/loss statements for table game play. But I guess if the auditor isn't a gambler, they might not know how bad it its...

I’ve had some experiences with tax issues / IRS / gambling records.

When I was a very active gambler I was always aware of the 10k cash transaction that might shoot up the red flags and require additional signed paper work. Not sure if anything would have happened at a casino, but regardless of the circumstances I made sure I never made that 10k cash transaction that would or could be recorded.

If I had over 10k in chips to cash out, I would do like 7k at a time, have my wife or friends do some, or space the cash outs and go to different windows.

If I took markers I would take like 6k and if I needed more would take the remaining 4k. If I won the money back I would pay the markers 6 and 4 back at different times. Not sure if that was necessary and not sure if paying markers off with chips is the same as cash, but made sure I never would find out one way or the other.

I'm not judging or preaching it's your business. However, this is very illegal. They just went after some sport bettors over this type of thing. I would not be admitting this publicly if I were you.

Quote: AxelWolf

this is very illegal. They just went after some sport bettors over this type of thing. I would not be admitting this publicly if I were you.

you also mix the 10k reporting issue with tax issues; they are not the same thing [you probably know this]. If someone buys chips with $10k, the paperwork generated is sent to the Feds, but not directly to the IRS. Someone might fear that the IRS would eventually get wind of it and be some sort of flag, and perhaps that fear is not unfounded, but just for the record, the direct concern of the IRS is large wins, which generate W-2s.

Quote: odiousgambit

you also mix the 10k reporting issue with tax issues; they are not the same thing [you probably know this]. If someone buys chips with $10k, the paperwork generated is sent to the Feds, but not directly to the IRS. Someone might fear that the IRS would eventually get wind of it and be some sort of flag, and perhaps that fear is not unfounded, but just for the record, the direct concern of the IRS is large wins, which generate W-2s.

Don't quote me, but I believe.......


W2G's ($1200+ slot wins) are sent to the IRS (for taxes). CTRs ($10K+ cash in // cash out) are sent to the US Treasury (so they know where/when large quantities of money are being transferred, prevent money laundering). Of course, if you hit a $10K+ jackpot on a machine, you'd have to file both a W2G and a CTR.

Generating a CTR should be of no concern to a non-AP. APs don't want to file CTRs because they don't want to give up their identity (ID, Social) to the casino. I'm fairly sure CTRs are not used for tax purposes, although, I would have to think that filing multiple CTRs (at casinos) would alert the IRS of your gambling habits, and thus would like a win/loss statement of your gambling sessions.

If you're not an AP, and don't mind giving up your identity to the casino, I don't see any reason why you would want to structure. Structuring is the act of cashing out in a way to try to avoid a CTR.

If you don't want to give up your identity to the casino (either you're an AP...or simply don't want to give up your identity), IMO, you should stop playing once you're slightly below the $10K threshold. If you're above the $10K threshold, don't cash out any chips....just bring them home and bring them back to the casino next time you gamble (easier if the casino is local to you).

If you cash out a large sum (less than $10K, but more than $3K), the casino may file a SAR -- Suspicious Activity Report. A SAR does not necessarily mean that they think you're up to something, it's just something that is to be filed when someone cashes out a large sum that doesn't meet the CTR ($10K+) threshold. The SAR, as far as I know, will be filed without your knowledge (you don't have to sign it), they don't need your SSN, but I do believe they'll ask for your ID.

CTR = Currency Transaction Report

SAR = Suspicious Activity Report

RS's comments above are pretty accurate. I'm certain SAR's wouldn't be something to worry about when concerning casinos, unless of course your behavior and transactions are completely out of line. They pretty much are more concerned about the money you do have becoming their money.

From Wikipedia:

When a transaction involving more than $10,000 in cash is processed, most banks have a system that automatically creates a CTR electronically. Tax and other information about the customer is usually pre-filled by the bank software. CTRs since 1996 include an optional checkbox at the top if the bank employee believes the transaction to be suspicious or fraudulent, commonly called a SAR, or Suspicious Activity Report. A customer is not directly told about the $10,000 threshold unless they initiate the inquiry. A customer may decline to continue the transaction upon being informed about the CTR, but this would require the bank employee to file a SAR. Once a customer presents or asks to withdraw more than $10,000 in currency, the decision to continue the transaction must continue as originally requested and may not be reduced to avoid the filing of a CTR. For instance, if a customer reneges on their initial request to deposit or withdraw more than $10,000 in cash, and instead requests the same transaction for $9,999, the bank employee should deny such a request and continue the transaction as originally requested by filing a CTR. This sort of attempt is known as structuring, and is punishable by federal law against both the customer and the bank employee. Informed individuals who structure their transactions at an amount near, but not over $10,000 could have their accounts closely monitored by tellers and bank staff to see if a pattern emerges that could warrant the filing of a SAR.