The Easy Vegas thread

NY commercial and VLT revenue reports (weekly and monthly) These are not owned by the state, but the system they run on is operated by the New York Lottery.

RW NYC is a VLT parlor in NY. Yearly coin in is around $8 billion. They do $170MM in play per week. Real casinos in NYC will make an absolute killing. If you have a spare several billion dollars, buy that NYC license.

Quote: Dieter

On a technicality, VLT's cannot be Class II.]VLT's are operated by the state, not by a tribe. All Class II gaming is tribal, under IGRA 1988. Tribes may operate Class II TLS games, which are very similar.
link to original post

Class II is bingo and bingo-like or bingo-adjacent games. The feds wanted to give native american tribes the ability to have bingo without any approval from the state outside of bingo being generally legal in that state. The tribes took advantage of this and started making crazy bingo games. The first ones were live caller with a blower, but linked between halls for huge jackpots. Then they made electronic bingo games that did the same thing, but were still clearly bingo. Class II "slots" came from those electronic bingo matches. To make them more appealing, they use slot reels and bonus features to display wins.

VLTs are some form of lottery. Washington has a lottery system for tribes that uses virtual scratch tickets that are randomly placed into deals and then sold in order until expended.

Quote: itsmejeff

NY commercial and VLT revenue reports (weekly and monthly) These are not owned by the state, but the system they run on is operated by the New York Lottery.

RW NYC is a VLT parlor in NY. Yearly coin in is around $8 billion. They do $170MM in play per week. Real casinos in NYC will make an absolute killing. If you have a spare several billion dollars, buy that NYC license.

Quote: Dieter

On a technicality, VLT's cannot be Class II.]VLT's are operated by the state, not by a tribe. All Class II gaming is tribal, under IGRA 1988. Tribes may operate Class II TLS games, which are very similar.
link to original post

Class II is bingo and bingo-like or bingo-adjacent games. The feds wanted to give native american tribes the ability to have bingo without any approval from the state outside of bingo being generally legal in that state. The tribes took advantage of this and started making crazy bingo games. The first ones were live caller with a blower, but linked between halls for huge jackpots. Then they made electronic bingo games that did the same thing, but were still clearly bingo. Class II "slots" came from those electronic bingo matches. To make them more appealing, they use slot reels and bonus features to display wins.

VLTs are some form of lottery. Washington has a lottery system for tribes that uses virtual scratch tickets that are randomly placed into deals and then sold in order until expended.
link to original post

Mostly sounds good. I was under the impression that TLS (tribal lottery system - pull tab or similar based games) fell under the Class II umbrella. Is that not your understanding?

The crux of my disagreement is that a VLT parlor cannot be Class II, because the operator is not a tribe. The games on offer may be practically identical.

Quote: Dieter

Mostly sounds good. I was under the impression that TLS (tribal lottery system - pull tab or similar based games) fell under the Class II umbrella. Is that not your understanding?

The crux of my disagreement is that a VLT parlor cannot be Class II, because the operator is not a tribe. The games on offer may be practically identical.
link to original post

Tribes do not need special permission from the states to conduct Class II gaming. They need a compact with the states to conduct class III gaming. The TLS (Tribal Lottery System) is part of the compacts and is generally considered Class III.

Not that it makes much sense to me, but I think the problem is that Class III is not very well defined outside of Vegas.

https://easy.vegas/games/crash

A "crash course" is one in which the reader learns about a particular subject in a short period of time. Consider deleting most of the options in the drop-down menus for the average loss calculator. There are far too many options. Anyone who can make use of the ability of the calculator to provide such granular information has long past graduated from a crash course in calculating EV for various casino games.

Call the first column "bets per hour", because that applies to all the games. "Rounds" and "rolls" are game-specific. For each game, reduce the number of options to three. For slot machines and video poker, the average is approximately 600, so make the other two options 300 and 1200 (slow and fast, respectively). For table games, label the slow and fast options "online". In the real world, a newbie is not going to play at a slow or fast table game for 10 hours that runs significantly different from the average.

Change "bet per round" to "bet amount".

For house edge, reduce the number of options greatly. If this is to be a crash course, it has to be something that can be digested by a reader whose knowledge of casino games is limited to the fact that slot machines and table games are different. Don't drown them in options.

Slot machines should have options of 5%, 8%, 10% and 12%. No one plays the 22% Megabucks without the intention of hoping to win the jackpot. No one can tell what the payback % is of anything, only a range based on location and denom.

Roulette only needs three options: single zero, double zero and triple zero.

Not only are the video poker options too numerous, some of them are wrong. 8/5 Bonus Poker is a 99.17% payback, not 97.40%. Reduce the options to 1%, 2%, 4% and 6%. The column is labeled house edge, not payback percentage. There is no need for exact percentages for video poker because the real-world wins are two to four percentage points less than optimal because of suboptimal play. Newbies are unlikely to memorize perfect VP strategy before going to Las Vegas for the first time.

Baccarat should have 1.24% player and 1.06% banker with commission, 1.46% no-commission, and 14.36% tie.

For craps, the options should be pass, don't pass, field, any craps and any seven. Adding place and buy bets (between pass line and field, percentagewise), adds more options, and if the list gets too long, newbies will not understand. It's a complicated game for newbies anyway unless they only do the pass line with odds, in which case they don't need calculations for all those other options.

And then there's blackjack. This game can have the widest range of house edge of any casino game, ranging from negative (counting cards) to insanely high (awful play plus side bets). Make the options 0.6% (good rules with optimal play), 1.5% (bad rules with optimal play/good rules with imperfect play), 5% (terrible play or side bets) and 10% (really terrible play and side bets). The granularity of whether or not you can surrender or six decks vs eight is unnecessary.

You should add live keno. Yes, the house edge is very high, but it only runs at 10 games per hour. Some casinos run a separate RNG in the keno lounge at 20 games per hour. If one bets a small amount (as little as $1/game), live keno is pretty cheap on a $/hr basis.

Finally, you should consider deleting the phrase above the calculator "One of my goals for this site is to get players off of slots and onto games that don't suck your money away hand over fist". Be objective about the difference between slots and other games. That statement reads like it came from a slot hater.

The reason why people can lose lots of money playing slots is because they get sucked into betting a large amount per spin. The latest development in that arena is the ridiculous (in my opinion) buying a bonus for hundreds of dollars. Yeah, I know, betting 25 cents per spin gets boring. Players can lose lots of money on table games too. All they have to do is play badly or chase their losses. All these games are different, and none of them are intrinsically worse than all the others.

Quote: Mukke

Quote: Dieter

Mostly sounds good. I was under the impression that TLS (tribal lottery system - pull tab or similar based games) fell under the Class II umbrella. Is that not your understanding?

The crux of my disagreement is that a VLT parlor cannot be Class II, because the operator is not a tribe. The games on offer may be practically identical.
link to original post

Tribes do not need special permission from the states to conduct Class II gaming. They need a compact with the states to conduct class III gaming. The TLS (Tribal Lottery System) is part of the compacts and is generally considered Class III.

Not that it makes much sense to me, but I think the problem is that Class III is not very well defined outside of Vegas.
link to original post

That is news to me. I honestly thought TLS didn't require a compact.

Class III is easy - (almost) everything in tribal gaming that isn't Class II, including banked card games and Nevada style slots.
(Class I doesn't apply to anything casino related.)

Quote: Dieter

(Class I doesn't apply to anything casino related.)

I always just assumed Class One was just traditional bingo.

I'm not doing much with the site these days, but I did just rewrite an article that I first wrote about 20 years ago, arguing why criticism of lotto players for playing a high house-edge game is misguided. Expected Value is Useless When Applied to the Lottery

I just bought a lottery ticket this morning so the story can be "we rented an RV, and I bought the winning ticket at the convenience store next to the beachside RV/trailer park." I bought a Calif. lottery ticket because the odds are "better."

Quote: MichaelBluejay

I'm not doing much with the site these days, but I did just rewrite an article that I first wrote about 20 years ago, arguing why criticism of lotto players for playing a high house-edge game is misguided. Expected Value is Useless When Applied to the Lottery
link to original post

Fun read!

I'd like to note that South Point Casino offers the same cost for bowling as when I was in high school—$1!:
Early Bird Special
Monday - Friday • 7:00am - 9:00am • Excluding holidays

Sometimes when an article gets too long I split it off into a new article. When that happens I generally also rewrite it and expand it. I'm submitting it here for peer review.

The Short-Term vs. the Long Run in Gambling

Incidentally, I'm generally very confident about my articles' understandability, the points being clear, and the concepts being well-organized, but initially I wasn't so confident about this one, so I asked ChatGPT for a review. She pointed out what could be clearer so I rewrote one whole section. All the words are still 100% mine (I'm a writer and I'm loath to let anyone else come up with the words), but she helped identify what was nagging me but I couldn't put my finger on.

You might need to reconcile a couple of things in your article:

Quote: easy.vegas

More bets = greater chance of losing

Quote: easy.vegas

With some betting systems, you’re likely to win your session.

That can be taken as paradoxical. So I can flip a fair coin and have a 50% chance of winning, but I can also play a Martingale game with coin flips and have a greater than 50% chance of winning. So there's a way that doing more than one flip can have a lower chance of losing than just doing one flip.

You do elaborate by saying that this will be offset by larger losses, but that's not exactly the same as there being a greater chance of losing, which is a binary thing and not quantitative. Maybe there's a better way of saying "the more you bet, the more you lose" that's true in all cases, rather than "the more bets you make the more / more often you lose" which is not always true.

That you, AutomaticMonkey. You've identified an issue which is common across many disciplines: it's impossible to make a concise definition of something that covers all cases. Something has to give, either the definition is easy to understand but not 100% accurate, or the definition is accurate but verbose and hard to parse.

I can take your example a step further: Say you've already made one bet and lost. At that point it's impossible for an additional bet to *increase* your chance of losing, since you've already lost. More play ≠ higher chance of losing in that case.

But does it benefit the reader to account for your example, or mine? I'm not so sure. I'm really trying to drive home the point that in general, longer play leads to losses. If I start listing esoteric exceptions then that might just muddy the waters rather than clarifying them.

Quote: MichaelBluejay

That you, AutomaticMonkey. You've identified an issue which is common across many disciplines: it's impossible to make a concise definition of something that covers all cases. Something has to give, either the definition is easy to understand but not 100% accurate, or the definition is accurate but verbose and hard to parse.

I can take your example a step further: Say you've already made one bet and lost. At that point it's impossible for an additional bet to *increase* your chance of losing, since you've already lost. More play ≠ higher chance of losing in that case.

But does it benefit the reader to account for your example, or mine? I'm not so sure. I'm really trying to drive home the point that in general, longer play leads to losses. If I start listing esoteric exceptions then that might just muddy the waters rather than clarifying them.
link to original post

I admit to being verbose and hard to parse, in the interest of accuracy!

But I think you might want to consider why people play progressions. I consider them the cigarettes of gambling. You might enjoy every one of them for 50 years, until you get the bad news from the doctor. But you still got 50 years of enjoyment. Was it worth it? A progression player has probably figured out he will usually walk out of the casino a winner, until he doesn't. So it's really not that esoteric, lots of people play that way. They're willing to disregard the risk of ruin for that fun feeling of walking out of the casino 1 bet up 100 times in a row and treating it like a part time job with free drinks.

On the other hand, stating it like I just did could sound like I'm selling progressions, couldn't it? And you probably don't want to do that. Maybe the way you did it is the better way with the goal of educating a typical player.

I start with $10, increase my bet by $5 on the 2rd win (so 3rd bet) and keep increasing by $5 till i lose.
Then back to $5.
11 yo's in a row was my record..um.. er.. 11 wins :)

Here's an example of how it's hard to come up with a succinct explanation. For the question, "What makes the price of a stock or crypto go up?", the common explanation is:

❌ "There are more buyers than sellers."

Wrong, for various reasons. For starters, the number of buyers and sellers is irrelevant. And it's also not true that the number of buyers has to match the number of sellers: A single seller could sell 1000 shares, and 500 buyers could buy 2 shares each.

Explanations for the above question that are both succinct and accurate are hard to come by. I couldn't come up with one myself, I find myself explaining an order book, with a whole paragraph. But AI came up with something pretty good, and I edited to make it both shorter and clearer:

✅ "The price goes up when market buyers consume the standing SELL orders."

Or to be a little more accurate (since the next unconsumed order could still be at the last sales price):

✅ "The price goes up when market buyers consume the standing SELL orders at the current price."

Still, that's not as terse as "There are more buyers than sellers", even though it's more accurate, and it's certainly harder to understand than "more buyers than sellers", even though "more buyers than sellers" is wrong.

Quote: MichaelBluejay

Here's an example of how it's hard to come up with a succinct explanation. For the question, "What makes the price of a stock or crypto go up?", the common explanation is:

❌ "There are more buyers than sellers."

Wrong, for various reasons. For starters, the number of buyers and sellers is irrelevant. And it's also not true that the number of buyers has to match the number of sellers: A single seller could sell 1000 shares, and 500 buyers could buy 2 shares each...

I think in that case I would go with good old "There is more demand than supply." That covers everything.

Is that really accurate, though? The excess demand is right, but not in excess of supply. But I think it's easily fixable:

"There's more demand than the supply at the current price."

And that's even shorter and easier to grasp than my earlier suggestion.

"Demand exceeds supply" --> price goes up

"Supply exceeds demand" --> price goes down

You missed the point of why that definition doesn't work. Demand goes up for crypto and stocks even though there's plenty of supply.

Quote: MichaelBluejay

You missed the point of why that definition doesn't work. Demand goes up for crypto and stocks even though there's plenty of supply.
link to original post

Anyone who is not willing to sell at the current price is not part of "supply".

"Demand" is the number of shares people would like to buy at the current price. Demand is lower at a higher price and higher at a lower price. "Supply" is the number of shares people are willing to sell at the current price. Supply is higher at a higher price and lower at a lower price.

If one is higher than the other at the current price, the price moves up or down so that the two are the same.

So...you didn't even read the discussion you were replying to.

Quote: MichaelBluejay

So...you didn't even read the discussion you were replying to.
link to original post

I did, and I understand the concept very well. Why would you say that I didn't even read the discussion? It should be obvious that I did. What is your problem, anyway? Why do you have to make these hateful replies?

Quote:

Demand goes up for crypto and stocks even though there's plenty of supply.

As I wrote before, this is incorrect. "Supply", when it comes to determining the market price, is the number of shares people are willing to sell at a given price.

What do you mean by "there's plenty of supply"? People can't buy something that isn't for sale. The supply of shares people are willing to sell is not limitless, and it is a function of price.

Quote: KevinAA

Quote: MichaelBluejay

So...you didn't even read the discussion you were replying to.
link to original post

I did, and I understand the concept very well. Why would you say that I didn't even read the discussion? It should be obvious that I did.
link to original post

It's obvious that you either didn't read it or didn't understand it, because your comment added nothing that wasn't already discussed.

Quote: KevinAA

As I wrote before, this is incorrect. "Supply", when it comes to determining the market price, is the number of shares people are willing to sell at a given price.

What do you mean by "there's plenty of supply"? People can't buy something that isn't for sale. The supply of shares people are willing to sell is not limitless, and it is a function of price.

Again, this was all covered before. You're acting like you're contributing something new to the discussion. You're not.

I was just trying to help. Sorry!

You're just like one of those people at a table game or bar who is filled with anger and blows up at someone for no reason. I can't imagine you have any friends, unless they're masochists who enjoy being yelled at.

Quote: KevinAA

I can't imagine you have any friends, unless they're masochists who enjoy being yelled at.
link to original post

Personal insult. Three-day suspension. The first suspension of 2026.

I can't explain this any clearer.

In post #972943 I said, in screaming bold type:

Quote:

Is that really accurate, though? The excess demand is right, but not in excess of supply. But I think it's easily fixable:

"There's more demand than the supply at the current price."

I did not add any emphasis here, that emphasis was in the original. I explicitly defined demand for supply at the current price.

You replied with this:

Quote: KevinAA

"Demand exceeds supply" --> price goes up

"Supply exceeds demand" --> price goes down

That's not accurate because it's not specific. You ignored the whole point of the discussion up to that point (starting in post #972932, which is that nebulous use of "supply" and "demand" is inaccurate because it's vague. To be accurate you have to tie the demand to te current price. So, I pointed out that you missed the point.

You replied:

Quote: KevinAA

Anyone who is not willing to sell at the current price is not part of "supply".

[facepalm] Exactly. Which was the entire freaking point of the post you originally replied to, and why I put the definition in screaming bold type. You made your assertion as though you were offering something new to the discussion, though in fact it was already stated boldly.

I pointed out that you apparently didn't even read the discussion that you were replying to. (Because the only other explanation is less flattering (that you read it but didn't understand it).

You replied, insisting that you had indeed read the discussion, and asking "Why would you say that I didn't even read the discussion? It should be obvious that I did." [facepalm]

I replied that you either didn't read or didn't understand it (since you pressed the issue, I finally called a spade a spade), because your comment added nothing that wasn't already said. Everything you said was covered before. If you think it wasn't, the only possible conclusions are that you didn't read or didn't understand what was already said.

Everything I said in our discussion was objective. You replied with insults, in the same breath as you hypocritically accused me of being filled with anger and blowing up. (Re-read my comments and then your own, and see if you really believe that you can seriously claim any moral high ground here.)

And you said I made my supposedly "angry" comments "for no reason". So, yet again: The reason I made my (non-angry) comment that you acted like you were adding to the discussion and didn't read or didn't understand what had already been said, was because you acted like you were adding to the discussion and didn't read or didn't understand what had already been said.

Does this make sense now? I doubt it. I don't think I've ever before encountered someone who insisted that they read and understood what they could not possibly have read and understood. That's why I'm replying now, because the phenomonon is fascinating. I'm curious to see if you will realize and admit that what you offered had already been covered explicitly. There is no shame about being wrong about something. The shame comes from not admitting it, and blaming others.

Feel better?

Quote: Calder

Feel better?
link to original post

He just fixed the internet. Give him a minute to enjoy his success.

As a writer, I pride myself not on my prose, which is mediocre at best, but on how I organize the information, and make the takeaways clear. Towards that end, I was never really happy with my Gambling Taxes article, it didn't really rise to the level of awesome. But I just spent two days rewriting it (and splitting it up so now it's a 6-part series), and now I'm finally satisfied. See what you think: How to report gambling wins and losses for taxes

Quote: MichaelBluejay

As a writer, I pride myself not on my prose, which is mediocre at best, but on how I organize the information, and make the takeaways clear.
Towards that end, I was never really happy with my Gambling Taxes article, it didn't really rise to the level of awesome. But I just spent two days rewriting it (and splitting it up so now it's a 6-part series), and now I'm finally satisfied.
See what you think: How to report gambling wins and losses for taxes
link to original post

I think you need to add a disclaimer so you're not sued:
I'm not a CPA
This is my opinion
My interpretation of the tax code where it relates to gambling
If unsure, contact a tax professional
Etc

It's not "opinion". It's what the IRS says, what court cases say, and what gambling-expert CPAs say. I just aggregated all the sources together to make a coherent blueprint. Further, tons of CPAs get gambling taxes exactly wrong, and somehow they're still in business.

When bigger outlets (like Fortune magazine) publish tax articles, they do what I did: cite expert sources but not specifically say "I'm not a CPA".

Nevertheless, I double-checked with ChatGPT which said of anyone contemplating suing me:

Quote: ChatGPT

They would have to prove:
• You supplied false information
• You failed to exercise reasonable care
• They reasonably relied on it
• They suffered financial damages

If your article accurately reflects IRS publications and tax court decisions, that claim is very weak.

Since I just expanded it to a six-part series, I figured I might as well share everything that's available now:

• How to report gambling wins and losses
• Why you need a session log and how to keep one
• 9 reasons why gambling taxes are unfair
• What does it mean to “itemize” on your taxes?
• What causes W2-G forms to be issued?
• Tons of additional expert sources

Quote: MichaelBluejay

Since I just expanded it to a six-part series, I figured I might as well share everything that's available now:

• How to report gambling wins and losses
• Why you need a session log and how to keep one
• 9 reasons why gambling taxes are unfair
• What does it mean to “itemize” on your taxes?
• What causes W2-G forms to be issued?
• Tons of additional expert sources
link to original post

Session logs if you don't have one when audited:
Reconstitute it from bank records. (Bonus: have a separate acct just for gambling)
- Date, ATM withdraw and deposits, casino
(Keep ATM receipts especially if withdrawals on/near casino location)

Session log better match with your bank statements because the IRS will have access to your accts.
Will it fly? Don't know but Better than nothing.
Oh, and those amounts better match what you put down in your 1040. Easiest way to avoid penalties or even jail because they think the # you omitted was big enough to be criminal tax evasion:
1) gambling bank acct
2) if year ending# is greater than starting#, enter profit into 1040

Filling a 1040x AFTER you're notified of an audit probably won't wok.
But ask the IRS person that sent you the notice if you can do it in lieu of the audit. You never know...
(And for God sake, sign the 1040x!)

Quote: MichaelBluejay

Since I just expanded it to a six-part series, I figured I might as well share everything that's available now:

• How to report gambling wins and losses
• Why you need a session log and how to keep one
• 9 reasons why gambling taxes are unfair
• What does it mean to “itemize” on your taxes?
• What causes W2-G forms to be issued?
• Tons of additional expert sources
link to original post

It's probably poorly written, but for now I'm not going to bother reading it and supplying constructive criticism, because you can't stand constructive criticism, so it would just be a waste of time.

Quote: KevinAA

It's probably poorly written, but for now I'm not going to bother reading it and supplying constructive criticism, because you can't stand constructive criticism, so it would just be a waste of time. link to original post

You need to be able to differentiate "I didn't understand something that was written clearly" from "The person who wrote it can't stand constructive criticism."

Quote: 100xOdds

...- Date, ATM withdraw and deposits, casino
(Keep ATM receipts especially if withdrawals on/near casino location)... link to original post

That's a great suggestion! I now have a section “Making sure your log passes” muster with this and some other ideas. Thank you.

From Reddit:
I’m a little confused regarding the 90% gambling tax deduction on losses
Let’s say I made 30,000 in a year sports betting , and lost 50,000. Regularly I can only offset up to 30,000 I won but with the new tax rule am I only deducting 90% of the 30,000 making my losses 27,000 or 90% of the 50,000 allowing me to completely deduct a 30,000$ loss from 30,000 win? And also I didn’t get any w2g forms since wins were too low for a tax form.

I once had the same question, reading the section in the law seems clear that, using your example, it would be the lesser of:
90% of 50k$ Or 30k$
So 30k$. I don’t know if IRS has or will interpret it another way but it seems pretty clear in the wording of the law that that’s what they meant, so I’m inclined to believe the IRS &/or tax courts would interpret it that way too.
*********************************************************
So it looks like if 90% of your gambling losses is more than your wins, you can write off all of your wins. It isn't 90% of your losses up to 100% of your wins. But if 90% of your losses does not cover all of your wins, then the phantom income effect comes into play.
If you're getting 92% RTP on your sessions totals, you'll be owing tax on the 2% of your winnings the 90% of losses didn't cover.
If you're getting 102% RTP on your sessions totals, you'll be owing tax on the 12% of your winnings the 90% of losses didn't cover.
So it's best to cash-out of your sessions when you're ahead. Buy-in for more until you get back to even or better. Don't have any losing sessions, lol.

********************************************************************************************************
I've got a potential issue with this paragraph too.
Comps are sometimes taxable, sometimes not. This is a gray area, since the IRS hasn’t defined it clearly (in keeping with their proud tradition), but tax professionals advise that if the casino gives the comp as a gift, it’s not taxable (e.g., free room offer you got in the mail, where the casino hopes you'll play, but doesn't require you to), while if you earned it through your play, it is taxable (e.g., cashback or a buffet that you got from accumulating points through slot play).
***********************
I've thought points on a Player's Card are like credit card points and are not taxable. But when it comes to casino points that's not the case? Do people get 1099-MISC forms when they eat 200,000 points worth of restaurant food over an entire year at a single casino now? If people get half of their money back in points for other uses like Free Play, do they get a tax form when they buy $2,000 in gas at the gas station or $2,000 worth of free play from 400,000 points?
I thought Dark Oz made it clear that points and associated free play from points were not taxable but winning free play on a kiosk game or a spinning wheel was.

Quote: KevinAA

It's probably poorly written, but for now I'm not going to bother reading it and supplying constructive criticism, because you can't stand constructive criticism, so it would just be a waste of time.
link to original post

Personal attack.
7 days, deducted from outstanding credit.

At least read the article before saying it's badly written.

Quote: ChumpChange

So it looks like if 90% of your gambling losses is more than your wins, you can write off all of your wins. It isn't 90% of your losses up to 100% of your wins. But if 90% of your losses does not cover all of your wins, then the phantom income effect comes into play.

That's exactly right.

$30k wins, $50k losses:
- Losses limited to $50k x 90% = $45k
- Losses further limited to $30k wins = $30k

$50k wins, $30k losses:
- Losses limited to $30k x 90% = $27k

I'll clarify in my article that the phantom income penalty kicks in only when wins are ≥90% of losses.

The 90% rule is for the 2026 tax year (returns filed in 2027). There's a good chance it will be overturned before anyone has to file.

Quote: ChumpChange

I thought Dark Oz made it clear that points and associated free play from points were not taxable

Like I said, and you quoted, the IRS hasn't explicitly defined it, so no one can say definitively how it should be handled. Tax pros advise that comps specifically earned from points/play should be considered taxable, and they seem to be a better source than a player. But if I had good evidence that these comps are actually not taxable then I'd certainly go with that.

Quote: KevinAA

It's probably poorly written...so it would just be a waste of time. link to original post

Well, a CPA just reviewed it and said I get “ten gold stars”, so nanny-nanny boo-boo.

Quote: MichaelBluejay

Quote: KevinAA

It's probably poorly written...so it would just be a waste of time. link to original post

Well, a CPA just reviewed it and said I get “ten gold stars”, so nanny-nanny boo-boo.
link to original post

Does your site make enough money to cover CPA review?

Quote: 100xOdds

Does your site make enough money to cover CPA review? link to original post

Yes it does, but I didn't pay for it. I read lots of articles to be able to write my own, and one was so outstanding that I wrote to the author to say so. I was surprised when he called me to talk about my own article.

Looks like this page needs an update for the new 2026 $2K/W-2G form threshold with a $16.1K standard deduction for singles..
Taxable Return from Video Poker
https://wizardofodds.com/games/video-poker/taxable-return/

According to Russell Fox, who does the taxes for professional gamblers, the IRS computer will flag any return where the declared gambling winnings fall well short of the total W2Gs. He says there is about a 50/50 chance this will lead to an audit. If you get audited, then you can expect to fight the IRS for at least a year through their levels of appeal. Assuming you kept good records, you should win in the end.

Quote: ChumpChange

According to Russell Fox, who does the taxes for professional gamblers, the IRS computer will flag any return where the declared gambling winnings fall well short of the total W2Gs.
He says there is about a 50/50 chance this will lead to an audit. If you get audited, then you can expect to fight the IRS for at least a year through their levels of appeal. Assuming you kept good records, you should win in the end.
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Define well short.

I've had 5 figures w2-g's since pre-COVID and zeroed it with gambling losses.
No audit.

Or do you mean with this new 90% deduction gambling law?
So with 2025 w2-g?

The IRS computers red-flag many returns, for many reasons. That doesn't mean anyone will follow through. The IRS enforcement division has been decimated in recent years and has to prioritize whom it goes after.

Katrina Bookman's suit was dismissed with prejudice in January 2025. Each side paid its own legal fees.

Quote: billryan

The IRS computers red-flag many returns, for many reasons. That doesn't mean anyone will follow through. The IRS enforcement division has been decimated in recent years and has to prioritize whom it goes after.
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Most audits are so-called "correspondence audits." They send you a letter, explain the error, and give you so much time to respond. For example, if you failed to include your schedule D, you get a letter saying numbers don't match and you need to send proof.

Same thing would happen here.

Quote:

3. Starting in the 2026 tax year (for returns filed in 2027) it’s even worse: losses are limited to only 90% of your wins. So if you win $5000, you’ll be able to deduct only $4500 in losses, no matter how high your losses were. That means you pay taxes on $500 of “phantom income”. This was part of the Big Beautiful Bill.

wrong

Quote: KevinAA

Quote:

3. Starting in the 2026 tax year (for returns filed in 2027) it’s even worse: losses are limited to only 90% of your wins. So if you win $5000, you’ll be able to deduct only $4500 in losses, no matter how high your losses were. That means you pay taxes on $500 of “phantom income”. This was part of the Big Beautiful Bill.

wrong
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(That is a quote from my gambling taxes article.)

Whoops. KevinAA is right. Losses are not "limited to 90% of wins", it's that "only 90% of losses are deductible" (and further limited by wins), which is not the same thing. Examples:

Quote: Example with $5000 wins and $6000 losses

Going by the way I originally wrote it, losses limited to 90% of wins:

90% of $5000 wins = $4500 deductible

The proper way, 90% of losses deductible, up to the amount of wins:

$6000 x 90% = $5400
Further limited by $5000 wins >> $5000 deductible

KevinAA, I appreciate your bringing this to my attention, it's important to me that my articles are accurate. I owe you one.

Thanks :)

I like the explanation of how to report gambling winnings properly (W-2G wins on line 8b of Schedule 1 and an adjustment on line 8z to make it equal to session wins). I did not know that. It reduces your taxes (most likely) and avoids triggering an audit because now you're reporting an amount equal to W-2G.

On the page https://easy.vegas/gambling/taxes/how-get-w2g there is an error.

Quote:

If your jackpot is $500 or more, the casino will deduct 24% for withholding (just like the withholding taken from your paycheck, which applies towards the taxes you owe on your 1040).

$500 probably should be $5,000. However, this is not correct. While 24% federal tax withholding is mandatory for any reportable win if you are on backup withholding, if you have a valid SSN, withholding is optional, regardless of the amount. I have worked at different casinos and the procedure was the same. I looked this up and the $5,000 threshold for mandatory withholding even with a valid SSN is for other non-casino games such as dog racing.