You won! Great. Now pay Uncle Sam
Dear Mark,
I was recently in Las Vegas playing roulette and came away
with a large $2,000 win at Bally's. What surprised me is
they didn't request filling out any information for the
IRS. I have in the past won $1,300 in slots and was requested
on the spot to supply the required information like SS number,
driver's license, etc. for a W2-G. Why are table games treated
differently from slots when it comes to gambling? Stan B.
The
difference between table games and slots is that when you
insert three slugs and hit it big, bells ring, lights flash
and a host of freeloaders climb all over your back looking
for a handout-including Uncle Sam. On table games, sizable
wagers of $1,300 are the norm for high rollers. Can you
imagine the casino stopping a table game like blackjack
every time a player wins a $1,500 hand to make the player
fill out a W2-G? For this reason the IRS has Revenue Procedure
77-29, which is the guideline to gamblers for tax purposes
on the treatment of both gambling winnings and losses.
Back
in 1977 the IRS introduced the W2-G (statement of gambling
winnings) to replace form 1099 for reporting gambling wins
as well as income tax withheld. According to the IRS, the
payer must issue you a W2-G form if your winnings are $600
or at least 300 times the amount wagered. This would be
representative of winnings from dog racing, horse racing
and state lotteries. Casino winnings are treated slightly
different as a W2-G must be issued and filled out by the
casino if a bingo or slot machine win is in excess of $1,200,
or net proceeds from a keno win are greater than $1,500.
Note here that I stated "net proceeds" from keno
being larger than $1,500. The amount of winnings can be
offset by the amount wagered on your ticket for that one
game. This is a benefit to keno players who mark extensive
way-tickets that can cost them well over $100. Some players
even play certain tickets that have payoffs of exactly $1,500,
then back off the dollar they wagered, and avoid having
to fill out a W2-G.
Oh yes, one more thing. Now that you have won a jackpot and received a W2-G, don't think there is any way of avoiding your tax bill. The IRS also receives a copy of the W2-G from the casino, and now their computers also know of your fortunate winnings.
Dear
Mark,
Is it true that a video poker machine internally knows which
cards it initially deals and then gives you lousy cards
so you won't have a winning hand? Mark S.
Without hesitation, Mark, I unequivocally state, slot machines
in regulated gaming jurisdictions have random outcomes.
You can be confident that laws are in place to assure you
a square game, without shenanigans.
Most
states operate with gaming regulations that require their
gambling devices to have a random outcome. In order to satisfy
this requirement, slot machines of all types use a random
number generator software algorithm to determine the games'
results. This insures that all video poker machines are
based completely on chance, just as if the cards were dealt
from a perfectly shuffled deck. BUT, the operative phrase
here is "regulated gaming jurisdictions."
Some casinos operate in locations without any forcible gaming statutes. Examples would be Indian reservations not subject to state regulations, internet casinos and cruise ships that sail in international waters. Also note, Mark, that technology does exist so slot machines won't act randomly; instead, they are pre-programmed to avoid giving you a royal flush. These machines are illegal in Nevada, New Jersey and all states that pattern their gaming regulations after these two industry leaders. You might, nonetheless, stumble on them in ungoverned casinos.
SPORTS BETTING TIPS
Sports betting is a game of skill. Find out how to gather and analyze data, weigh probabilities, and compare your opinion with the oddsmaker... read more »
RACEBOOK TIPS
Professional bookmaking for horseracing emerged in England during the 1800's. During this period, bookmaking was conducted by various individuals. Regulation as we know it did not exist... read more »