Posts Tagged ‘tax revenue’

Gambling and Taxes

Wednesday, February 2nd, 2011

This is probably the least favorite blog post I will ever write, so I’ll try to make it short and painful. If you live in the United States, tax day is coming up in April. You are no doubt dreading this day even more so than you dread looking at the deductions on each paycheck. If you play blackjack for real money, here’s what you need to know.

You are probably aware that if you hit a jackpot of $1,200 or more at a casino, the casino will then take down all of your personal information and have you fill out a tax form on the spot. The casino will then pass that information along to the IRS. What you may not know is that any amount you win on gambling must be reported. Even if your net win was $1, you must report that $1 as income received from gambling.

Yes, it’s true. And it’s not just casino games. According to the IRS, you must report winnings from all gambling, which includes but is not limited to, winnings from casinos, horse races, lotteries, and raffles. That means if you play a scratch-off game and win $5, you’re required to report that to the IRS. Yes, I realize that no one does that, but to be in full compliance with the law, you must.

The IRS taxes all income you make, including from a casual game of blackjack. The good news is that if you itemize your deductions, you can also report your losses and receive deductions for those. Hey, at least the losses are good for something! To deduct your gambling losses, “the amount of losses you deduct may not be more than the amount of gambling income reported on your return,” according to the IRS website.

What this means is that when you are gambling, you need to be a good bookkeeper. Record how much you wager, how much you make and how much you lose for each gambling session. That way, you can accurately report your tax information to the government. Recording that information is also good for your budgeting and I recommend everyone do it to make sure they aren’t spending too much money at casinos.

PA to Have Blackjack by July 4?

Thursday, February 18th, 2010

Last month, many blackjack fans were pleased to hear that Pennsylvania Governor Ed Rendell had signed a bill into law that would allow table games in the state. Since then, the move to allow blackjack, poker and other table games in state casinos has been put on the fast track. The Chairman of the Pennsylvania Gaming Control Board, Greg Fajt, says that table games could be in operation in the casinos by the Fourth of July.

To gambling enthusiasts, that date makes perfect sense. On America’s Independence Day, when freedom is celebrated more than any other time, gamblers will be given the freedom to challenge a dealer at blackjack, something that inexplicably had not been allowed before.

Yesterday, the gaming board issued temporary regulations for casinos that are adding table games. By issuing the temporary regulations, the process of getting the games up and running is sped up. Those regulations include the required training for dealers and which rules are accepted for poker, among other things. The temporary regulations are effective immediately and last for two years. By the end of that two-year period, the gaming board will have had time to sit down with the casinos, unions, and everyone else involved, and come up with more permanent regulations.

Prior to this table game legislation being signed into law, only slot machines have been allowed in Pennsylvania casinos. By adding table games, the slot casinos should be able to attract more customers and make a lot more money, which in turn will benefit the state of Pennsylvania due to the tax revenue and other costs. Each casino that wants to add table games must pay a $16.5 million license fee up front. In addition, in the first two years, table games will be taxed at 16%, with it dropping slightly to 14% after that time. Larger casinos will be allowed to add up to 250 table games each, while small resort casinos will be allowed 50 table games.

The legalization of table games is thought to be a great help for Pennsylvania’s economy, but not everyone is happy. Take the state of New Jersey, for example. That state has its own gambling market and isn’t pleased at the thought of more competition. Many in the state fear that Atlantic City casinos will lose a lot of business to the Pennsylvania casinos, particularly the New York City market.