Ask the Slot Expert: Is free play taxable?

Question: I read your story about free play. When you win Free play from a drawing or tournament, does it ever become a taxable event? For example, is winning $1000 taxable? $2000?

I understand if I win a jackpot during free play it is taxable, but is the event of winning free play a taxable event?

Answer: The relevant threshold in this case is $600, the minimum to trigger a tax form for a lottery, drawing, sweepstakes, etc. I've won well over that amount in free play a few times and have never been given a tax form at the time and it has never been included on the year-end 1099s I've received when I've won more than $600 in drawings and other promotions in a casino in a year.

I checked Tax Help for Gamblers by Jean Scott, et al., to see what they have to say about free play. They said that it is a gray area, in that the IRS has never formally ruled one way or the other. They felt, however, that you do not have constructive receipt of the free play funds because of the restrictions placed on them. You don't have control of the money until after you've played the free play through a machine. The awarding of the free play, therefore, is not a taxable event.

As you pointed out, any jackpots you win from the free play are taxable and, moreover, everything you win from the free play is taxable.

Question: Access to the information on my Player's Card was given to a restaurant employee. Due to a totally unrelated situation, my privacy was compromised. Do I have any legal recourse?

Answer: European Union nations protect their citizens' private information and Europeans generally have to opt-in to allow a company to share their private information. In the U.S., however, you have to opt-out of having your information shared and many companies are required to send yearly privacy notices that few people read.

Check the privacy policy for the casino/corporation in question. I checked the policies of two of the corporations in whose casinos I play frequently.

Each policy states that once you've shared your personal information with the company by signing up for a player card or other method, they will use the information in order to conduct business with you. I've frequently used my player card to pay for meals at restaurants. I know that one system displays the buying power of the points I have on account because the cashier's eyes opened really wide after she swiped my card and she said that I had over 1000 comp dollars available, more than enough for my $5 iced coffee and bagel. I don't know what other information is displayed, but I don't see any reason why anything more than comp dollars available should be shown.

I don't know what access means exactly. Was the restaurant employee only able to view your information or was he or she able to update it? I suppose this is ultimately irrelevant because in your second sentence you say that your privacy was compromised due to a totally unrelated situation."

As I said, check the company's privacy policy. If you feel that the sharing of your information was contrary to that policy, consult an attorney to see if you have legal recourse.

Question: A few weeks ago in Gaming Today, in one of the columns, the author mentioned a web site that gave a list of the casinos, in a town, that had the best payouts. Would you happen to know of one?

Answer: Absolutely. The best site for finding out which casinos have good video poker is VpFree2.