Ask the Slot Expert: More on gambling losses, taxes, and keeping a record

John,

Personally I feel taxpayers should be able to use the capital gains/losses for our gambling venture. Primarily because it's not required to itemize. My observation at casinos is that the clientele are mostly OLD codgers who more than likely are past the stage of itemizing. So the need to itemize deprives us of the healthy standard deduction. Treating the gambling income/loss as a capital gain/loss would allow using a standard deduction, a "cost basis" for winning and a "carryover" to future years of the losses. I honestly believe the stock market is gambling. If that isn't an option, then the government should at least raise the W-2G requirement to $5,000, simply for inflation.

If Mike thinks society shouldn't cover the losses of gamblers... maybe he should realize that TAXPAYERS cover the losses of every BUSINESS that claims a LOSS even with billions of dollars in revenue, e.g. General Electric.

The differences between gambling in a casino and "gambling" in the stock market are that (1) there is the presumption of intending to make a profit investing in the stock market, and (2) there is the presumption that the rules of investing in the stock market are not biased against the investor. In the casino, the presumption is that you will lose some or all of your bankroll mainly because of the fact -- not presumption -- that the rules in the casino are biased against the player.

Casino gambling is a hobby, not a business. I see no reason why gamblers should be able to offset other income with gambling losses, as they would with other capital losses -- unless they're professional gamblers.

But I do think we should be able to easily declare true winnings and not have to declare some winnings on one form and losses on another.

Best of luck in and out of the casinos,
John

John:

Gambling winning can be offset by gambling losses. Winnings in excess of losses are taxed at normal income tax rates. But any losses in excess of the winning cannot be deducted unless you can prove you are a professional gambler.

YOU MUST KEEP A CURRENT RECORD OF YOUR WINS AND LOSSES, preferably by hand and not in an electronic spreadsheet. I keep a notebook with me and write down all the info about the table I play at including game, time, table minimum and casino. I also note table number, dealer name, and supervisor name. I do this away from the table because taking notes at a table makes security nervous.

I don’t play slots but keeping this information would be a lot easier at a slot machine.

Phil (CPA)

Dear Phil,

I think that, on the whole, it's harder for slot players to keep a log like yours, not easier.

I'll admit that it is easier for a slot player to write in a notebook without scrutiny. But slot players have many more choices than table game players and, on average, I think they change machines many more times than a table game player switches tables in a typical session. Come to think of it, if one is playing baccarat or roulette, the casino might not even have another table to switch to!

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net. Because of the volume of mail I receive, I regret that I can't reply to every question.