Paying Tax at American Casinos

[GrandMaster]

You could conceivably play table games the entire time, be up hundreds of thousands of dollars, and walk out without having to pay a single cent of federal or state tax.



Provided you cash out under 10k per cage visit.

You are required to pay taxes whether any paperwork is generated. Splitting transactions into smaller ones in order to avoid detection is in itself a crime (structuring, aka "smurfing") with potentially much greater punishments than mere tax evasion. Winning hundreds of thousands of dollars would generate plenty of interest from casino management, not to mention the fact that the casino itself can be punished if it fails to report a series of transactions whose sum exceeds $10,000 in one day.

 

[4 of a kind]

You are required to pay taxes whether any paperwork is generated. Splitting transactions into smaller ones in order to avoid detection is in itself a crime (structuring, aka "smurfing") with potentially much greater punishments than mere tax evasion. Winning hundreds of thousands of dollars would generate plenty of interest from casino management, not to mention the fact that the casino itself can be punished if it fails to report a series of transactions whose sum exceeds $10,000 in one day.

Yes this quote is absolutely a matter of fact and law. But in the real world especially here in the USA, tax evasion in every form is common practice. Have you been reading about our congressmen, senators, and appointed public servants lately over here. I don't even want to get started with big business. Three recent appointees this past year couldn't even take office has a result of past tax evasion. There must be at least 4 or 5 others we read about everyday here under investigation for the same. These investigations usually involve millions.

I also understand it is righteous and the liability of every citizen to do the right thing. But I can't recall reading one article, or seeing one newscast about one single casino ever reporting any player for tax evasion any where in the world.

Big hits on slot machines are obviously reported. Forget about big hits, you can't even get away with anything over $1200.00 dollars.

Making a huge hit at the tables over 50k usually involves a high roller. If he uses friends and family to cash out to avoid taxes, and even if the casino knows it, no such reporting will ever occur. They would surely be losing a good customer, with no chance of ever getting it back. Sorry, it's just not gonna happen.

Imagine reading an article or seeing a news report about a casino turning in a customer for tax evasion, and three of his buddies also being charged with facilitating tax evasion. They might as well close the doors.

 

[GrandMaster]

I also understand it is righteous and the liability of every citizen to do the right thing. But I can't recall reading one article, or seeing one newscast about one single casino ever reporting any player for tax evasion any where in the world.

Big hits on slot machines are obviously reported. Forget about big hits, you can't even get away with anything over $1200.00 dollars.

Making a huge hit at the tables over 50k usually involves a high roller. If he uses friends and family to cash out to avoid taxes, and even if the casino knows it, no such reporting will ever occur. They would surely be losing a good customer, with no chance of ever getting it back. Sorry, it's just not gonna happen.

Imagine reading an article or seeing a news report about a casino turning in a customer for tax evasion, and three of his buddies also being charged with facilitating tax evasion. They might as well close the doors.

You misunderstand. Casinos don't report tax evasion, they couldn't even if they wanted to since they cannot know players' future tax returns. They just file currency transaction reports (more than 100,000 a year) and suspicious activity reports (about 10,000 a year). In the casinos everybody is being watched by someone, there would have to be several casino employees involved, and you would need dozen of smurf. It is not as easy as you make it out to be.

One guy who was caught due to currency transaction reports:

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.
MGM Mirage was fined $5 million for failing to file reports between 2001 and 2003:

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. I bet they pay more attention now.

 

[4 of a kind]

I could carry on with debate GrandMaster, but really don't see any point. Interesting research, but not really on target.

 

[scratchy]

Good Day Fellows Gamblers

This is a good thread going on here. I live in Canada and boy I am sure glad I do when it comes to gambling. No taxes on gambling, lotto, or online. Someone mentioned about casino's, well I live in Oil Country, the province of Alberta and I think we have about 35 ish casino's in the province. The two major cities Edmonton and Calgary have about 7 a piece. We don't get heat up here from the casino's, at least I have not seen or heard about it. That in case I don't know what you would consider a high roller.

Anyways, it is about a 3 hour plane ride to vegas from Calgary or Edmonton. The only thing that is gonna kill you moving here is housing prices or rent, average house price is 350,000.

Scratchy

 

[winbig]

I wasn't really sure where to post this so please move to a more appropriate section of the forum if need be.I couldn't find a real suitable section to post this but would like peoples thoughts and ideas on the matter.

I am thinking of moving to the US but don't like the idea of paying tax on my gambling wins so i was just wondering how much tax the casinos actually take out of your gambling wins, if you can claim tax refunds on this and generally how much of an effort it takes to declare your winnings and losses to the IRS?

I would love to move to the US but the taxes on gambling is probably the only thing that is really stopping me from going any further with the idea however i don't mind paying taxes as long as they are reasonable.You also have to bear in mind i come from a country where all gambling wins and losses are completely tax exempt.

So please give me your opinions.

For casinos, you can win $9,999 in a year and still not get a W2G to use in filing your federal taxes. As far as state taxes go, it varies between states, but it seems the norm is that if you win $1200+ on one game/slot, you'll have to pay taxes on it.

Splitting up transactions between cages is a moot point when it comes to the $10K threshold. If you're playing with a players card, they can track your wins/losses down to the penny.

Here's an example of the win/loss record that the Harrah's group spits out each year. I did pretty good, but still didn't have to pay a penny of my winnings on taxes:

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Of course there is a loophole. Simply don't play with a player's card, and they will have no way of tracking your wins/losses. The downside to this would be that you'll never get any sort of comps, and if you ever hit it big, you'll have some serious explaining to do to the IRS.

If you're a low roller, I don't see casinos having a problem in playing without a card. However, I have seen some casinos with lower table limits if you're playing 'unrated' ie: without a players card.

edit: If you're a poker player, it's impossible for them to track your wins/losses, so it's up to you in regards to claiming anything on your taxes if you only play cash games as opposed to tournaments.

 

[GrandMaster]

You are mistaken on several points. $10,000 is the daily limit for cash transaction reports. The limits for W-2G vary from $600 to $5,000, but all gambling winnings are taxable at the federal level (losses may be claimed as itemized deductions) regardless of whether a W-2G was issued. There must be billions of dollars of unpaid taxes on gambling winnings, yet this does not seem to bother anyone in the government.

 

[winbig]

You are mistaken on several points. $10,000 is the daily limit for cash transaction reports. The limits for W-2G vary from $600 to $5,000, but all gambling winnings are taxable at the federal level (losses may be claimed as itemized deductions) regardless of whether a W-2G was issued. There must be billions of dollars of unpaid taxes on gambling winnings, yet this does not seem to bother anyone in the government.

I would think that if W2G's were required for overall wins of $600 - $5,000, then casinos would be obligated by law to send one out...

..and you're right about it not bothering anyone in the government..if the casinos don't send out a w2g, then of course nobody is going to claim anything on their taxes.

 

[GrandMaster]

I would think that if W2G's were required for overall wins of $600 - $5,000, then casinos would be obligated by law to send one out...

Straight from the horse's mouth:

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