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 W-2G. 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 W-2G? 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 W-2G
(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 W-2G 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 W-2G 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 W-2G.
Oh yes, one more thing. Now that you have
won a jackpot and received a W-2G, don't think there is any way of
avoiding your tax bill. The IRS also receives a copy of the W-2G 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
preprogrammed 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.
