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Best of John G. Brokopp

Gaming Guru

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IRS Discrimination Against Slot Players?

9 July 1999

Have you ever wondered why slot machine jackpots are the only casino winnings for which players are held accountable for federal and state taxes, while big scores made by table games players go undocumented?

Hit a 2-coin dollar Double Diamond machine for the top award of $1,600 and the casino representatives are right there with an IRS Form 1099 for you to sign. That money will be reported to the federal government as gambling winnings and you , in turn, are required to report it as income on your year-end tax return.

Play high stakes blackjack, roulette, or craps, on the other hand, and the story is different. During my casino wanderings, I've seen players with purple chips ($500) bet the table max and win thousands, yet nobody scurries over with forms for them to fill out.

In an effort to find out why casinos discriminate against slot players, I gave Chicago PR maven Kathy Posner a call. Her Chicago-based public relations firm, COMM 2, represents the Hollywood Casino Aurora:

"It's not the policy of the casinos," Kathy revealed. "It's federal law that the casinos must abide by. The law states that anyone who wins a jackpot of $1,200 or more from a slot machine, a video poker machine, or a Caribbean stud poker progressive must sign an IRS form and therefore be held accountable for the money as taxable income."

But what happens when a table games player walks out of the casino with thousands of dollars in winnings? Kathy put this column in touch with Joe McBride, vice-president of finance and administration for the Hollywood Casino:

"The only documentation for a table games player is when he or she converts $10,000 or more cash money into casino chips, or when $10,000 or more in casino chips is converted into cash money," McBride said. "At the time of the transaction, the person is required by law to fill out a form, the same form a person would be asked to fill out if they walked into a car dealership with $10,000 or more in cash to buy an automobile, for example, or any other transaction involving $10,000 or more in cash."

To complete the explanation, Kathy placed a conference call with Lois Boudreau of Mid-City National Bank in Chicago:

"The form is called a Currency Transaction Report, but it's not filed for the purposes of taxation," Lois said. "It's required as a matter of record in any business for large cash transactions of $10,000 or more."

So don't blame the casino the next time you hit a slot machine for $1,200 or more and are descended upon by casino reps, while that fellow who just won $2,000 on a single hand of blackjack a few feet away goes unnoticed. It's the law. And remember this: A slot jackpot can be won with a dollar or two, while much larger stakes are put at risk by table games players in most cases.

Final words of advice from Hollywood Casino's Kathy Posner: "Even if you have to report slot jackpots as income, you can offset your winnings if you keep accurate records of all your slot play during the course of a year and can document losses."

"Individual casinos can provide you with win-loss statements on your account if you use your player tracking card all the time," Kathy noted, " but there's no substitute for keeping your own records with statements and receipts to back up your information."

John G. Brokopp

John G. Brokopp's gaming column appears in Chicago Sun Times (Chicago, Illinois), The Times (Northwest Indiana), The Quad City Times (Davenport, Iowa), The Courier News (Elgin, Illinois), The Gazette (Southwest Suburban Chicago) and Senior Wire (Denver, CO). He's also a regular contributor to The Colorado Gambler, Midwest Gaming & Travel, Casino Player and Strictly Slots. John possesses 28 years of experience as a professional handicapper, publicist, freelance writer, and casino gaming correspondent. He is also the author of two very popular books, The Insider’s Guide to Internet Gambling and Thrifty Gambling.

Books by John G. Brokopp:

> More Books By John G. Brokopp

John G. Brokopp
John G. Brokopp's gaming column appears in Chicago Sun Times (Chicago, Illinois), The Times (Northwest Indiana), The Quad City Times (Davenport, Iowa), The Courier News (Elgin, Illinois), The Gazette (Southwest Suburban Chicago) and Senior Wire (Denver, CO). He's also a regular contributor to The Colorado Gambler, Midwest Gaming & Travel, Casino Player and Strictly Slots. John possesses 28 years of experience as a professional handicapper, publicist, freelance writer, and casino gaming correspondent. He is also the author of two very popular books, The Insider’s Guide to Internet Gambling and Thrifty Gambling.

Books by John G. Brokopp:

> More Books By John G. Brokopp