Article Date:
March 2014

Word Count:



U.S. Government Models Gambling Tax Law after Vegas Casinos

You probably know people who believe they can beat the odds in Vegas.


You should be skeptical.


According to statistics from the University of Nevada, Las Vegas (UNLV) Center for Gaming Research, your gambling friends are almost certain to lose over the long haul.1


But the odds in Vegas look downright outstanding when you compare them with the tax law treatment of your gambling income and losses.


(If you are a professional gambler who is in the business of gambling, skip this article and read New Tax Court Ruling Makes Gamblers Rejoice. This article is for the recreational and non-business gambler.)


IRS House Edge


Many non-business gamblers discover they owe tax despite having zero net gambling income. This IRS “house edge” is the result of a combination of factors:



One-sided reporting requirements on your gambling income


Deduction limitations on your gambling losses


No deductions for transportation and travel expenses


Substantiation rules


Just ask Ann Laplante about the IRS house edge. According to both the lawyer that prepared her tax return and the IRS, she had a net loss from her time playing the slot machines. So it ... Log in to view full article.

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