Have you ever wondered why players are so meticulously held accountable for slot machine jackpots with federal and state tax forms while big scores made by table games players go undocumented?
Hit a penny machine for a jackpot over $1,200 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. The player is required to report it as income on their 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.
According to the experts this is not the policy of the casinos. It’s a 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?
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.
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.
The form is called a Currency Transaction Report, but it’s not filed for the purposes of taxation. It is 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.
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 but there’s no substitute for keeping your own records with statements and receipts to back up your information.
