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Thread: Cash or Reward Credits??

  1. #1
    Here's something to ponder:

    On March 14, Rincon will have several drawings including a jackpot drawing at 11pm when one guest will be chosen and given this option: take $10,000 in cash or 2-million Reward Credits.

    Interesting question.

    First, I considered the "cash value" of the 2-million Reward Credits if used for free play. Since I'm 7 stars, 2-million in RCs can be converted to $16,000 of free play.

    This raises some questions:

    1. Is $16,000 of free play worth more, the same, or less than $10,000 in cash? With a miserable 85% return $16,000 of free play is worth $13,600 in cash. So right away I would opt for the RCs and convert them.

    But that brings us to...

    2. How quickly can I convert the RCs to free play? There has been a rule that RCs can only be converted to a maximum of $500 free play each day. This means 62,500 in RCs can be converted each day -- unless there is some special rule.

    At 62,500 RCs per day, it would take 32 days of play to get the $16,000 of free play.

    3. Playing 32 days at $500 of free play each day would entail some other costs: travel and food primarily which would lessen the value of the $500 each day.

    The 32 days needed for redemption makes the 2-million RCs less attractive to me.

  2. #2
    Rincon will 1099 you on the $10,000 cash. If you don't max out your SSI there will be at least a 15.3% tax on your winnings. Also, you can't write off gambling losses against it.

    Last year Rincon sent me a 1099 for $720 for one of the cash days. I would have only taken $595 if I had known this ahead of time.

    I no longer go on cash days!

    If you play the RCs in Vegas you earn Tier Points.

  3. #3
    Originally Posted by Alan Mendelson View Post
    Here's something to ponder:

    3. Playing 32 days at $500 of free play each day would entail some other costs: travel and food primarily which would lessen the value of the $500 each day.

    The 32 days needed for redemption makes the 2-million RCs less attractive to me.
    Alan, you do not need to make round-trips each day. You must be eligible for hotel and you get two free buffets each day. So stay over a weekend and your food and travel costs get mitigated.

    FAB

  4. #4
    Aaron is correct about the tax but I'm not sure it can't be offset with losses. Can someone confirm that part?

  5. #5
    I have checked the web for various articles about how to treat a 1099 for a gambling "prize" and whether it can be offset with losses. It appears to me that a 1099 prize can be offset. I am not a tax expert but consider the following which do mention offsetting a 1099 prize with other gambling losses:

    https://ttlc.intuit.com/questions/23...-from-gambling

    http://www.goodcasinos.net/the-taxman-cometh.htm

  6. #6
    I'd take the RC, given you have 365 days to use them all.
    Cash out $500 per day, one weekend a month in Vegas ($1500) playing $1 JoB or BP...99% chance you'd never get a royal AND suck it out at +$10k with NO TAXES!
    FWIW: I've "sucked out" $4000 worth of FreePlay so far, for 100% return.

  7. #7
    To answer a question I received via email: Because the prize is Reward Credits -- yes they can be cashed out at any Total Rewards casino. They can also be used for meals, shows, etc.

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