proposed tax changes

[regnis]

I am surprised that I haven't seen more outrage that under the new proposed tax bill, the deduction for gambling losses on Schedule A would be eliminated. As a result, you would be taxed on the gross gambling win. Some states, like Illinois, already tax the gross. But this would now be Federal as well.

It probably affects horseplayers more than casino gambling, although those Royal flushes at higher levels can prove costly. So we recently gained some ground with the new legislation that considers the total bet rather than only the minimum bet in determining the 300 to 1 odds for a W-2 in horses, and now it would take away that benefit and more.

[Alan Mendelson]

I didn't know this. If there were no deduction for losses I would never play anything but low limit, non W2G games again.

And the casinos would die.

[kewlJ]

I am not familiar with this proposal. I suppose with the non-stop coverage of The Vegas shooting, the tax proposal received much less coverage than otherwise would have.

But Alan is correct, not being able to offset, "paperwork" wins, would mean that NO ONE, For profit AP's right down to recreational gamblers, would play anything other than low limit. The penalty for paperwork wins would be too great. This would be a huge blow to the casino industry, as players would cut down to low limit, or STOP PLAYING ALTOGETHER.

[pkspins]

I have wanted to bring this up here but I didn't want to get Rob started.

Yes, the proposed tax reform eliminates most itemized deductions. The original proposal, which came out some time in the spring, was more specific and mentioned eliminating the gambling deduction specifically in the list of many that would be eliminated.
The latest proposal doesn't mention it specifically and just says many. However, you would have to be kidding yourself to assume that gambling loss would still be included in a simplified tax code when eliminating the local/state tax deduction that most Americans itemizing take advantage of is specifically mentioned.

I severely cut my play as a result of the original proposal, since at that time there were strong suggestions that the changes would be implemented to take effect for the 2017 tax year.
At that point, I already had multiple W2Gs from my January Vegas trip, where I came home with a small loss overall but had very heavy play where most of my staying close to even was winning small jackpots.
I normally go there 3-4 times a year, but figured at that point I would wait to see what happened with this before planning more trips, since I didn't want to create any more liability than I already had. So I haven't been back.

I just refuse to do something deliberately to create a huge tax bill when I haven't made a net income as a result.

[pkspins]

But Alan is correct, not being able to offset, "paperwork" wins, would mean that NO ONE, For profit AP's right down to recreational gamblers, would play anything other than low limit. The penalty for paperwork wins would be too great. This would be a huge blow to the casino industry, as players would cut down to low limit, or STOP PLAYING ALTOGETHER.

I agree with you that if you think about it low limit or stop playing altogether makes the most sense.
But a lot of people don't think about the tax implications of what they do.
Look at all of the states that tax gross - their casinos are still full of people playing generally as well as many people playing high limit slots, even though they're battling two loss percentages - the one of the slot payout and the one of the tax they will owe on whatever they win over $1200.
The federal percentages are bigger but still those state taxes and local taxes if the localities follow state are not insignificant.

[kewlJ]

At the start of 2016, I instructed my partner, who handles all our machine play to play all our machine play at the 25 cent level to minimize hand pays and tax forms. Prior to that he mostly played at 50 cents and $1 level (our machine play is low limit), both of which generate handpays and tax forms for royal hits. I didn't make this change because I was aware of any upcoming changes, but for a variety of other reasons, among them just to minimize paperwork.

Up until that time, when my partner hit a handpay/tax form royal while playing on my card, he would quickly contact me (we are usually in the same casino) and although it was probably apparent on several occasions that I wasn't actually playing, we never had any problems. But about that time, I became aware of the Pennsylvania case, involving a team of AP's playing on cards belonging to other members, so this seemed like a good time to make this change and avoid any future problems. Plus, I'll be honest, I hate that we are expected to tip the handpay. It cuts into a very small VP/machine play edge.

Since my partners no longer plays blackjack, because he has a bad back and for some reason it bothers him at the blackjack tables, but not the video poker machines........so his only responsibility is to play through our machine play free play and play required to generate future free play. So at the 25 cent level instead of 50 cent and $1 level, he just has to play a bit more...big deal....it's his only job...well that and chauffeuring me around.

[bocce ball]

I am surprised that I haven't seen more outrage that under the new proposed tax bill, the deduction for gambling losses on Schedule A would be eliminated.

And the casinos would die.

NO ONE, For profit AP's right down to recreational gamblers, would play anything other than low limit.

No offense, but when Alan and kewlJ agree on something, it must be wrong. I think you guys are underestimating the resilience of degenerate gamblers, who simply don't care about tax consequences.

I'm not dismissing the potentially devastating effects on anyone seeking to gamble intelligently. If the legislators actually took a principled position and eliminated all itemized deductions, then they could sharply increase the standard deduction. But in reality they'll probably exempt the most politically sensitive deductions, such as mortgage interest and charitable donations.

Worst case would be elimination of gambling deductions while holding standard deductions near current levels. If that happens, I'll be interested to see how game designers react. We could see a lot more $1195 or $1199 line items on paytables, such as 250-coin quads being adjusted down to 239 coins on a $5 machine. Probably most of the adjustments would be bad, but the good adjustments could create AP opportunities.

[Alan Mendelson]

Pechanga has $5 games that pay $1195 on some quads. That's a big hit and one of the reasons I stopped playing there.

[blackhole]

At the start of 2016, I instructed my partner, who handles all our machine play to play all our machine play at the 25 cent level to minimize hand pays and tax forms. Prior to that he mostly played at 50 cents and $1 level (our machine play is low limit), both of which generate handpays and tax forms for royal hits. I didn't make this change because I was aware of any upcoming changes, but for a variety of other reasons, among them just to minimize paperwork.

Up until that time, when my partner hit a handpay/tax form royal while playing on my card, he would quickly contact me (we are usually in the same casino) and although it was probably apparent on several occasions that I wasn't actually playing, we never had any problems. But about that time, I became aware of the Pennsylvania case, involving a team of AP's playing on cards belonging to other members, so this seemed like a good time to make this change and avoid any future problems. Plus, I'll be honest, I hate that we are expected to tip the handpay. It cuts into a very small VP/machine play edge.

Since my partners no longer plays blackjack, because he has a bad back and for some reason it bothers him at the blackjack tables, but not the video poker machines........so his only responsibility is to play through our machine play free play and play required to generate future free play. So at the 25 cent level instead of 50 cent and $1 level, he just has to play a bit more...big deal....it's his only job...well that and chauffeuring me around.

I don’t understand exactly what you mean in this post. Forgetting about any recent new tax changes, why did you reduce your partners level of play almost two years ago?

You admit you have a small VP/machine edge which generates a profit. You printed the amount profited in a year with machine play not long ago. If I recall correctly it was a nice sum. So, if reducing his play to quarters, you would also reduce your profits by 50% when compared to fifty cent play, and 75% when compared to dollars.

Whatever extra time in paperwork the additional income brings, your saying is not worth it? Why does your partner play with your card not his own? What’s the benefit in that move? Tipping hand pays cut into the profits from machine play you posted? Why would it matter if you generate tax forms or not? Don’t you report all your winnings anyhow?

You said quote: “his only responsibility is to play through our machine play free play and play required to generate future free play.” I just don’t get this. Are you saying you never have out of pocket costs to play the machines. You play with free play, win, then get more free play, win, over and over again.

Not being an AP I’m not sure I understand this AP move.

[bocce ball]

So, if reducing his play to quarters, you would also reduce your profits by 50% when compared to fifty cent play, and 75% when compared to dollars.

He alluded to that in his final sentence above. Slot club benefits may not be perfectly scalable. For example, he may be targeting a particular coin-in total that optimizes mail offers. Or the casino may offer restricted promotions such as double points on the first 5k points only.

So he may be playing with something like a 1% edge on the first 5k, but then only a much smaller edge on any subsequent action. This is partly why APs are skeptical of media reports on the shooter who played high limits. It's tough to achieve big edges for big wagers.

[kewlJ]

I don’t understand exactly what you mean in this post. Forgetting about any recent new tax changes, why did you reduce your partners level of play almost two years ago?

You admit you have a small VP/machine edge which generates a profit. You printed the amount profited in a year with machine play not long ago. If I recall correctly it was a nice sum. So, if reducing his play to quarters, you would also reduce your profits by 50% when compared to fifty cent play, and 75% when compared to dollars.

Bocce ball correctly answered. Same amount of total play, just have to play through more rounds at lower denomination to achieve it. The only "real penalty" is places that have lower paytables on the 25 cent machines than their $1 machines.

Why does your partner play with your card not his own? What’s the benefit in that move?

Yep, he plays on his cards, my cards, and in a few instances I have multiple cards with different numbers, and now my brother's cards as we all are partners in this machine play part of our AP exercise. The benefit? Let's say $10,000 coin in generates X amount of free play for the month. So playing $10k on 4 different accounts generates 4X amount of free play. However, if you played the total of $40,000 coin in on one single account, you would not generate the same 4X amount of free play, it might generate 2x. The increase amount of coin-in is not proportional to the same increase in free play generated. So you have to find the sweet spot...identifying what amount of coin in generates the most free play proportionally.

I just don’t get this. Are you saying you never have out of pocket costs to play the machines.

Nope, not saying this at all. Initial coin in and the expected loss if playing a slightly -EV machine is out of pocket. But the free play generated, more than offsets that expense. That's what makes the who exercise +EV. Well on the surface that is what makes the whole exercise +EV. There is hidden extra +EV in contest and drawing entrees. Since I have been in Vegas, I (we) have won multiple contests and drawing of 5 figures which were generated by our initial coin-in. I won a vehicle, 12 months of mortgage payments (before I paid off my mortgage) and a $10,000 cash win on a football contest in which the entrance into was a result of play, plus numerous other smaller amounts.

Without adding it all up, I am going to guestimate 25-30% of total profits from this exercise have come via the "hidden +EV" of contest and drawing wins. And I have no idea how to figure odds and chances on that kind of thing. Dancer discusses some of that, figuring out chances of winning contests and drawing. That is way above my mathematical level. It's just extra "hidden" EV to me.

Why would it matter if you generate tax forms or not? Don’t you report all your winnings anyhow?

This feels like a trap, blackhole. You trying to get me to admit to something? I do report my winnings and pay my taxes. While I actually feel good about paying my FAIR share, I'll be damned if I want to pay more than my share.

No offense, but when Alan and kewlJ agree on something, it must be wrong. I think you guys are underestimating the resilience of degenerate gamblers, who simply don't care about tax consequences.

I think you may be underestimating degenerate gamblers if you think they won't care about losing money and then paying taxes on those losses. Double whammy!

In my final years of playing AC, I witnessed a similar phenomenon, not by the government concerning taxes, but by the casino industry itself, when they lowered paytables and pay rates on machines a decade ago. The thinking was gamblers wouldn't notice or care. They would keep coming. But the gamblers did notice and they did care. They noticed that their money wasn't going as far as it used to. They lost their fun money in half the time. And they almost never had those winning trips that they occasionally used to have.

Back then, I rode the train back and forth to AC from Phila, and that train was filled with casino patrons (and casino workers). It was initially dubbed the casino express. And I hear many of the recreational older retiree gambler types....the little old ladies that visited AC for an overnight stay, once a month, express the exact sentiment that I just stated. They didn't know squat about paytables or smaller returns. What they knew is their money went faster and they rarely won anymore. And within a short time, AC revenues went on a decade long decline. Of course there was other factors at that time as neighboring states were getting casino gambling, where AC used to have the entire market, but a big part of it was at least some of the customer base realizing and objecting to the fact that they weren't getting the same return (and fun) that they used to. Don't underestimate the gamblers. They are not completely stupid.

[Alan Mendelson]

How does one person get multiple account numbers kewlj? Or is that an AP trick that you can't reveal?

[kewlJ]

How does one person get multiple account numbers kewlj? Or is that an AP trick that you can't reveal?

I am afraid it is. Several AP's including one on this very site, get rather upset, every time I mention multiple accounts.

There are 'tricks' to acquiring multiple players cards, which I won't reveal, but in my case, I sort of lucked into it. When I moved to Pennsylvania from Florida at age 18 and got my PA state ID, the clerk incorrectly recorded my birth date and year. This was several years before I had heard of or had any interest in blackjack play, so it was not some sort of pre-planning. At the time the big benefit was that I could legally drink a year earlier, because it was a real ID, not a fake ID.

Several years later, when I became interested in blackjack, I started playing just a few months before my 21st birthday. And when I maintained both ID's with different DoB, through another relocation to Vegas, I was able to get multiple accounts. DoB is a 'key' piece of info in used to link accounts. Many players have multiple mailing addresses, few have multiple DoB's.

And now, I will get a nasty PM from one of our members. So to that member, I will say, I only revealed my unique circumstances (which in itself probably isn't a good idea), not any secrets for acquiring multiple accounts.

[bocce ball]

Don't underestimate the gamblers. They are not completely stupid.

Fair enough, but I'll give a couple reasons why I don't think this would be apocalyptic for the casinos. First, existing gambling tax laws are bullshit, so many gamblers are already being hosed on their taxes. This would only be an incremental kick in the pelvic area, although admittedly a big one.

Second, high-limit machines are not a dominant source of profit. Casino make their money by racking up pennies. That's based on recent Nevada data, showing 43% of slot (machine) win generated at the 1-cent denomination. Another 42% of slot win came from multi-denom machines, which I would guess to be mostly dollars or lower. The popular games probably don't generate a lot of W2Gs.

[Count Room]

The demographic of slots/VP players who generate lots of W2-G's skew to the older side. This not only hurts on the federal tax bill, but also drives up Medicare premiums.
A double whammy for the casinos' best age group.
Even if implemented, I don't see removal of itemized gambling losses being able to stand the withering opposition from casino lobbbyists for long.

[bocce ball]

Even if implemented, I don't see removal of itemized gambling losses being able to stand the withering opposition from casino lobbbyists for long.

Possible, but I wonder how that would go. Would legislators simply restore the deduction? That would be too logical. Could they possibly grant some other concession to make up for the harmful impact?

I don't know what's realistic, but I'm thinking of either raising the W2G threshold (currently $1200 for slots), or allowing gamblers to net losses against winnings -- similar to how investment sales are treated. The latter would be a huge improvement.

[AxelWolf]

How does one person get multiple account numbers kewlj? Or is that an AP trick that you can't reveal?

I am afraid it is. Several AP's including one on this very site, get rather upset, every time I mention multiple accounts.

There are 'tricks' to acquiring multiple players cards, which I won't reveal, but in my case, I sort of lucked into it. When I moved to Pennsylvania from Florida at age 18 and got my PA state ID, the clerk incorrectly recorded my birth date and year. This was several years before I had heard of or had any interest in blackjack play, so it was not some sort of pre-planning. At the time the big benefit was that I could legally drink a year earlier, because it was a real ID, not a fake ID.

Several years later, when I became interested in blackjack, I started playing just a few months before my 21st birthday. And when I maintained both ID's with different DoB, through another relocation to Vegas, I was able to get multiple accounts. DoB is a 'key' piece of info in used to link accounts. Many players have multiple mailing addresses, few have multiple DoB's.

And now, I will get a nasty PM from one of our members. So to that member, I will say, I only revealed my unique circumstances (which in itself probably isn't a good idea), not any secrets for acquiring multiple accounts.

Putting ideas in other peoples heads is the problem. If its a newbie to the AP game then there's a chance they will do something and fuck it up. Do you know how many idiots there are out there trying to AP? For instance, let say I post up on the forum there are $50 match plays at the Palms that they are putting in flyers at the gas station across the street. Now, you have some idiot who grabs a stack and starts walking around the casino flashing them around. I have seen good plays where there are a bunch of people(unknowledgeable "AP's")sitting there with a pen and paper writing everything down while they play. The casino is going to take notice to that and then start looking at the people playing in the same vicinity. There are many more situations where hustlers are doing really dumb shit in the casinos.

People give out AP information online for a few different reasons. IT'S NEVER MOTIVATED BY WANTING TO HELP THE AP COMMUNITY. One may claim that's why they do it, but I call BS. It's mostly motivated by ego, wanting to be praised or some other agenda, like writing books or some other for-profit shit.

Generally, the information given by other AP's on the forums is not that great, or its something they have no interest in. Talk about your must hits, UX, vulture stiff, 2 x point multipliers or whatever all you want(others may not agree). You got guys who understand some AP but they are not AP's they just like talking about it.

I have seen some cases where someone posts about a promo not thinking there is any real value, but they actually missed something significant(they may be one or two trick ponies), so they unknowingly fucked up. One of the more notorious public cases of that was at the Plaza. They Shut down the $5's. No one talked about the other stuff and guess what? It lasted.

Why put it out there publicly and take a chance tipping off Darksiders(Darksiders learn most of their shit from other AP's), idiots and the casinos? Remeber the Revel 100k loss rebate? We have someone who admitted calling the fucking casino about it. Down went the $25 VP and the heat was on higher limit slots as well.

If you want to help other AP's, just PM them and ask them to let their AP friends know and keep the information to the AP community. Or You could make a post saying, I have something interesting if anyone is interested PM me. If someone PM's you who you don't know/like/trust, you can just tell them to suck your dick.

[pkspins]

Even if implemented, I don't see removal of itemized gambling losses being able to stand the withering opposition from casino lobbbyists for long.

I can't see it remaining as is when so many other itemized deductions are being eliminated.
What I am hoping for is that the compromise to keep those lobbyists happy is to have only net gambling winnings hit the 1040. I think a Schedule would make a lot of sense, similar to what we already have with Schedule C for business expenses. All the wins and all the losses on one form, then the net is what hits the 1040 income calculation.
It would eliminate the artificial inflation of income totals that we currently have that hurt seniors, like you mention, as well as others who end up with grossly inflated AGIs just because they happen to gamble for a hobby.

[alpax]

Pechanga has $5 games that pay $1195 on some quads. That's a big hit and one of the reasons I stopped playing there.

In order to combat misinformation, I have not seen 47.8 for 1 quads on the $5 games. The people who play Double Double Bonus and Triple Double Bonus at $5 get $1250+ for every quad they hit.

In regards to the original topic, that proposed tax change is devistating to both the players and the casino if it passes. The money used to play at the casinos should be tax deductable/write-off if the IRS wants to be able to tax gross winnings.

[Alan Mendelson]

Pechanga has $5 games that pay $1195 on some quads. That's a big hit and one of the reasons I stopped playing there.

In order to combat misinformation, I have not seen 47.8 for 1 quads on the $5 games. The people who play Double Double Bonus and Triple Double Bonus at $5 get $1250+ for every quad they hit.

In regards to the original topic, that proposed tax change is devistating to both the players and the casino if it passes. The money used to play at the casinos should be tax deductable/write-off if the IRS wants to be able to tax gross winnings.

I'm glad they changed it. But as of two years ago those VP machines were all over the main floor. I even talked about them on this forum.