Swain Scheps - Casino Gambling For Dummies

One reason some of the best professional gamblers win is they don’t chase their losses. As a matter of fact, the best pros win, not because they’re lucky, but because they have a long-term perspective on their gambling. Annie Duke is one of the world’s most accomplished poker players. Her philosophy is to not fixate on individual sessions or daily results. Over time, all players get dealt the same cards. The important difference is how skillfully they play those cards. Maintaining a proper emotional attitude and composure, even when you’re losing, ultimately spells success.

Part of the casino experience is enjoying the festive atmosphere, bright lights, and free drinks. But enjoying and exceeding are two different events, and the quickest way to short-circuit your budget is to overindulge at the bar.

Overindulging is tempting, of course, with cocktail servers adeptly appearing just when the game gets tense, graciously slipping a fresh cold drink next to your elbow. As you sweat a little more, the next drink goes down more quickly. And before you know it, you’ve lost count of how many drinks you’ve had, not to mention how much money you’ve lost.

Monitor your drinking as closely as you manage your budget. If your game of choice requires strategy, then you play better with a clear head. And even if the game doesn’t require player expertise, every game in a casino demands as many synapses as possible for the purpose of bankroll management, so you’re still better off without the excessive alcohol muddying your thought process.

And here’s a truly shocking insider secret: Cocktail waitresses serve nonalcoholic beverages, too. In fact, they often carry excess supplies of bottled waters on their carefully balanced trays just in case. Take advantage of that and mix some H 20 into your diet at least every third drink. It will slow your alcohol intake and reduce the blast radius of your hangover.

Exceeding your established gambling budget by a few hundred dollars on a trip to Vegas or your nearby riverboat casino is one matter. Getting yourself tens of thousands of dollars in debt over time is another matter entirely; this sort of trouble is a serious gambling problem. Gambling addiction is a complex problem far beyond the scope of this book, not to mention this chapter. But I’d be irresponsible not to address it in a chapter about managing your gambling money.

Gambling debts almost ruined Edgar Allan Poe and Thomas Jefferson and have devastated many families. Whether you’re a beginning gambler, an occasional gambler, or a regular bettor, you need to know the signs of gambling addiction. Here’s a helpful set of questions that might give you some insight:

Is gambling your only recreational activity?

Do you often exceed your gambling budget for a given time period (for example, a month or a pay period)?

Do you often spend time thinking of ways to acquire money to gamble with?

Have you ever lied to someone important to you (spouse, parent, sibling, child, boss, or Starbucks barista) about how much you gamble?

Has gambling ever caused problems with your family members or friends? To be specific: Has gambling ever been the reason a person who was once close to you has cut ties with you or avoids you?

Has gambling ever interrupted or caused problems in your professional or academic life?

Have you ever felt the need to bet increasing amounts of money relative to your income to maintain a set “level of excitement”?

Have you ever taken a long-term loan with the express purpose of using that money to gamble?

Have you ever written a bad check or stolen money to gamble?

Has gambling ever caused you to be late on payments of your primary bills (mortgage, car, or health insurance)?

When you aren’t gambling, do you feel restless or irritable?

Have you ever tried and failed to stop, cut down, or control your gambling hobby?

Do you ever gamble to relieve feelings of guilt, anxiety, helplessness, or depression?

If your answer is YES to more than two of those, you just might be a person — one of many — who is vulnerable to gambling’s dangerous charms. Check out Appendix B for more resources that can help you with gambling addiction.

Hopefully, you remember the old saying: Only two things are certain in life — death and taxes. In casinos, two outcomes are also inevitable. First, the house always wins in the long run. Second, when gamblers somehow turn the tables and get lucky in the short run, Uncle Sam wins too.

You may wonder how the federal government actually gets its share. This section covers all the important tax-related issues of gambling and helps you keep complete records, so you aren’t scratching your head when tax day comes around.

First problem: Classifying taxes on gambling winnings is a complex subject. Another problem: The tax code often changes from year to year. So, if you’re a regular gambler, consulting with your CPA or accountant each year is critical. I’m not a tax advisor (and don’t play one on TV).

One general principle is pretty much etched in stone: The IRS views gambling winnings as income. If you win at the casino, get a prize in a sweepstakes, or a bet on a horse race, it doesn’t matter. The amount you won minus the amount of your wager is considered income. And income means income taxes. So, don’t assume that your gambling income is somehow tax-free. In fact, gambling income is taxed like any other source of ordinary income.

Under certain conditions, the casino will do you the favor of paying some of your income tax in advance, regardless of whether you like it. If you win a poker tournament and the prize is $5,000 more than the entry fee, $1,200 at a slot machine, or $1,500 at keno, the casino will report it to the IRS using a form W-2G (guess what the G stands for…). Additionally, if you win a progressive bet of at least $600 where the winning amount was 300 times greater than the bet (for example, a 1,000 to 1 payoff from a royal flush on the six-card bonus bet on a three-card poker hand), the casino gives you 76% of your prize and sends 24% to the IRS.

Does that mean you pay 24% tax on that win? No. Like the tax withholding on your paycheck, 24% is the share of winnings that gets withheld or sent to the IRS as a down payment on your annual income tax. If you have ever had a job that paid out a bonus, you’ll be familiar with automatic withholding requirements. What you actually owe is something you calculate at tax time.

So if you do your tax return and find your marginal tax rate is lower than 24%, the IRS will return some of those dollars back to you that the casino sent them earlier in the year. It’s also possible you’ve made so much money that your marginal tax rate is higher than 24%. That’s after exemptions, deductions, write-offs, and other accounting techniques to lower your taxes. If your marginal tax rate is more than 24%, Te Salute, Don Corleone . Just keep in mind that, unlike your paycheck, where you choose (roughly) how much is withheld, the casino has no choice in the matter. They are legally obligated to send 24% to the IRS. The government will kindly hold on to your dough until you prove you deserve some of it back next April.