Received an invite to a slot tournament with $50K in casino play as 1st prize. Two questions: (1) would you still have to play the entire $50K in one day? Caesars has done that in the past. And (2) do you have to pay taxes on that $50K? Thanks to anyone offering information on my questions.
Should be in the fine print as to how long you have to play off the winnings (presumably Free Play). If time is short, run to High Limit and go to town! Good Luck. Ps. If winnings are paid in cash (as is often done with the top three big wins), big amounts, I don't know the tax answer but bet yes it will be taxed. Again, should be in the fine print. Just have them take it out on the front end, maybe? Good luck!
Candy
There's a huge gray area regarding tax liability accruing to free play, but the most important facts are:
1. You owe taxes on ALL gambling winnings (not just those that generate a W2-G). From an accounting standpoint, that would be however much actual cash your $50K of free play puts in your pocket.
2. Casinos don't issue W2-Gs for nonmonetary prizes, and technically, free play is nonmonetary. Another reason they don't do that is that $1 of free play is worth less than $1, and they can't even say exactly what it is. So it would be inaccurate to issue a W2-G for the face amount of the free play--or any lower estimate.
3. The fact that a W2-G is or is not issued has no bearing on your ultimate tax liability.
4. The vast majority of gambling winnings go unreported. Enforcement is minimal and sporadic.
As far as requirements to play off the free play in a day or whatever, there are no set rules. One time I won 10K in free play at the Palms and had three days to play it off. I'm sure that CET has its own way of doing things.
One final note, should you ever win such a prize: almost certainly, you would be able to play the free play on video poker as well as slots. The difference between playing 50K through a VP machine and playing it through a high-denom slot is anywhere between $2000 and $5000. Plus, a bad run that leaves you with half of your money--or less--is much less likely on a VP machine.
