Free Play instead of Cash

Anyone ever hit a W2G jackpot and asked for slot play instead of cash? Is this something the casinos would consider? It seems like a win for everyone. Player might be able to avoid the tax implications and the casino could save money by not necessarily paying out the full amount once the slot play has been run through. This has always crossed my mind but on the few instances I have hit a W2G jackpot I have not asked.

I wouldn't like the idea of being forced to play all of that money back through the machines before cashing out. It would have to be a significant amount (maybe 50%) over the normal cash payout for me to agree to that.

Would the IRS allow this option?

I can not see this being allowed. They would be taking tax money away from the feds.

Terry

I would love the idea if it happened, as an option. I know for a fact, well 99.999 percent sure if I win 2000 it going back in, unless I win a major jack-pot.
The feds should have raised this to 10,000 a long long time ago. Reason 1000 I hate big government.

There appears to be a trend toward awarding Free Play instead of cash in slot tournaments, top jackpot on down. The Free Play is for use only at the sponsoring casino.

Is the Free Play earned at a slot tournament taxable?

Technically, no, but any amount that you convert to cash is. If you win $10,000 for example, run it through a machine and cash out with $9,000, that $9,000 is income that you are supposed to report on your 1040.

Of course, there wouldn't be a W-2g generated on the $9,000, and it would be solely your responsibility to report it.

Sure the casinos would much rather give you Free Play instead of cash that you might leave with.


High Limits at the M a couple years ago... A lady was playing 10-Play $1 VP, hit a RF on a line... asked to have winnings added as credit into the machine. They did some paperwork (likely a W-2G). The Host went to a desk, hit a few key strokes and her machine Credit increased by $4k. And she just kept on playing, was down to about $2k when we left.

Think Tennis-Bum was hitting on her. Dude has darn good taste in women too... hee hee

I don't think it's that easy. The slot tournament and the free play are two different economic activities. One could take the position that this is similar to a "like kind exchange," where, for example, one rental property is exchanged for another. This seems to be your position - only the "boot" counts as income.

However, I doubt, very much, that the IRS would take that position, unless the use of the free play was highly restricted. Consider that the scheme might allow the shifting of income into the next tax year, if the winner was allowed to defer the free play.

If a winner is given the choice between cash and free play, that's a slam dunk for the IRS, black letter, and there would likely be penalties as well.

Are you sure about that? Why would a prize worth 10,000( Free Play) be treated different than another prize worth $10,000( a car). If you win a car, its not cash but you are responsible for taxes on it. I'd be careful about it.