1/2/2004
Happy New Year, everyone!
Now that the late-December festivities are behind us, it’s time to turn our thoughts to all our plans for the new year — such as filing our 2003 tax returns! As Emeril would say, Oh yeah, babe! This can be a head-scratching event for all taxpayers, but especially for gamblers; the taxing of gambling is a confounding subject.
But there’s help on the horizon. A new report called Tax Help for the Frugal Gambler, authored by myself and Marissa Chien (my tax advisor), lays out the whole program in black and white (or with as little “”gray matter”” as is possible when it comes to this stuff).
This report covers all the subjects that face gamblers when they think about their tax situation: What about those W2G’s when you hit a big jackpot? What gambling records do you need to keep? What is a gaming diary? Are you paying more taxes on your gambling wins than you need to?
It gives a multitude of details that make taxes a little less taxing for both the casual recreational gambler as well as the gambling professional. Sample filled-out tax forms and IRS regulations are included in the Appendix.
Here’s the Table of Contents with a few annotations, so you know exactly what’s in it.
FOREWORD
How this book started out as a chapter for More Frugal Gambling and expanded into a book of its own — and how Marissa, my tax preparer/financial advisor and a qualified Enrolled Agent and gambler herself, came on board to add more help on those complex tax issues gamblers face.
PART 1 — Federal Taxes
CHAPTER 1 — Introduction: Why You Need Good Tax Information
CHAPTER 2 — The Basics
Gambling Wins as Income
The Gambling Session
Player Record-Keeping — the Gaming Diary (samples included)
Casino Record-Keeping — Win/Loss Statements
CHAPTER 3 — Special Circumstances
Casino Comps and Gifts
Casino Tournaments
Casino Drawings
Live Poker Play
CHAPTER 4 — Filing Your Tax Return
The Recreational Gambler
The Professional Gambler
Gambling Groups
CHAPTER 5 — Government Issues
The W2-G
Other Government Records
Withholding Rules
PART II — State Taxes, Including a Chart with Information for all 50 States
SUMMARY
WHO’S WHO IN THE TAX BUSINESS
WEB SITES
APPENDIX — Contains government regulations, court cases, and sample filled-out tax returns for various kinds of filers.
Tax Help for the Frugal Gambler will be available soon and you can order from Huntington Press by calling 800/244-2224 or going to www.greatstuff4gamblers.com.
1/8/2004
Hey, for all you readers in cyberland who think I’m frugal, here’s a guy who can run “frugal circles” around me!
Michael Bluejay is the Webmaster for Michael Shackleford’s www.wizardofodds.com gambling Web site and he’s an authority on staying in Vegas on a very limited budget, usually in the ultra-rock-bottom lodging options downtown. (He also has a Web site of his own, at www.bicyclesafe.com, which promotes bicycle safety.)
The following is reprinted (slightly edited) with permission from Michael Shackleford, author of Huntington Press’ upcoming Gambling 102, a book that lists the odds on all the casino gambling games and includes a brief description on how to play them.
Cheapest Stays in Vegas
by Michael Bluejay, Professional Cheapskate
I’m the expert on the absolute cheapest places to stay when you’re in Las Vegas. Jean Scott has nothing on me; I can frugal circles around her. Here are my top (or bottom) three.
Las Vegas Backpackers Hostel, $0-13, 1208 Las Vegas Blvd. S., 702/385-9955; www.usahostels.com/vegas/v-index.html.
Hostels are usually supposed to be just for international travelers, but LVBH sometimes takes Yanks — especially in the slower seasons, like winter. Last time I was there, the rate was $13/night. The catch is that you share your room with up to three other people. But if you can deal with that, you won’t find cheaper.
If you’re going to be in Vegas for at least a couple of weeks, you might be able to get a gig at the hostel cleaning rooms or doing other jobs — and then you get to stay for free. I did this, but it was about three hours a day, seven days a week — or 21 hours for a $91 bed, not the greatest deal in the world. Still, it was an interesting experience. Plus, one of my co-workers was an interesting Belgian guy named Ronald, another cool roommate was Todd (a waiter at the Venetian), and there were a bunch of strippers who stayed there because even though they could afford to stay in a hotel, they preferred to stay somewhere where there was some semblance of community.
The Western, $22, 899 Fremont St., 800/634-6703
The Western is my favorite casino in the whole world. Why? Because it’s cheap! And it’s dangerous! You can’t have one without the other. And you’ve got to expect it, especially when you have $1 blackjack and quarter roulette in a stinky building with blazing fluorescent lighting in the middle of a crack neighborhood. Two guys tailed me out of there when I left one night, probably trying to nab the $67 they saw me win. Fortunately, I noticed them and got back into a public area before anything bad happened.
So let’s talk rooms: The Western used to offer rooms for $16 a night, any night, even weekends. I took advantage of this in 2001. No place can be so dangerous that I wouldn’t take advantage of its $16 rooms. Unfortunately, the rate recently went up to $22.
So what kind of a room do you get for $22? Better than you might expect. My room was fairly clean and functional. It was a nice quite place to sleep, which was all I wanted. Now, the safety of getting to and from your room is another story.
The Gold Spike, $25-30, 400 E. Ogden, 800/634-6703
If dangerous thrills aren’t your idea of a good time, you might like the Western’s sister casino, the Gold Spike. The rooms here are pricier — $25 on week nights and $30 on the weekends — but what do you expect in exchange for not having to politely decline the opportunity to buy large quantities of narcotics as you walk to your hotel? I don’t like this place as much, because the casino is a lot smaller, it’s dimly lit (compared to the Western’s blazing fluorescents), and it’s not as dangerous.
1/15/2004
Here is some more back and forth between myself and correspondents about points large and small in More Frugal Gambling.
Reader: Page 54: I’m not sure why straight multiplier slot machines are good for players who want to try for a higher jackpot, since a dollar 1-coin jackpot will be about the same as a quarter 4-coin jackpot. The real reasons I can think of to recommend straight multipliers are: 1) a dollar 1-coin straight multiplier slot likely has a better return than an equivalent 4-coin quarter slot; and 2) some people like to switch between 1, 2, and 3 coins.
JS: I agree with you here — and I would add another reason why someone might want to play dollar rather than quarter machines: A few slot clubs give more points per dollar-amount coin-in on dollar-denomination machines than on quarters, similar to the fact that dollar machines often have a higher payout percentage.
Reader: Page 61: Recommending that people play all the lines puts a lot of money at risk, when they might have just as much fun playing one or a few lines at 1-coin. I like to look for video slots where the bonus is based on a “”scatter”” feature, instead of lining up the bonus symbols on one of the paylines you played. In those games, the bonus happens just as often whether you play 1 coin or 250. Some suggestions for this are Jackpot Party and State Fair.
JS: I recommended playing one coin per line only as an alternative to playing max coins on a few lines, assuming you were going to play the same number of coins either way. The ultimate time-stretcher on any multi-line slot machine is only one coin on one line!
Reader: Page 138: “”Starting with a long winning streak probably cuts down the time [to get to the long run].”” I’m not sure what this means or if it’s correct. Anytime you start off with a result that heavily deviates from EV, it will take a longer time to reach the EV that you thought you had. I’m not really sure what the comment is based on, but it sounds fishy.
JS: Well, I did say “probably,” but maybe this isn’t very clear. I can’t remember what I was thinking yesterday, so who knows what I was thinking when I wrote this years ago — one of the problems of a book written over a long stretch of time! I think I was considering someone who had a small bankroll to begin his video poker play, a bankroll insufficient by math standards to provide the player with a high confidence level that he won’t go broke. If he has a winning streak early, he can build up his bankroll and be more likely to survive the losing streaks that are bound to come in the future, and thus be less likely to go broke before he reached the long-term EV than someone who began with a long losing streak.
However, I do go on to explain the concept, in that same paragraph and the next, perhaps in more accurate math terms: “However, any streak, good or bad, at any time during your lifetime play, will have less impact on your long-term results as it gets ‘lost or ‘diluted,’ becoming a smaller percentage in a growing total of hands that will slowly but surely, although in no pattern that can be predicted, gravitate toward the long-term expected return. Remember that this move works both ways: If you have a very long winning start to your VP playing time, you’ll be gravitating downward toward the EV, not upward as for someone who starts with a losing streak. The end result, however, given enough play, will be the same: You both will be near the EV. This follows the math theorem called the Law of Large Numbers, which in laymen terms for the VP player means that the longer you play, the closer your personal average return will come to the expected theoretical return.”
1/22/2004
More MFG Input from Readers
Last week I started discussing questions or comments I’ve received from readers about things I wrote in More Frugal Gambling. This week I continue the thread. I’ve edited them for length and clarity and I’ve put page numbers for references in the book, when applicable.
Reader: Page 52. You said, “”For an recreational player, it doesn’t really matter if you’re playing a 94% or 96% machine,”” since it would take millions of hands before you could tell the difference. I don’t know if you realize it, but this works right into the argument of many people (even some self-styled “experts”) who say choice of games is unimportant. If you say that a recreational player doesn’t care if he’s playing 94% or 96%, then it wouldn’t matter if they’re playing 9/6 JoB or 9/6 DDB, since, based on their results, they’d never be able to “”notice”” the difference in the return on their game anyway.
JS: First, the quote you gave at the beginning of your comments was from the chapter on slots, and doesn’t apply to video poker. Second, you left out an important word. I said the “occasional” recreational gambler. And, third, I didn’t say he didn’t “care;” I said he couldn’t “tell. “
Reader continues: I tried to think of a good analogy, and this is what I came up with. Imagine that you wanted to sell your used car. You have the choice between two auction Web sites. On either Web site, your car could sell for anything from $5,000 to $15,000, but you know that on one Web site, cars like yours sell for $9,600 on average, and on the other web site, cars like yours sell for $9,400. Now, if you don’t know which Web site is which, you could sell your car on either site, and regardless if it sold for $9,550, $11,000, or $8,500, you’d never know which Web site you used. In fact, you could sell 50 cars and still not know which Web site you’re using with any certainty. But does that mean you wouldn’t care which site you sold your car on? You wouldn’t spend an hour of your time trying to figure out which one was the $9,600 site? Even though you won’t “”notice”” the difference in the results, you’re still getting a better deal – which is worth real money (in this case, $200).
I actually used this concept in real life. Once at Greektown Casino, I was playing late at night when new slot machines were being installed. At some point, a slot tech left his specification sheet lying on one of the seats near me. I took a look at it and it had the actual return for every single one of the machines they were installing. They ranged from 89% to 95%. I made a note of the machine that paid 95%. See, my aunt (yes, the one that was barred from Greektown and was on the front page of the Detroit Free Press) loves to play slot machines, when I’m not lecturing her to play Pick’em. And she always likes to take a shot with $20 before she leaves. So even though I would never play a 95% machine (unless it’s for pennies and has a cool bonus feature), I told her that that’s the best machine for her to play. And sure enough, of all the machines in that bank, when I walked past it, that machine was most likely to have someone waiting to be paid a jackpot. I don’t know that she had that much luck with it, but I hope it helped nonetheless.
JS: Of course, if you have the luck, as you did, of actually finding out the specifications of a slot machine, you would (or should) choose the best one you can find. However, slot machine players, even if they read the average payouts of specific denominations in specific casinos, published in various magazines, do not usually know which one machine is best to play, since there is no way of just looking at a machine and knowing its long-term payback. Slot machines that look exactly alike on the outside can have different chips inside, even within one casino, and certainly from casino to casino.
Video poker is a horse of a different color. In regulated jurisdictions, the schedule given on the machine do
1/30/2004
Jean Scott is taking a few weeks vacation. This week’s Frugal Friday’s contribution comes from Anthony Curtis.
The scheduled lead story in next month’s LVA is “Gambling on TV.” It will cover the boom in gambling on the airwaves. Since I’ve just finished participating in one of these televised gambling events, I thought I’d give you a little sneak preview.
I traveled to the Mohegan Sun in Connecticut to play in the “World Series of Blackjack” for the Game Show Network. Twenty-five players were invited, the majority known names in the gambling world. There were also a few customers of Mohegan Sun in the field to round things out. We played for $250,000 in prize money; $110,000 was the winner’s share. A quarter-million-dollar prize pool split among 25 players means a juicy $10,000-per-person in expected value just for being there, so the big names showed up.
“The World Series of Blackjack” was actually just a blackjack tournament that was played over a two-day span. I can’t tell you who won, or even how I did—sort of like “Survivor,” we have to sign agreements promising not to divulge information prior to air time—but I can tell you the competition was awesome. In fact, out of a total of seven rounds, six of them were absolute tournament classics, with the result often coming down to the final turn of a card on the last hand.
The series of seven shows is scheduled to air beginning on March 15. It will be the first show following the Game Show Network’s highly publicized switch to the name GSN, so they’ll be putting a lot of publicity behind it. I think it has a good chance to do for blackjack tournaments, and blackjack in general, what the World Poker Tour has done for poker. Check it out.