12/2/2004
Brad and I counted comps in our gambling win/loss figures when we first started playing in casinos more than 20 years ago, and many casual recreational gamblers may want to do it too. And if you’ve planned to take money out of your pocket in the same amount for the rooms, food, shows, and other non-cash perks you get comped, it’s quite correct to count them in your total return. I know many gamblers who stay in the big Strip resorts where the best games, even with cashback, still don’t quite come to 100%. But with all the non-cash perks and comps, they’re playing well over 100%.
However, you must be careful in your calculations here. We didn’t count comps in our total return for very long, because we were soon getting so many comps that we were increasing the number of our casino vacations and the luxury of our casino lifestyle to a level that we could never have afforded on our own budget. So we started counting comps as “gravy” and chose playing opportunities that were over 100% in CASH return.
If you want to count comps, you must figure the average amount, like I showed you last week, that you’ll lose over the long term by playing at a percentage below 100% in actual cash return. If you can’t afford that loss, you can’t “afford” all those luxury freebies – it’s that simple.
We’re careful to value our comps conservatively. Back when we were staying in casino-hotels, we could get a decent room for less than $50 most of the time. So when we got a comp for a more luxurious room that usually went for $100, we still only counted it as $50 in money value. (The higher psychological value was just a nice extra.) We’ve always eaten simply and have never been impressed by high-priced restaurants, so we always valued our gourmet meals at what we would ordinarily spend when we ate out. If gourmet is a real pleasure for you, then of course, you may want to value it at the actual price, especially if you’re going to spend your money on this anyway if you don’t get it comped. Figuring the value of comps is a very personal matter and depends on what you consider important.
The popular freebies that many casinos are now giving are merchandise certificates or shopping sprees. This is a nice comp that we enjoy, but again, we’re conservative in how we value it. If I earn a certificate I can spend at Target or Home Depot or a local outlet mall, I can count it at full value. I’ll be using it for things I’d buy anyway and I can even increase its value by shopping during sales. On the other hand, if it has to be used at an expensive store where I never shop, i.e., Saks Fifth Avenue or at a specific Caesars Forum shop on one specific day, I often won’t even play for this offer, because it isn’t valuable to us.
If I get something like this anyway, like a $1,000 shopping spree based on extra points we’ve been earning all year in our regular play, I, of course, don’t turn down this freebie. But I often value it at a fraction of the stated value. Recently, we had a $1,200 offer for Hugo Boss. Brad now has a very expensive sport coat and three nice shirts, but I valued it at only $600, since I’m sure I could have found the same items – and just as nice – for that amount. Having a famous name sewed into clothing is worth very little to us!
And of course, I’ll need to wind up this discussion about “free stuff” with a warning. Learn the system so that you get all the comps you’ve earned, but be careful of playing more than you had planned just to get a comp. This is a dangerous path. The siren call of comps can lead you to the jagged rocks that will destroy your gambling bankroll and/or your enjoyment of the casino atmosphere!
12/9/2004
This week I have a guest columnist. Though he prefers to remain anonymous, he’s a good friend of mine who has, in my opinion, something very important to say to all casino visitors, whether they’re high rollers or low, whether they gamble once in a while or all the time.
Playing Nice
We’re all different. Makes life interesting, right? How boring it would be if we were all the same. This Frugal Fridays guest column is about how different people react differently toward casinos and their personnel.
In the seven years I’ve been gambling in Las Vegas almost every day, I have always thought of the casinos, meaning the employees I interact with, as my friends. I try to be nice to everyone, even on days when I’m losing horribly at video poker. Sometimes I do get a bit cranky, but if I let it show, I try to explain to the person that it’s because I’m having a bad day on the machine, not because of anything they’ve done. Casino employees understand this quite well! They spend eight hours each day mostly dealing with gamblers who are losing their hard-earned money. For the most part, this doesn’t put people in the best of moods. But it’s good to remember that the casino folks on the floor are rooting for you to WIN–they’re much more likely to receive bigger tips from gamblers who are winning and tips are a large portion of their income.
There are many types of casino gamblers. Very few are knowledgeable about gambling and even fewer will end up winners over their lifetime of play. Many (most?) believe that gambling is all luck and are forever asking themselves why they’re so darn unlucky. Makes them MAD — at least some of them. And they sometimes take it out on the casino personnel — slot floor people, slot club attendants, cocktail waitresses — anyone they interact with can be subject to their wrath. Even smart gamblers can react badly to losing and may see the casino as the enemy.
This adversarial attitude is actually a self-fulfilling prophecy. Casino personnel can tell when you don’t like them, and the natural reaction is to treat you in a similar fashion. This cannot be a good thing in a casino, or anywhere else for that matter. On the other hand, making an effort to be friendly fosters the same reactions in return. This is a good thing in a casino, or anywhere else.
I’m acquainted with hundreds of people who gamble in casinos on a regular basis. Those who feel the casino is their enemy, in general, are not content with the gambling experience, win or lose. They’re suspicious, cynical, nervous, and angry much of the time. They tend to blame casino personnel and management for any losses they might incur. They’re distrusting of the honesty of machines and dealers, despite the massive numbers of rules, regulations, and laws that govern the casino business. Given the always-present human element, it IS likely that there are a few transgressions on the part of a very small minority of casinos, usually by a very few unscrupulous individuals without the knowledge of upper management. However, on the whole, gambling in a major Las Vegas casino
will NOT get you cheated. If you lose, as most gamblers usually do, it’s because the casino has a mathematical advantage on almost every wager you make. Even if you’re one of the few “”advantage players”” who only play games at which you have a small edge, you lose more sessions than you win.
You must accept this, deal with it, have the bankroll to withstand losing streaks, and not blame the casino or its personnel. It’s not their fault, so suck it up and be nice. Take my word for it, you’ll be happier, more relaxed, more content, and better treated at all of your favorite casinos — well worth the effort!
12/17/2004
End of the Year Miscellany
It’s getting to the end of the year and I want to clean out my overloaded files, so here is a mishmash of short subjects I’ve wanted to talk about.
Five Play Multi-Strike Poker — You thought regular Multi-Strike was fun –and frustrating. Now you can have 5 times the fun — and 5 times the frustration! Multi-Strike has become our favorite game, but it’s not for the weak-hearted or the underfunded. Full coin at the quarter level has you betting $25 a hand! The problem is that few places have even decent pay schedules, especially in low denomination (like 1 and 2 cents, which will fit more players’ bankrolls). I think this is a mistake on the casinos’ part, since it requires a very different and complex strategy that few people will bother to learn, so even with the best of schedules, their hold would still be high. With bad paytables, players will go broke so quickly they’ll eschew this game, even though they love to play it. Go to www.5pms.com to practice without having to risk any money.
Holiday Shopping Sprees — Many casinos, especially on the Vegas Strip, have a players club program that lets you accumulate points all year long in a separate bank from your regular slot club points. You can use these special points to buy all kinds of merchandise during specific days near the holiday season. The Venetian calls them Grazie points, which you can start earning on January 1 and redeem during one week next November. The MGM Mirage properties have jumped the gun and already announced the details of their Holiday Gift Shoppe program for next year. You could have already started earning points Dec. 1 and the redemption time is November 27 through December 4, 2005. This is where planning ahead is essential, since you can only redeem these points in person. I’ve known players who have given up thousands of dollars they could have redeemed in valuable merchandise, because they couldn’t get back to the casinos during the specified time. My grandchildren think Santa lives in a casino — and these holiday shopping programs are a big reason for their belief!
Room Comps — Room comps at the Palms will not be easier to get until their new tower is finished. They can easily fill up the rooms they have now with paying customers and comped rooms for “”whales”” — or at least extremely high-level players.
It pays to look at comps from a casino’s point of view — a profit-making business. Business is so good in Vegas that I’m not surprised room comps are getting harder to obtain. Medium-level players (let’s say $1 play) and especially lower-limit quarter players (unless you have 2 people playing quarters 8 hours a day) will have to go down a tier or two on the luxury scale to get room comps easier. Remember what I’ve always said: You’re recognized and rewarded more if you are a big frog in a little pond!
Casino Mail Offers — Here’s a reverse tactic that sometimes works to get better offers from a casino whose mailings to you have slowly decreased in number and quality, although you play there often. Stop playing at that casino for a while and you might be surprised at the strong offers you start getting again. Some casinos figure if you come to their casino often, you might come anyway, even without offers. Putting the casino in “”time out”” might wake up their marketing computers!!!!!
12/25/2004
As you read this, we’ll be winging our way to Columbus, Georgia, to spend the holidays with the Frugal Princess and her family. Some of you have asked for a report on what they’re doing these days. They’re happily settled in their first home-of-their-own after living in military housing for ten years. Steve is an instructor at the Army Ranger School at Fort Benning and hopes to finish out the 5-7 years until he retires at this post. He feels “”old”” at 35 as he trains young soldiers to be Rangers — and he was worried that he wouldn’t be able to keep up the rigorous pace as he could when he was a younger devil-may-care Ranger. But after some weeks of aches and pain as he built himself back up, he passed the physical and is now leaping over hurdles, slugging through swamps, and jumping out of airplanes with the youngest of them.
I still feel guilty, especially when I watch the news and they report on the casualties in Iraq, that I’m so happy Steve’s present assignment means he’s non-deployable overseas, probably at least for three years. However, he already served one assignment under fire in Iraq, and for ten years has been away from his family for many months on end in many other trouble spots around the world. So I guess I shouldn’t feel guilty, but proud that he has an important mission to train younger soldiers to take his place.
Angela continues to do volunteer work while going to business school to learn some new skills and brush up on some old ones. She likes to volunteer in Army family-support programs and in the kids’ schools, as she has done for 10 years, but she says it’s time for her to get a paycheck! Time will tell if she can actually find time for a “”real”” job, since she’s the ultimate car-pooling soccer mom, carting a van-load of kids here and there every day between two different schools and to various extra-curricular activities.
Kaitlynn, 10, is in 5th grade, and is an industrious A student and soccer player. Zachary, 11, in 6th grade, goes to a magnet middle school for kids who show talent in the sciences. He’s a natural ham and has taken to the stage and acts in plays put on by the Columbus community little theater.
As long as I am making this a rather personal column, I would like to assure everyone that Brad and I are both in good health — so many have kindly asked about this. Brad’s medication seems to be keeping his atrial fibrillation in check and any other heart problems from developing. Apparently, the two stents in his formerly blocked artery are successfully continuing to keep it open. The medication does slow him down a bit, but he’s a professional nap-taker, so frequent rest periods allow him to keep a fairly busy schedule the rest of the time.
Doctors don’t know why I had the false-alarm “”heart attack,”” but when someone has fibromyalgia, as I’ve had for my whole adult life, you get a lot of different aches and pains that are extremely hard to diagnose and practically impossible to treat. So I have mostly learned to just ignore them and they eventually go away! I’m feeling great at the present time, the proof of which is that I’m madly working to finish writing another book, which I vowed I wouldn’t ever do!
I would like to end up this column by sending holiday greetings to all our friends and readers. May this season of joy find you all enjoying good health and happy times with family and friends.
And is there no chance for peace in this world????
12/30/2004
Gambling Records
Actually, most of you probably won’t be reading this on December 31st — you’ll be busy planning and attending, then recovering from, New Year’s Eve celebrations. But when the brain fog and/or body exhaustion passes, you might be reading it at a time when you’re thinking about New Year’s resolutions. Are you determined to get more exercise? Do you plan to go back on that diet and stick with it for more than five days? Are you going to try to quit yelling at your kids so much? Are you going to call your mother more often?
What about gambling resolutions? Are you resolving to cut down playing the games you know have a big house edge and choose those with better odds? Are you going to stick with the gambling budget you and your spouse agreed on and not hit the ATM machine when your session or trip bankroll is gone? Will you spend less time in the casino and more time on volunteer work?
Everyone has his or her own personal goals and resolutions and no one should judge the motives or actions of another. But I’d like to suggest a single one-size-fits-all resolution. Every person who gambles, whether a little or a lot, should keep a gambling diary. And now is the time to start.
The IRS is becoming more and more interested in gambling income as new casinos pop up all over the country, more people are gambling than ever before, and the numbers just continue to grow. Sin taxes are always a popular source of government income, both on the state and the federal levels, and the Criminal Investigative Division (CID) of the IRS is beginning to investigate gamblers more thoroughly, looking for people who willfully, with intent, try to defraud the IRS by underreporting income or overstating losses and deductions. And they like to jump at the chance to leverage the publicity that they get by making an example out of a gambler who’s not properly reporting his gambling income.
As Marissa and I discuss in Tax Help for the Frugal Gambler, the casual recreational gambler almost always ends up the year with a net gambling loss. However, the IRS has chosen to forbid gamblers from reporting NET losses, but requires they list their winning and losing sessions SEPARATELY, the winning ones as gross income. The losing ones can be deducted as gross losses (up to the amount of the win, not more), but only if you itemize on Schedule A. Some kind of a log or diary will help you keep track of this information so it fits the IRS requirements.
The probability of a small gambler being audited about their winnings and losses is small, but there is one thing every gambler can do to be prepared in case this happens: keep a diary. Marissa and I discuss this subject at length in the Tax Help book, explaining why win/loss statements from casinos are good supplementary documents, but definitely don’t substitute for a diary or log. We discuss what a session is and show samples of diaries and talk about the information they might contain.
Some of you who have been heavy gamblers have had to deal with this issue for years and know that you must keep detailed records. But many of you are starting to gamble more, get W-2Gs, and expect your accountant to take care of this bother at the end of the year. The problem is that many accountants haven’t had experience with gambling income and don’t know the accurate way to report it. And the end of the year is too late to go back and remember all the details. Start a log or diary NOW for 2005. You don’t have to send it to the IRS with your return, but it’s something helpful for your accountant when he/she does your return — and it’s absolutely necessary in case of a future audit.
If you (or your accountant) are not knowledgeable about the reporting of gambling proceeds, you can order Tax Help for the Frugal Gambler at www.greatstuff4gamblers.com or www.frugalgambler.biz.