We threw this timely FAQ over to Jean Scott, since she is co-author of Tax Help for Gamblers and has been noticing a substantial amount of (well-intentioned) misinformation on the gambling forums she frequents; hence, she was happy for the opportunity to put some things straight and clear up the general confusion that seems to be circulating. Take it away, Queen of Comps!
I’m glad you asked this question. I love to help people who are frustrated at tax time, which is the reason why Tax Help for Gamblers was written!
So, here is the bottom line on the issue of casino win/loss statements: Don't worry about them. They are practically worthless! Time and again, the IRS has rejected them as a substitute for contemporary gambling records. They may be good in an audit for proof that you played at a certain casino on a certain day, but not as evidence to support a loss deduction.
Why won’t win/loss statements take the place of your personal gambling diary?
For one thing, in the case of machine play, the statements cover only the time you played with your players-club card inserted. Many people don’t ever use a card (tsk tsk!), or else use it only sporadically. In the case of table play, on each occasion that you played, you’d have needed to give your name to the pit boss and have asked to be rated… We'd hazard a guess that you did neither, and you wouldn't be alone in that.
Furthermore, casino win/loss statements vary greatly in accuracy and completeness, because there’s no standard form for the casino to use. Some forms for machine players are quite detailed, giving the exact time and win/loss figure for each day of the year you played a machine at their casino with your slot club card inserted. Not all casinos have good computer-tracking systems, however, and some properties merely give a total annual win/loss figure. What's more, sometimes this is only an estimate, based on theoretical machine hold, as opposed to your actual wins or losses. Still others may give you your lifetime total [Ed: Yikes!], rather than a report specific to the past year.
Add to this inconsistency the fact that many statements are notoriously inaccurate and incomplete, for example both by excluding hand-pays and/or W-2G jackpots, while simultaneously failing to make that fact known. A few that Brad and I receive do match our own records fairly closely; most, however, seem to bear little relation to the extremely detailed records we keep ourselves.
Bottom line, you can collect win/loss statements from all the casinos where you played if you wish, but don’t waste your time trying to match them to your own records, which is usually a futile exercise. And don’t even think about contacting the casinos to have them "correct" errors – they won’t do it, on the grounds of all sorts of disclaimer language, hiding in the small print at the bottom of the statements.
Not only should you not rely on these statements as accurate, but you should never attach them to your return anyway. Rather than help, they have the potential to give rise to serious problems, particularly in the instance of those that detail coin-in and coin-out figures: The IRS might try to use your gross coin-out as your win figure, which would be a much bigger number than your session total win, hence the need to keep good records.
My advice is by all means to gather up your win/loss statements if you wish, but just file them away. It is very likely you will never need them. The crucial thing is to keep a very detailed log of your gambling activity. That is your main defense weapon in the event of an audit.
