Question of the Day - 16 January 2023

If you set things up properly, you can declare the actual value of the free play, not its face value. Obviously, $30,000 free play isn't worth $30,000, but rather, what you expect to put in your pocket. It's as if the casino awarded you a giant gilded rubber chicken "worth $10,000." It's the market value of the prize that counts, not what the casino says it is.

So there are two ways of valuing a free play prize. One is to multiply the face amount by the return percentage of the machine(s) you play it through to collect; the other is to count whatever you actually receive by doing so. This approach, in fact, could be done in two steps. You get $30,000 free play, and since the machines at the Golden Commode return 90%, you actually won a prize worth $27,000. Then, the difference between that and what you actually collect is a separate reckoning--a profit or loss from the activity of converting the free play to cash (just like selling the rubber chicken on EBay).

I read the answer multiple times, but did it differentiate between tournament Free Play winnings and Free Play you get with an offer? Not so much.  Certainly you don't get paperwork with the offered Free Play.  You just show up for the stay and it is loaded onto your players card.  You play it through, maybe come out ahead as to the amt of FP or not.  I've not kept records of that.  Rarely have received $600 or more in one trip's offer, but in the aggragate over a year, maybe yes.  Not sure I have the latest version of "Tax Help...".  I'll look back.

Years (many) ago they gave cash for tournament wins, even the lowest win maybe $50.  And always a 'free' gift of some sort, mostly useless to me like a ceramic vase.  Have left many behind in the room.  But I digress!  Sorry.

Candy

O2bn hits the nail on the head.  To me there is a difference.  Winning free play in a drawing or tournament is an actual gaming win, so it makes sense that it would be taxable.  On the other hand, earned free play is just a return of a portion of expected losses, not new income.  While winning on that free play would seem to be taxable, I suspect the freeplay itself would not be. Still I would be interested in hearing an expert's opinion.

The free play itself is not taxable.  What you win from the free play is taxable.

Sounds to me like lewis's 'it's simple' 'set things up properly' 'rubber chickens' method frankly sounds like suggesting to people not to pay their fair share of taxes. And with your buddies in the gov needing more income than ever to fund their endless spending. I mean NYC alone trying to fund the illegals needing billions to do it in 5 star hotel stays, why are you suggesting others not pay their fair share of taxes being a fan of big gov yourself? Learning from the orange man after all it sounds like? Oh, the humanity, Lewis Lewis Lewis! Oh, and 'like selling' the 'rubber chicken' on ebay, remember this year anything sold > $600 need to have a cost basis when you get your 1099, even that item that's 43yo one sells that I'm sure you have a receipt on.

I think with the crew in charge bringing on line 87k new income enforcers, ya'll who get free play will have a much better chance of getting a nice audit to straighten you out on the matter, learn that way perhaps. Good times ahead.

I have been on the receiving end of a 1099-MISC.  The casino I go to adds up all your drawing winnings over the year and if it hits the magic number ($600+, I believe) you get a 1099-MISC.  However, in addition to these cash drawings, I 
won a few hundred here and there in free play.  That number was not included in on the 1099.

In 2017 my brother won $750 of free slot play from Hammond Horseshoe. I'm a CPA and I prepare his tax returns.  I just looked at it. It was reported on 1099-MISC as Other Income. As such, he could not be able to deduct gambling winnings from it on Schedule A, Itemized Deductions. That's a Caesars property. Not sure how they do it elsewhere or how any other casino does it.