Every end of year presents decisions tax-wise. If you have accumulated cash back or free play at casinos and withdraw it, it’s a taxable event and is hence reportable. Many players, possibly most, don’t report such income, but that’s tax evasion — which is a crime. My goal is tax avoidance, which is different.
Usually, my decision comes down to whether I am ahead or behind for the year. While I’ve usually had positive annual results, there have been exceptions. In 2024, for example, I had a seriously-negative year. In December of that year, I emptied most of my slot club accounts. This reduced my loss for the year and since losses aren’t carried over year to year, was a better strategy than if I collected the money from the slot club accounts in a year I was ahead and would have to pay taxes on it.
In 2025, I’m ahead and will not be clearing out accounts before December 31. Because of the new tax law that is going into effect January 1, I’ll be quitting most of my gambling at that time, so my slot club accounts will be cleaned out in January of 2026.
There are some cases, however, where I will not clear out my slot club accounts, because of the idiosyncrasies of the particular slot clubs. Some of my readers have accounts at these exact casinos, but many of you have accounts elsewhere where the same logic might apply.
South Point — When the South Point reduced its slot club from a 0.30% return to 0.15%, I quit playing. All video poker there now has a house advantage. The mailers competent video poker players receive are pretty paltry, so there’s no reason for me to play there anymore.
Telling people that I’ll no longer be playing at South Point (knowing that others might follow my example and also quit playing there) is not easy for me to do. Over the years, I’ve been a very strong advocate for that casino.
Michael Gaughan and the South Point have been very good to my career and to me personally. The South Point was the major sponsor of my Gambling with an Edge podcast, and I taught classes there for many years. When Shirley, out of the blue, decided our marriage was over back in 2012, the South Point gave me a free room there for a few weeks until I got my feet on the ground again. Many competent players have been removed from the South Point slot club, but I was allowed to stay because of my relationship with Michael Gaughan.
But the policies of that casino have changed. The slot club has been cut in half, and many monthly promotions are smaller now than they used to be. While I’ll always be grateful to Michael Gaughan, I won’t be a player there any longer. So why not close my slot club account there?
Because on Mondays, the South Point offers 50% discounts to seniors for food and other things if you use your accumulated points — and for about two weeks before Christmas every year everybody gets the 50% discounts using points. Since spending my points like this isn’t taxable, and I get twice as much in food as I’d get in cash, it makes sense to me not to clear out the account at this time.
Caesars Sports Book — I am not a significant sports bettor, but Caesars Sports Book offers monthly promotions if you have Caesars Seven Stars status. My current Seven Stars status remains in effect until January 2027, so I’ll continue to opt into the monthly promotion until then.
Although the promotion has changed before and can change again at any time, currently it goes like this: If you make a monthly $100 or higher bet using real money (which includes money deposited or earned and not withdrawn), you get a $150 free bet. Free bets do not return as much as regular bets, but they are free and, obviously, I win some of them.
While I generally make my $100 bets at around -200 (meaning I will win approximately 2/3 of them), I lose some of them. My free bets are made on underdogs, so I lose more than half of them. So, it is possible that my overall balance decreases periodically and I’ll need some money in the account so I can continue to make my required $100 monthly bets. I’ll probably leave $500 in it and clean out the rest in January. Over time, though, I’m a huge favorite to win during this promotion.
Four Queens — I have a current comp dollar balance of several thousand dollars. Bonnie and I like to take people to Hugo’s Cellar periodically, so I want to keep that balance active. That means I will continue to play a little at that casino to keep the food comps from expiring. So while I’m “giving up gambling” in the main, there are a few exceptions, like this one.
I will not be receiving meal comps at casinos in 2026 because I’ve stopped playing, so in addition to going to Hugo’s Cellar sometimes, we’ll probably eat at their Magnolia’s coffee shop much more often than we do today. The casino has an accumulated points balance, separate from comp dollars, and we’ll probably zero that in January.
There are other year-end things I will do. Bonnie and I each get five $100 meals at Caesars properties because of our Seven Stars status. We still have some that won’t expire until January 31. We’ll spend those in January — because we have other “free food” until then. It’s possible we’ll get more meals at Caesars next year simply because we’re still Seven Stars. We’ll see.
It’s possible that the new tax law will be reversed sometime in the future — and depending on when that happens, I might start gambling again. I will certainly look at what casinos are offering and make a judgment as to whether I can get up to speed again and how long that will take me.
If this happens in, for example, 2030, I’ll be 83 years old by then and will not have played for five years. It’s fair to assume my skills will have greatly deteriorated in that time period. And who knows if there will be any games worth playing by then?
While presumably I’ll be able to get up to speed again in video poker, if there are any games worth playing, I’ll have to start over again at advantage slots. While I know how to beat several dozen different kinds of slot machines today, new games will continue to be invented and any of the games I know today will likely either be non-existent or perhaps “everybody” will know how to play them so my information today will be worthless then.
no information is worthless maybe outdated but not worthless
hope you and Bonnie are doing ok with what you have been thru so take care and have a nice turkey day
I am also stopping gambling. Since it is not my “profession” I cannot deduct some of the things professions gamblers can. The only write offs I have are gambling losses to write off against wins, up to the total wins. Now that the write off limit is 90% of winnings, I have to pay taxes on the 10%, which, as I have been very blessed in my life, is a higher tax bracket. Between the lowering of odds, increased house holds, tight machines and stupidly bad VP, it has become not worth it. The hobby becomes too expensive. My other hobby, flying, is also done, as I had a heart attack a few weeks ago, and lost my medical. At 72, its not worth trying to get a special issuance medical. Guess the wife and I will do a lot more traveling, but not to casinos. I wonder how much I will miss it?
This new ruling is a pain but I don’t think it is fatal, at least at the rec level. Let’s take an example.
Say I make $100,000 a year on my day job and itemize with $20,000 in deductions. So, my AGI would be $80,000. My tax burden ( married filing jointly) would be 0% on the first $23,200, and 12% on the remainder. So I would pay $9216 in federal tax.
Now, say I have $25,000 in W2Gs and break even for the year. So, I can deduct $22,500 against winnings and have an extra $2500 in taxable income. I would still be in the 12% tax rate for that extra income so it would cost me $300 in federal tax.
I am not including state tax considerations or medicare considerations. That means that $25,000 in W2Gs costs me $300 or 1.2%
I don’t consider that to be a huge penalty. Now, the more W2Gs you have the worse it is and there are some other complicating factors . For a lot of gamblers, I don’t think it will be a huge deal.
I like your point but how can you itemize with $20K only in deductions if filing married filing jointly?
I ask this because I’ve been stuck the last 5-7 years without being able to itemize as my mortgage interest is hardly anything as I near paying it off. So, I’ve had to start playing more quarters even the last few years and it has gotten very boring but I’m trying to avoid a W2G.
Jerry, I just threw that out as a number to illustrate the point. What I’m saying is that if you itemize and don’t have a truck load of W2s, the penalty isn’t that severe.
If you are a pro, with $1,000,000 in W2s, that is an entirely different story.
Got it.
Remember that in 2025 and until 2029 the state and local tax deduction cap goes from $10,000 to $40,000. For people who live in high tax states (like California) they can easily get more in itemized deductions than they had in the past. With the average house in California at $750k you could have easily hit the old $10k cap on property taxes alone.
For a very long time, I have looked forward to Bob’s weekly writings, read all of them, and enjoyed all of them. Now that the reporting of gambling wins and gambling deductions has changed, other things have also changed. I don’t know how many of Bob’s readers have ever met him in person, or gambled side-by-side with him on adjacent video poker machines, but I am one of them. I am very affected with his weekly writings now likely gone. I am Bonnie’s age which makes Bob four years younger than I am. But we both are very senior age-wise. But now with gambling changed, and particularly with the likelihood of Bob no longer writing his weekly articles, which were a part of my life, I feel very old. Things are different now, it seems like the end of an era, and I feel very old indeed. And, I confess, a little depressed.
If missing the atmosphere and fun of casino play is regretful, why not develop or rekindle some love for table games? Avoid those with the progressive jackpots that might trigger W2Gs. Detox from the ‘love’ and attention from Hosts, the comps of the higher Tiers. Just have fun, no worries.
Since he hasn’t responded, I will post what I see is his view. For Bob, he only wants to play with an advantage. There is no advantage at table games unless you are a Blackjack card counter, which then creates a whole other set of problems in trying to avoid detection to be able to keep playing beatable games. For him it’s not about love and attention from the hosts.
I’m with Jerry. We’re retired with no mortgage and no deductions. I had a really fun year with multiple W2-Gs that put me ahead for the year. But it’s going to cost me because it makes our Social security taxable, even with President Trump’s extra deduction. I’ll have to pay IL state taxes too. But, as a recreational gambler, I still came out ahead and it was so much fun!
Susan,
Everyone’s tax situation is different. If you don’t itemize, the new 90% rule doesn’t matter.
If you do itemize, and are a rec player, I don’t think the hit will be as bad as you think.
Jerry, I just threw that out as a number to illustrate the point. What I’m saying is that if you itemize and don’t have a truck load of W2s, the penalty isn’t that severe.
If you are a pro, with $1,000,000 in W2s, that is an entirely different story.
Got it. Thanks for the response.
Signs of the end of video poker:
1. Tight pay tables and fewer machines
2. No more video poker classes
3. Bob Dancer switches to slot play
4. Ask someone at the South Point if they know Bob Dancer and they say “who???”
Well, for 4) that will always be the case since the staff would know him by his real name, and not as “Bob Dancer”.
The South Point never appealed to me as an out-of-town guest. Their hotel is horrible and grossly overpriced (never stayed, saw a video of the room. It’s a Motel 6) and the casino is like a warehouse. The late night specials, half price ice cream from that burger joint and hot dog cart $1.50 hot dogs were the only reason I liked the place. Well that and the cocktail waitress attire. Otherwise Station is the way to go. Feast buffet is gone. SP buffet stinks anyway. I remember when the breakfast buffet was under 10 bucks, that all it’s worth to this day