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Deal Me In


Using this Lotto write-off ruse is ill advised

Dear Mark: I have a tax liability from a slot jackpot win from this past November of $20,000. Because I have never won any sizable amount in the past, I didn’t do what you have suggested multiple times, that is, keep accurate records of my play. All I have is the tax form from the casino and no documented losses to offset that win. On eBay, I have seen that you can buy losing lottery game tickets, good for a tax write-off on your 2014 gambling losses to offset your winnings. Is this legal? Tim H.

You’re right about one thing, Tim. I have harped incessantly about keeping accurate records so that you can counterbalance your tax liability on your wins by deducting your losses. When keeping law-abiding records while you play, the IRS will accept as documentation your written log detailing the date of your wagers, the location, amount of the bet, type of gaming, and wins and losses. That includes lottery play and losing lottery tickets which can also be used by a loss-claimant to substantiate their loss claims. However, these better be losses incurred by Tim H. of Scranton, PA rather than valueless scratch-off tickets from a party store in Escanaba, MI.

Now, Tim, accepting your query as you meant it, let’s discuss your contrived solution of showing increased loss totals by buying thousands of dollars worth of losing lottery tickets online.

Yes, you can go online and buy $20,000 worth of losing lottery tickets to cover your $20,000 jackpot win. From eBay to Craigslist, some sellers believe repurposed lottery tickets can serve as documentation if Uncle Sam comes a calling. These shady online ads tend to state, “Yes, you can use them for taxes.”

The problem with that is that every lottery ticket is coded with a date, time, and location. How are you going to explain to the IRS that you have thousands of dollars worth of losing tickets from some other state? Any IRS agent worth his salt can easily use his forensic CSI skills to determine that the losses you are claiming are not yours but someone else’s. You can try it, Tim, but I figure you are going to get into some deep doo-doo if you ever find yourself being audited.

Additionally, you really didn’t expect me to step into cow pie myself by recommending to you to buy boatloads of losing lottery tickets in a nationally syndicated newspaper column, did you?

Since you didn’t keep records and you are up against the clock, that being April 15th, you might check to see if – that is if you used a Player’s Card – you can get a win/loss statement from the casino where you hit that jackpot. Unfortunately, gambling losses can only be used to offset gambling winnings during that same tax period. Future losses, like those incurred this year, cannot be carried back to neutralize your November 2014 jackpot.

Oh, and one final thought, Tim. Figure Uncle Sam for having knowledge of your $20,000 score as the IRS also received copies of your W2-G’s from the casino.


Gambling Wisdom of the Week: “The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.” – Mark Twain


“I’ll be back”

Dear Mark: Recently, someone who wrote you was frustrated with never winning at slots. Your answer was excellent but you left something out that is probably also adding to his frustration: gamblers, especially slot players in my opinion, are notorious liars about their gambling outcomes. Although the examples of winners he gave sound legit, he doesn't know how much those people put into those machines to get those jackpots. Many more people that tell you how much they "won" tend to leave out a lot of facts about that win, like how many hundreds they put in that machine to get the $100 jackpot. Or, they just outright lie to save face about blowing all their money, aka "Oh, I broke about even.” This can frustrate a person who hears all these (at best) half-truths about other peoples' experiences, making a person think there is something wrong with him or her when, in reality, almost everyone else is in the same boat. Tom D.


Your e-mail, Tom, is totally on target. Most players are notorious for overestimating their winnings and playing down their loses.

It’s uncountable how many times a player will enthusiastically tell me, “Look, Mark, I’m winning,” as they point to their credit meter. OK, but showing me 250 credits on a quarter machine is nothing more than $62.50 worth of credits that they will probably end up burning through. What always slips their mind is disclosing that they are into said machine a few Benjamins.

That, Tom, is not to say that there are not a handful of winners. A winning customer is the most important asset to any casino. Casinos cannot afford to have all of their clientele leave in a huff. That small percentage that does walk out winners tells friends and family, and then those future players are caught in a trap by the idea that a jackpot for them just might be one pull away.

Accept as true, Tom, the mathematics of the gambling business. The house is going to hold a certain percentage of every dollar wagered on a slot machine, and then grind additional monies out of either Joe or Josephine as those players cycle through their remaining bankroll.

What I believe is happening is that most players confuse winning with what they are experiencing, the “possibility” of winning. What keeps the slot player tied to a machine is the prospect, no matter how remote, of that pot of gold at the end of the rainbow jackpot. Reality only sets in when they finally total out and find themselves lighter in the wallet than when they started. Then, of course, out comes the proverbial, "Oh, I broke about even."


Likewise, the most favored words the casino loves to hear from that same losing player is, “I’ll be back!”


Dear Mark: Of the 50 or so blackjack games where I play, there are still a half-dozen hand-shuffled games. I much prefer them to the shuffle machines that are just about everywhere. I have always been curious as to how many times the dealer has to shuffle the cards to get them random. Danny F.

Randomizing a deck of playing cards provides the element of chance at blackjack.

The most common shuffling technique used in the casino is called the “riffle” shuffle. Here the dealer separates two halves of a deck; then thumbs inward and upward to make a bridge such that when the cards are released they fall to the felt interwoven.

According to the Gilbert–Shannon–Reeds model, which provides a probability distribution on shuffle permutations, the recommended number of times that a deck of cards should be riffled in order to be thoroughly randomized is seven.

Shuffling seven times, Danny, is the number I had been told since day one in the pit, and what I have passed along to countless dealers. Seven hundred is the number of times I’ve been told to “Shut up and shuffle.”


Gambling Wisdom of the Week: “In life we must make all due allowance for chance. Chance, in the last resort, is God.” – Anatole France, The Garden of Epicurus (1926)