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HOME > STRATEGY > Strategies & Tips > Ask the Slot Expert: New tax law affects itemizing gambling losses

Ask the Slot Expert: New tax law affects itemizing gambling losses

16 May 2018

By John Robison, Slot Expert™

Question: One of the interesting side effects of Trump's new tax bill is that it will virtually eliminate the ability of most gamblers to neutralize their jackpot wins via itemizing. Under the old tax plan, most homeowners generally paid enough in mortgage interest to allow them to meet the minimum threshold for itemizing. With that threshold greatly increased for 2018, I know I won't be able to itemize deductions anymore, nor will a ton of other middle-income folks.

Going to be a very unpleasant surprise for anybody who doesn't realize this until they file their taxes.

Answer: I suspect there will be many unpleasant surprises come April 15, 2019. A good indication is how few politicians are touting the tax change in their campaigning so far. (I have a hard time calling it reform because reform means to change something in order to improve it; I'm not sure if the new law is an improvement for the majority of taxpayers.)

The American Gaming Association prepared a document called What Does Federal Tax Reform Mean for Casino Customers? which describes how the new law affects gamblers.

As you pointed out, the gambling loss deduction was not eliminated, but fewer people will itemize because the standard deduction was increased and some deductions have new caps.

Another change will affect professional gamblers. "A professional gambler may report a business loss, which may be applied against other income from the year," according to Taxation of Gambling by Brad Polizzano in the October 2016 issue of The Tax Adviser. Under the new law, wagering losses and expenses cannot exceed winnings. A gambling loss can't be less than zero, so a Schedule C loss can't be used to offset other income.

Question: Liked your article on annoying players. It's interesting what sets us off, or what doesn't for that matter.

I like to play a machine with a little noise, and as long as nearby machines aren't set to concert decibel level noise, they rarely bother me.

I usually play video keno, and if a corner machine is available I take it on either side. Invariably, for no logical reason, even if there are empty similar machines somebody could sit at that are open in the same row, somebody will sit at the machine next to mine. That drives me batty.

Players that mash the button as hard as they can or bash it multiple times just for the sake of bashing it also are definitely annoying.

Sitting next to two people carrying on a rather loud and lengthy conversation who really aren't playing is also annoying, as is the guy on his cell phone for 25 minutes also not really playing.

As you say, all things people do that really aren't doing anything wrong, just things that get under my skin.

As to smoking, I stick to GVR, they have easily the best non-smoking area I've encountered. Solves that problem for me.

Answer: I think there are more video poker machines in Las Vegas with no sound than machines with sound. I like a machine with a little bit of sound just so I get an indication — a bit of slap in the face — to let me know when I'm dealt a paying hand. When I hear the ding, I know to be on the lookout for a winning combination.

Have you ever noticed that there are multiple ways a single-hand IGT video poker machine can be configured in terms of letting you know you were dealt or finished with a paying hand? The stealthiest way to indicate a paying hand is to just highlight the hand's row in the paytable. I really appreciate having a little sound on these machines because it can be easy to miss the highlight.

A machine can also be configured to display the name of the winning hand in a space between the cards and the paytable. Sound isn't as important to me on these machines because it's hard to miss the text suddenly appearing in the blank space. The text changes, furthermore, when the hand goes from pending to final. The text gets bigger and changes color.

Video keno, eh? Well, to each his own. But you know another thing that bothers me? Someone playing Caveman Keno on a loud machine. But again, to each his own.

Like you, I try to play an end machine, but not if there's a garbage receptacle at that end. I've learned the hard way that some people do some pretty disgusting things into those receptacles. And, like you, I'm always baffled at why someone will sit at the machine next to mine when there are other machines available and we could spread out a bit. OK, sit next to me, but please don't hit me with the seat when you swivel it to get up. And while we're at it, if there are available urinals or stalls in the restroom, don't use the one next to me. Spread out. That should be a law.

I can think of a number of reasons why some people might play a particular machine. Your and I like end machines, they might prefer machines in the middle. They like sound and that machine has sound. Or that machine might be silent and they prefer a silent machine. Maybe they did well on that machine once and they want to see if lightning will strike again. Maybe they did poorly on that machine and they want revenge. Maybe other machines have glare.

I had to play a middle machine at the Palms a few days ago. They have a pod of six slant-top video poker machines, back-to-back in two rows of three. Only one machine, in the middle on one side, has no reflection of the lights in the ceiling.

This is a brand-new ceiling with brand-new lighting. How is it possible that, in 2018, casino lighting designers are still creating lighting systems that cast a glare on slant-top machines? Even though I figured out a way to sit at my preferred machine (I hit a few royals on it) so the reflection of the floodlight above falls on the pay table section of the screen and not on the cards, I couldn't play it a few days ago. The new high limit table games room is across from the machine and a worker set up a spotlight in the room for some reason and the light was shining directly into my eyes.

I'm hoping that the video poker machines will be moved to a slant-top friendly area once the Palms completes its renovations.

Now, I have to admit that I occasionally get a little enthusiastic hitting the buttons. But I tone it down when I notice I'm getting a bit loud.

Today there was a lady playing a slot machine across the aisle from my video poker machine. She was hitting the button like she was in a slot tournament. Just constantly hitting the button. I don't know why she was hitting the button so frequently. Maybe she was anxious to earn the points she needed for the dining credits that the casino was giving away today.

Finally, I'm glad that Green Valley Ranch has a good non-smoking area. Red Rock has a large area and it has many positive expectation machines in it. It would be nice if they would put some of the 99%+ machines in the area too, so that players who want to play them can also have a smoke-free experience. Gold Coast also has many desirable machines in their non-smoking area.

The non-smoking area at Sam's Town, when I was last there quite a while ago, was filled with machines that looked like the casino would be just as happy to have them in a warehouse as on the slot floor. Happier, in fact, because the machines wouldn't be using electricity sitting in a warehouse.

It reminds me of a non-smoking area a casino set up about 20 years ago. The action in the non-smoking area was below that in other areas of the slot floor. The casino concluded that players didn't want to play in a non-smoking area.

A casino consultant pointed out that the casino put its crappiest machines in the non-smoking area and the machines didn't get much play even when they were out on the main floor. The reason the non-smoking area didn't get much action wasn't because players didn't want to play in the area, it's because players didn't want to play the machines the casino put in the area. Talk about a self-fulfilling prophecy.

I think I have the solution to dealing with smoking in casinos. Instead of banning smoking entirely -- as has been done in the vast majority of public spaces in the U.S. — just reverse the percentage of the slot floor that is smoking versus non-smoking. Instead of 95% smoking and 5% non-smoking, make it 5% smoking and 95% non-smoking.

The CDC currently estimates that only 15% of U.S. adults smoke. It's time for casinos to recognize that fact and make greater accommodations for non-smokers.

But don't more gamblers smoke than non-gamblers? Not according to a study by the University of Nevada, which found no statistically significant difference between the smoking rates of gamblers and non-gamblers (Pritsos, C.A., "The percentage of gamblers who smoke: a study of Nevada casinos and other gaming venues," Reno, NV: University of Nevada).

Send your slot and video poker questions to John Robison, Slot Expert™, at slotexpert@slotexpert.com. Because of the volume of mail I receive, I regret that I can't reply to every question.

Copyright © John Robison. Slot Expert and Ask the Slot Expert are trademarks of John Robison.

John Robison
John  Robison
John Robison is an expert on slot machines and how to play them. John is a slot and video poker columnist and has written for many of gaming's leading publications. Hear John on "The Good Times Radio Gaming Show," broadcast from Memphis on KXIQ 1180AM Friday afternoons. You can listen to archives of the show online anytime.

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