Playing as a business

**genini1** · 08-08-2015, 09:30 AM

For the last 5 or so years I've tried my hand at ap casino play. For the most part this was just an interesting hobby to try a few times a year and generally I'd make a few thouand at the end of the year and move on. Recently though I've had more time and a much larger bankroll and while I still only want to play part time I am wondering what the best way is tax wise.

Currently I put my winnings as just gambling winnings pay the tax and move on. Now though if I'm going to be making low 5 figures I'm curious if I can form a business and use that for deductions and possibly a self employed 401k as I don't have access to one otherwise.

Basically are there any good books discussing this topic and in the likely event that the answer is to see a professional who would I want to talk to. Every time I look at accountants all the acronyms and qualifications just lose me.

**mushin** · 08-08-2015, 12:13 PM

First step is to keep detailed records of all travel and expenses not to mention winnings / losses etc. As far a doing this as a business.... I really don't think you would need to actually setup a business but rather just go the route of declaring yourself a professional player and being dilligent on the aforementioned record keeping. A good place to research the topic would be to look into how professional poker players do things as I think there are probably more of them then there are Professional Blackjack players but "gambling" is gambling so the method Poker Players use should just carry over. Additionally it would be wise to consult with an accountant that has experience with handling the books of professional gambles. They would be a wealth of information and just consulting with them for an hour up front would probably be well worth the cost for their time. It would also be smart to have a Lawyer experienced in gambling cases on a small retainer "just in case" or at the minimum know one that is experienced in that segment that you can call should you ever need.

**biggg** · 08-08-2015, 01:20 PM

I would consult an accountant with experience in gambling...I thought it would cost way more than it did to do this it was completely worth it.

**Bigdaddy** · 08-09-2015, 05:55 AM

Lots of good guidance on the web - Google "taxation of professional gamblers", or "tax accounting for professional gamblers". You'll get some pretty good articles; like this for instance -

http://www.fitz-cpa.com/gambling.aspx#GM7

**moo321** · 08-11-2015, 10:32 AM

Let me start off by saying that I normally recommend DIY solutions for a lot of these things. But gambling activities are very different, very complicated, and it's worth it to get help BEFORE you start.

1. You can file as a professional gambler. This means your losses and expenses are deducted on Schedule C (self-employment) or above-the-line. Non-professional gamblers can only deduct wins on schedule A (itemized) and must deduct them below the line. Professional gamblers also have to pay an extra 15.2% "self employment" tax.

2. It's really hard to say what filing status is best for taxes. Unlike almost any other business (which should use an LLC with an S-Corp election), gambling activities can be best done as a hobby, self-employed, an S-Corp, a C-Corp, or even a partnership. It also depends on state and local taxes, which can vary greatly. (example: Ohio will basically take all of your income in taxes if you don't file as a professional gambler of some kind, because only professionals can write-off losses). Whether being a professional gambler is the correct decision is very complex, and I would recommend talking to a CPA, EA, or a tax attorney who understands the area before you decide.

3. This book is good, but I believe it contains some errors/out-of-date material: http://www.amazon.com/Tax-Help-Gambl.../dp/0929712536. Unfortunately, there are few good sources in this area.

4. Yes, you can use the self-employed retirement accounts as a professional gambler. Again, the rules are really complex, and the "best" decision varies wildly based on your personal situation. I would recommend finding a good financial advisor to handle this for you, because they are absolutely worth 1-2% to save you several times that in taxes per year.

5. As a question to others, would you guys buy a short book or PDF of tax info for professional gamblers? i.e. Deductions to claim, tax planning strategies, etc.

**LVBear584** · 08-11-2015, 11:23 AM

As a question to others, would you guys buy a short book or PDF of tax info for professional gamblers? i.e. Deductions to claim, tax planning strategies, etc.

Definitely. The more competent advice that can be obtained on this complex topic, the better.

**mushin** · 08-11-2015, 11:29 AM

At my point in play this would not be of use...

But the nice thing about books... they are timeless. Even out of date stuff can easily be updated or revised as time goes on. I say go for it...

**genini1** · 08-11-2015, 04:26 PM

Moo, thanks for the link I'll check out the book for sure. While AP blackjack is a niche market I'm always surprised by exactly how little there is out there sometimes. Otherwise I'll talk to a CPA the next time I make it out to Vegas. Unfortunately there's none near me with a specialty in gaming.

**moo321** · 08-13-2015, 01:19 PM

Originally Posted by genini1

Moo, thanks for the link I'll check out the book for sure. While AP blackjack is a niche market I'm always surprised by exactly how little there is out there sometimes. Otherwise I'll talk to a CPA the next time I make it out to Vegas. Unfortunately there's none near me with a specialty in gaming.

I believe Russell Fox and Marissa Chien both specialize in professional gamblers.