Keno parlor not immune to the taxman

July 16, 2002 5:13 AM
by

share

The majority of casinos have set their six spots and seven out of eights to pay $1,480 just to avoid the tax headaches, but there are some casinos that pay $1,490, $1,495, or even a flat $1,500 on their six spots.

These pay outs are fine on a straight six spot, but if you are playing way sixes, for example a 10-way six, you might consider pro-rating your wager if the casino will let you. A 10-way six using five groups of three will normally have some small catches on it any time you hit a solid six.

You might be in the situation where you’ll have to fill out a tax form for a winner of $1,511, just a few dollars over the limit, due to that particular casino’s slightly higher than standard pay out. If you’re playing a way six at one of these games, you might ask them if you could play for 90 cents a way or so, just to be on the safe side! That way you’ll win almost as much for a solid six, while at the same time avoiding the tax form inconvenience.

According to IRS regulations, ALL gaming winnings are taxable income, even if you win only a dollar or two. Keno games are required to report only NET winnings of $1,500 or more. The keno player is still liable to pay taxes on smaller winnings, even though no report is made.

The Internal Revenue Service regulations require that casinos report keno winners of $1,500 net or more to the federal government. This is done using a form W2-G in the case of U. S. citizens or resident aliens, or form 1042S if the winner is a non-resident alien. The $1,500 figure refers to net winnings, after the cost of wagers for that game are deducted. If you won $1,509 on a $20 ticket, your net winnings would be $1,489, and the casino would not be required to fill out a tax form.

Many players assume that if they are playing at a Keno game that like most, pays 3-for-1 on a one spot ticket, that the maximum that they can play without risking tax liability is $499 on a one spot, which when hit would result in a winner of $1,497. Actually this results in a net winner of $998, once the price of the wager is deducted. The true maximum that can be played on a ticket in this scenario is $749.99, which when hit would result in a gross win of $2,249.97, and a net win of $1,499.97! Again, no tax form would be required.

Well, that’s it for now, good luck, I’ll see you in line.