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Can You Claim Gambling Losses on Your Taxes?

Updated for Tax Year 2020

Gambling losses are indeed tax deductible, but only to the extent of your winnings. Find out more about reporting gambling losses on your tax return.

Gambling losses are indeed tax deductible, but only to the extent of your winnings and requires you to report all the money you win as taxable income on your return. The deduction is only available if you itemize your deductions. If you claim the standard deduction, then you can’t reduce your tax by your gambling losses.

Keeping track of your winnings and losses

The IRS requires you to keep a log of your winnings and losses as a prerequisite to deducting losses from your winnings. This includes:

  • lotteries
  • raffles
  • horse and dog races
  • casino games
  • poker games
  • and sports betting

Your records must include:

  • the date and Free sign up bonus gambling type of gambling you engage in
  • the name and address of the places where you gamble
  • the people you gambled with
  • and the amount you win and lose

Other documentation to prove your losses can include:

  • Form W-2G
  • Form 5754
  • wagering tickets
  • canceled checks or credit records
  • and receipts from the gambling facility

Limitations on loss deductions

The amount of gambling losses you can deduct can never exceed the winnings you report as income. For example, if you have $5,000 in winnings but $8,000 in losses, your deduction is limited to $5,000. You could not write off the remaining $3,000, or carry it forward to future years.

Reporting gambling losses

To report your gambling losses, you must itemize your income tax deductions on Schedule A. You would typically itemize deductions if your gambling losses plus all other itemized expenses are greater than the standard deduction for your filing status. If you claim the standard deduction,

  • You are still obligated to report and pay tax on all winnings you earn during the year.
  • You will not be able to deduct any of your losses.

Only gambling losses

You can include in your gambling losses the actual cost of wagers plus other expenses connected to your gambling activity, including travel to and from a casino. Keep in mind that the IRS does not permit you to simply subtract your losses from your winnings and report the difference on your tax return. And if you have a particularly unlucky year, you cannot just deduct your losses without reporting any winnings. If the IRS allowed this, then it’s essentially subsidizing taxpayer gambling.

The bottom line is that losing money at a casino or the race track does not by itself reduce your tax bill. You must first report all your winnings before a loss deduction is available as an itemized deduction. Therefore, at best, deducting your losses allows you to avoid paying tax on your winnings, but nothing more.

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    How Do Slots Work?

    Slots are by far the most popular casino game for a few key reasons:

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    • The gameplay is extremely simple

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    The object of a slot machine is for a winning combination of symbols to appear when the reels stop. This is true whether it’s a three-reel or a five-reel slot.

    Setting Paylines

    A winning combination of symbols is based on paylines that run across the reels. A slot can have as few as five paylines or over a hundred.

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    Should You Always Do Max Bet?

    No. You should always play with however much you’re able to lose.

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    Slot Payback (AKA Return to Player)

    A slot’s payback is how much a player can expect to keep of their bankroll based on the average net wins. This is also known as Return to Player (RTP). A high slot payback is 90% or higher, and a low slot payback is 70%.

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    Bonus Features

    A slot’s biggest selling point aside from the jackpot, RTP, and overall theme are the bonus features. These are usually triggered when three or more “scatter” symbols appear on the reels. You then have the opportunity to win more money, either through free spins, a minigame, or selecting a hidden prize.

    Wild Symbols

    The Wild symbol usually best matches the theme of the game. For example, Cleopatra is the Wild symbol in the Cleopatra slot.

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    Different Types Of Slot Machines

    Because slots are always innovating, it’s difficult to create a list of the different types. Instead, let’s look at the key factors that separate one slot from another.

    Number Of Reels

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    Video slots are the most common form of five-reel slots and often feature bonus and free spin features. 3D slots are the same, except they use 3D animation and graphics whereas video slots use 2D.

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    Penny slots earned their name by allowing players to bet with just $0.01. But some slots can cost a minimum of $1.00 per spin, and betting the max can make your overall wager climb to as high as $125 or more.

    Volatility

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    Brick-And-Mortar Casinos

    The most common place to play slots is at a land-based casino. In most states, casinos are either commercially operated or tribal-owned and located on Native American lands.

    The ten states that do not have any land-based casinos are:

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    • Hawaii
    • Georgia
    • Utah
    • Nebraska
    • Tennessee
    • Kentucky
    • South Carolina
    • Virginia
    • Vermont

    The highest concentration of casinos and slot machines in the United States can be found in Las Vegas, Nevada. And not only that, it’s also where you can find the largest jackpots of all time. In fact, the top six biggest casino wins ever were all on Vegas slots.

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    Why are slots the most popular game at the casino?

    Slots can make up 75% or more of a casino’s total gambling revenue. That means the rest comes from all table games and poker tables combined. Why? Because slots are fun, attractive, and can turn relatively low wagers into multi-million-dollar payouts.

    The Most Popular Slots Offer The Highest Payouts

    It should come as no surprise that the easiest way to get people to play a slot is by offering an enormous potential jackpot.

    Enter the slots area of a Las Vegas casino, and you’ll find dozens of options with a top prize that can be well into the millions. All it takes is one single spin to win it all. That’s hard to resist.

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    Free Online Slots FAQ

    Yes. No matter where you’re located in the US, it is completely legal to play free slots online.

    Because you’re playing with demo credits rather than real money, it’s not considered gambling. And if you download a free slots mobile app, you don’t even need an internet connection to play.

    Yes, you can win real money playing slots online. However, you’ll need to be in one of the three states (DE, NJ, and PA) where it’s legal to win money legally. Michigan and West Virginia will soon offer legal online gambling as well.

    To win cash prizes, anyone located in the US (except for the State of Washington) can legally play at sweepstakes casinos, which have a wide range of online slot machines.

    You can also play free slots using demo credits that cannot be redeemed for prizes right here at bonus.com and elsewhere.

    No. You do not need to create an account to play free slot games online. Even if you’re playing in demo mode at an online casino, you can often simply go to the site and select “play for fun.” Only online casinos and sweepstakes casinos require signup to play.

    No. You do not need to download anything to play free online slots. The titles are instantly available directly through your web browser. However, there are a number of free slots on your phone whether on your Android or iOS device.

    Yes. Most of the popular Las Vegas slots are available to play for free online. That’s because a lot of the gaming software developers provide their titles to both brick-and-mortar casinos as well as online casinos. Plus, the demand for the most popular options make them particularly readily available.

    Yes. Because you do not have to create an account, you’re not providing any of your personal information. Unsafe slots are those run by illegal online casinos that take your payment information. Free slots are always completely safe simply because they don’t accept real money.

    The benefits of playing free slots include:

    • The ability to play simply for the fun of it.
    • Testing a game to see if you like it.
    • Practicing strategy before risking real money.
    • Placing huge bets that you otherwise wouldn’t want to do.

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