Only a small number of people used to be able to get seriously hit on their taxes by honest reporting (you'd have to be a broke degen who broke even or lost money and missed out on their EIC or maybe an upper-middle class guy who goes over their IRA contribution eligibility) but this is absolute murder now with he ACA. Gamblers are de facto banned from Obamacare subsidies lol. That's 4 figures a year for me.

i can see why pros or frequent gamblers at a particular casino would keep a large amount of chips in a box. easier (and potentially cheaper) than constantly depositing and withdrawing. have enough to cover your weekly/monthly bankroll swings. certainly there is trust that the casino won't suddenly close its doors.

i personally (as a weekend warrior that spreads my playing out over a few rooms) keep a buy-in plus some "top-off" money in green chips only for sands pa. and that's purely because of their annoying buy-in process. the cashier is not super close to the poker room (not really far either... i'm just being lazy with this part) and there is often a line to buy chips. you have to get your first buy-in at the cage. there are no chip runners. and for whatever reason, the floor has developed a process there over the last couple of years of not letting you lock up your seat without chips. they pretty much just dismiss you if you don't have chips.

i have had this scenario happen to me three times now.

me: hi, i'd like to play 1-2 (there is no waiting list)
floor: do you have chips?
me: not yet
floor: get chips and then come back and see me
me: (goes gets chips. comes back)
me: i have chips now, i'd like to play 1-2 please
floor: there are no seats. you're third on the list.
me: (standing there holding a rack of chips until a seat opens up)

so now i just keep all my green chips up to $500 and cash out the rest. if i leave broke then i'll buy my chips at the cage next time.

Buy in $20,000 in chips. Lose $5,000. Cash out $15,000. CTR generated for $15,000.

CTR = Currency Transaction Report

Emphasis on CURRENCY.

I am not a tax attorney and this cannot be used as tax advice, but:

This is not accurate. Losses are never business expenses, regardless of if you file as a professional player or not. The main difference is that, if you file as a professional, your AGI will include be your net winnings. If you file as anything other than a professional, gambling losses are deductable up to the extent of gambling winnings, but only if you itemize your deductions. "Business expenses" for a professional are things like: Gas/tolls/hotels etc.

It also does not matter if and when you cash out vs color up. The term is "constructive receipt" and is the same reason that it did not matter if you cashed out from your online account at the end of the year or left your money in there, you still owe tax.

Side note: if you are filing as a professional, the IRS would expect you to keep extremely detailed records, down to table number at the casino where you played your session, for every session you play. They do not care when you cashed out.

fyp

I may be mistaken, but I do not think that buying chips results in a CTR being generated, only redeeming them. (same with depositing >10k at a bank.)

It's a tough thing to argue about though, since employees are legally barred from discussing it anyway.

A CTR is generated by a cash transaction. Buying $10K chips for cash would qualify. But I interpreted the example in the post as saying the player bought into the game with $20k of chips. That would not generate a CTR since it is not a cash transaction .... but the language of the post is ambiguous so I see why someone might interpret it as saying buying $20K chips with cash to get into the game.

Yeah, you guys are right, I should have just looked it up first:

Many larger banks fill these reports out for dollar amounts above $7,500. While regulations requite them to do it for 10k and above, many due it for smaller than that to make sure they are covering their arses in a worst case scenarios.

Wait a minute.

Is it "more than $10,000" or is it "$10,000 and above?"

There is a difference.

I worked at a bank for a brief time, and I am fairly certain that it is $10K or more, not more than $10K. We had a probably structurer with an account where I worked, and deposits were always $9,999 or less.

Additionally, any unusually large cash transactions (definition varies from place to place; it was $3K or $5K where I worked) will tend to generate an SAR (Suspicious Activity Report). You generally don't see this form; the business fills it out with your information after the transaction. It's similar to a CTR but has a little less information (notably, it doesn't require the transactor's profession). It's mostly a CYA measure against structuring, but it is a government form that the feds expect to be filed when appropriate.

Apparently the probable structurer at my bank wasn't informed about SARs.