There are a variety of reasons, some more important than others.

1. It's a legal obligation with legal penalties for not doing it. If you don't report your earnings, you're breaking the law. Now, admittedly, you probably won't get caught, but you shouldn't whine if you do. The crime you'd be guilty of is tax evasion - depending on how intentional and how serious the IRS deems your offense to be, this could result in anything from a fine to federal pound me in the ass prison.

2. It's an ethical obligation. This shouldn't be confused with your legal obligation - this is real income and it's both ethical and patriotic to pay your share. As I posted earlier, objection to how taxes are spent is irrelevant. Elect better politicians if you don't like the way taxes are being spent (November is usually when American elections are held; April is when tax returns are due).

3. It allows you to openly invest your earnings. If you have large sums of unreported income, you will set off all sorts of alarm bells by pushing it into a financial system which is heavily regulated and heavily tracked. As a result, most traditional forms of investing will be off-limits. The mafia (which also deals with this problem) generally launders the money (which is a crime in and of itself); you would also have to do something similar.

Various authors have attempted to calculate whether openly investing your earnings actually nets you more than not paying taxes and not investing; I'm a little skeptical of the calculations, but several authors claim there is financial benefit to paying your taxes now, and then putting your money into an investment (which will grow quickly due to compounding).

4. You will reach a limit where just keeping around stacks of cash becomes unwieldy. Given enough winnings and/or long enough career, you'll just get annoyed at the number of things you'll need to do just to physically keep your money - safe at home, large safety deposit box, risk of robbery, etc.

legally, no it isn't.

True, you don't have to pay taxes on it..........until you're audited.

any "cash" based job is already a pretty big red flag for the IRS. Bartenders, waiters, hair stylists and even blue collar jobs like construction, painting, plumbing, etc. are all jobs that people can easily be paid under the table. What a surprise that they're also more heavily audited!

I had a friend who worked in construction. much of his pay was cash and under the table. but you can't pay cash for everything in life. you still need to write checks so he deposited some of that cash in the bank to pay his finances with. what a surprise when his tax form set of a few red flags and the IRS decided to take a closer look. even bigger surprise when he had to explain to said IRS guy why he was only claiming $xx,xxx in earnings per year but he had $xx,xxx + $yy,yyy of deposits into his bank account..........

Been living in a cave? There's these guys:

http://www.pokertek.com/

and these guys:

http://www.lightningpoker.net/poker.html

and neither of them have taken off.

Didn't Excalibur put these in, then end up getting rid of them? I always wanted to try one out, but don't think it would go over well with the majority of casual players.

Me on the way to Canada if online poker isn't playable from the US.

1. Yes.

2. They don't.

News Flash, Online poker has been dead for some time now.

Speaking solely as someone who has played a lot of B&M poker over the last several years. I am now switching more to online due to the fact that it is more convenient and less expense related than traveling to the nearest legal B&M card room which is Atlantic City for me - I am in NYC hence my 2+2 name. And all the card rooms in NYC charge an arm and leg in rake and time constraint, on top of that you could get robbed in some of these places. Part of the reason I have switched is due to my new employment position which makes weekday trips to AC impossible and the high cost of rooms in AC very expensive on the weekends.

I don't think there would be a big rush of online players going live tbh if the online poker world dissipated. The same people who are fish online and are just casual players are the same ones who take the occasional trip to Vegas and AC and play blackjack, craps and slots and yes head over to the poker room when they feel like it. These recreational gamblers already come to the B&M card rooms and are already donating their money on the poker tables from time to time. The people who really focus on online poker and study at it become by and large good players but this is not true always.

I don't think there would be a rush to the tables in the B&M casinos, however the polar opposite might be true. A lot of online pros who spent most their time in their homes playing online making thousands, even millions may start coming to the games at the B&M card room instead. Thus making the games even harder, especially at some of the higher stakes where the influx of fish and new players is sometimes sparse.

I seriously hope that this happens and that you are right about both these points. You can be sure that if online poker gets regulated that one way or another the Poker sites will not take this money out of their own pockets. They will take it out on the players and they will pay for it one way or another.

I don't know what you are talking about. I don't play huge stakes but the games I play on Stars fill up quite regularly.

Compared to 4 years ago there's probably more players online today, so in that sense "not dead". Compared to how soft the games where 4 years ago and how easy it was to make money, games today are "dead".

Still lots of players online, just not the fish fest it used to be. Winning actually requires a bit of skill now.

It's a very different world these days vs a few years ago (before the bill). I stopped playing online because there stopped being any real value to it for me, as the stakes I would like to play are now occupied almost solely by strong players. It's not worth it to me to multi-table .50/1 and try and squeak out some money. I liked it a few years ago when I was playing $100 and $200 SNGs and making bank.

At the Hammond Horseshoe they had two .50/1 electronic tables that were very popular and super fishy. They took them out and replaced them with more slot machines. I don't know if they released an official reason, but obviously slots generate a lot more income for them so I'm guessing that's why.

On the flipside, if somehow online gaming gets regulated in the US,
and we are all once again free to play at any site worldwide, assuming the regulation was handled reasonably enough and they all signed on,
(very optimistic, yes) would you play more online? Would it hurt or help live rooms?

Would you then rather face the seemingly shrinking pool of live players
in the US, or the worldwide pool of potential online players?

even if FTP and others are somehow dealt a serious blow in the US, i can't see it being anything more than temporary in the long run.

The two casinos nearest Indianapolis (Anderson and Shelbyville) are exclusively PokerTek and if you want to try them out, worth a visit. Anderson room is dead, but Shelbyville has 1/2 NL going pretty much any time but morning.

I like the tables fine, but they still rake 5+1 so all savings are obviously passed on to the casino not the player, and these casinos are also in bankruptcy (for tax avoidance reasons is my understanding).

To OP:

I play live for a living but can't win enough at any similar stakes online for it to be worth my while. I suspect there are many online grinders that would have to get jobs because the businesses, lifestyle, and skills required are so different. Bottom line, I don't think the elimination of online poker would help or hurt me much. Even if online was shut down and it sent a rush of Internet pros to the B&M, I don't think I would see that as a good thing..

I think you nailed it above but I'll add a few related points.

For the most part B&M rooms will not expand or open (especially open) that quickly even if demand increases. In California it's almost impossible to get a license and new casinos face serious opposition in most other spots (e.g., Massachusetts and Rhode Island).

Card club business in the Los Angeles area is way down; I don't know of a regular that disputes this. People who post here may not notice for two reasons. First clubs disguise their loss of business by closing down sections (e.g., Commerce upstairs no longer has the tiny NL games). Second, because 2+2ers often come during major tournaments they perceive the clubs as busier than they really are.

The games are much worse and it's not only due to the economy. The influx of talented players from the online world and those that simply study the game a lot has changed things forever. Years ago you could count on several loose, weak players at most tables in middle limits. Those players enjoyed "pushing money around" because there were others like them to share the fun. They would typically come home a winner 30% of the time, lie to themselves that they almost break even, and then come back again and again. Today with tougher competition they win perhaps 10% of the time. It's hard to lie to yourself when you only win one time in ten. These players are dropping down in limits and/or playing less if at all.

If online is effectively shut down it will be mostly the talented players with a thin traditional resume and no easy entry to the regular job market that make the move to places like Los Angeles. The games will get tougher; the weaker players will enjoy it even less; the drop/rake won't go down; and the misery will be apparent at most tables. Then the brainy type who dropped out of studying let's say physics at age 20 is now aged 30 or so and will realize he made a very bad career choice.

Hopefully I'm wrong.

The giant fallacy with the question in the subject is that it's the complete opposite of the way things have historically been. More online poker leads to more live poker, not less. Rick's right though. Since the only people left online are actual good players (at least compared to a few years ago and to most live players), if they all decided to start live it would not help the live game. Plenty of those guys are already playing live anyway, I see them every time I'm out there, nitting it up. The true, biggest "B&M poker rush" would only occur if online poker was opened back up to everyone, not if it was shut down. But the salad days are probably gone forever.

If online was shut down all the way, I am sure you would see a huge amount of poker be pushed to the B&M and if you legallized online I think you would see a rise in B&M but not as much as if you were to ban online, which way would produce more B&M players, I say if online was shut down, its not like people would flock to online if it were legall again, the poker boom is done withand went out in flames a while back as you can see ESPN cutting their fillming back more and more each year.

Rick and Eco (page 3) both have great posts on this. The most salient points imo:
1) Online poker boosts B&M poker long term
2) A hit to online poker would be a short-term boon to B&M, but a long-term drain