"The worst part about US tax law regarding gambling is that your gross gambling winnings count as gross income, while your gambling losses count as deductions, maybe. The IRS considers each gambling session separately when computing the numbers: all your winning sessions add up as gross income, and then your losing sessions add up as a potential deduction. This is true even if you are a net loser for the year. Also, the amount of losses you can deduct is limited by the amount of your wins, so if you have a losing year you can't claim a net loss. The only exception is if you file your taxes as a professional gambler (see below).
For example, let's say you play poker once in January and win $1,000. Then you play again in July and lose $1,500. The win counts as part of your gross income. It goes on the first page of your 1040, or “above the line”. If you want to itemize your deductions, you can claim $1,000 (not $1,500) on Schedule A. Then that flows onto the second page of your 1040, “below the line”.
There are several negatives here. If you weren't already itemizing deductions, by itemizing now you lose the standard deduction that you had before. In 2003 the standard deduction was $4,750 for single filers. If you have $5,000 in winning sessions and $5,000 in losing sessions, you will add $5,000 to your gross income, lose your standard deduction of $4,750 and add a new itemized deduction of $5,000. Although you broke even for the year, your income has increased by $5,000 and your deduction has increased by only $250. Dave Barry would say, “I am not making this up!”
It gets worse. Let's say you are a serious recreational player and play five 4-hour sessions every week, two $15-30 tables at a time. Depending on how you count your sessions, this could be either 5 or 10 sessions per week (the IRS is not clear on the definition of a session, since online poker didn't exist when they wrote up the regulations). Let's say this is 250 sessions per year. Suppose you win 130 of them with an average profit of $1,000 (that's $130,000 in winning sessions) and lose 120 of them with an average loss of $1,000 (that's $120,000 in losing sessions).
The good news is you have a $10,000 net win for the year. Congratulations. The bad news is, the $130,000 you must declare in gross income is going to cost you. First of all, while you can deduct the $120,000 losses, your other deductions will be limited. For example, medical deductions are allowed only so far as they exceed 7.5% of your income, so you have just lost 7.5% of $130,000 = $9,750 in medical deductions. Even deductions like mortgage interest phase out as your income gets higher. You might find you owe the dreaded AMT (alternative minimum tax). You may also lose eligibility to make deductible contributions to IRAs, or to contribute to a Roth IRA at all. All this for winning just $10,000 during the year."
So, in short, you can play where over a years time you take in 130K in prizes But spend 120K to get there
for a 10K profit but
so, im sitting in thr bar, a bit of ooo i am a a hard man bar, piss on the walls type bar, some fella gives me a dirty look, being drunk and coked, i turn around and say. here lad, wtf u want, he mutters something abt him being a hard man, im like huh, dude what the **** u want, the ppls with me want to fight and cause a riot, but like i want a few beers, then that **** swings at me and misses, then mate goes in, graps him by the throat takes him out intot the beer garden and make him say sorry for trying start, he gets 5-7 kicks in the ace, im like, dude forget it, his mate then cames out and starts his weekly swinging, and they end up getting him down and kicking him in the face till he calms down.....WTF IMO