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Professional Gamblers Can Now Deduct Business Expenses

By Ian Hiaring, Rakeback.com Poker News Staff Writer

poker-taxIn January, the U.S. Tax Court made a change to a decades-old opinion regarding professional gambling, and expenses that can be deducted to those who declare themselves professional gamblers.

According to the court, expenses associated with gambling can now be written off. The language of the law essentially was changed to define gambling as a business, and as someone who chooses gambling as their profession, that person would be able to deduct business expenses, not unlike any other business.

The case that brought about the change came from a California gambler who listed expenses on his 2001 tax return for things such as automobile and travel, fees for race handicapping information, and other research regarding his profession, gambling.

The change in the tax law will be welcomed by high-end gamblers, but won’t affect the casual player who might think about writing off a plane ticket to Las Vegas as a “business expense”.

"While this is a victory for the professional gambler, this doesn't affect very many gamblers at all," Judy Patterson, the Senior Vice President and Executive Director of American Gaming Association in Washington D.C. said.

"To qualify, gambling really has to be a full-time activity that is the person's principal source of livelihood," Patterson said. "It's a pretty high standard that few will be able to meet."

There’s been no word on whether or not a professional gambler could write off a tournament entry fee, or rake collected by a casino as an expense, but it’s an interesting angle that may become an issue with the change in the tax law.


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