OT: Online Poker

[flere-imsaho]

I was looking here (http://www.gambling-law-us.com/) and note that in a number of states, including Illinois - where I live, Online gambling is prohibited.

Based on this, I ask two questions of those in the know here:

1. What's your view on the legality of online gambling (i.e. poker) and if you do play, how comfortable are you with it?

2. What's your view on taxes vis-a-vis your winnings?

To date I've not played enough to either win or lose too much, so these questions haven't troubled me overmuch, but I wonder what other folks think.

[mhass]

1. Like anything else with the internet, the rules are necessarily different, but since Illinois has riverboat gambling, it's a bit disingenuous to prohibit online gambling. I'm reluctant to endorse making it so accessible, but people need to take responsibility for themselves.

2. Like all double-taxation, I think you've paid taxes on the money you wagered. It should be yours, just like the losses. I HATE that states have aligned themselves with the interests of casinos by taxing the pants off earnings. The states are actually encouraged to promote gambling which is not a good thing.

[flere-imsaho]

Very thoughtful, and I agree with you on both points.

As an addendum, how do people feel about this, personally? I.e.:

1. If you're in a state that supposedly bans Internet Gambling, do you worry?

2. What do you do about your winnings vis-a-vis taxes?

[albionmoonlight]

1. Like all double-taxation, I think you've paid taxes on the money you wagered. It should be yours, just like the losses. I HATE that states have aligned themselves with the interests of casinos by taxing the pants off earnings. The states are actually encouraged to promote gambling which is not a good thing.
I beleive, though I could be wrong, that you are allowed to decrease your income by money that you have lost gambling. If so, that at least is consistent--though what happens in reality is that big winners have to pay taxes because the casinos need to report them, and players who go to Vegas and lose $500 don't think to decrease their income by that amount, so the governement does get to double tax some money in effect.

Farrah or Quik or another person with actual knowledge of tax law/policy could probably shed more light on it.

[cartman]

I beleive, though I could be wrong, that you are allowed to decrease your income by money that you have lost gambling. If so, that at least is consistent--though what happens in reality is that big winners have to pay taxes because the casinos need to report them, and players who go to Vegas and lose $500 don't think to decrease their income by that amount, so the governement does get to double tax some money in effect.

Farrah or Quik or another person with actual knowledge of tax law/policy could probably shed more light on it.

You can deduct the amount you've lost, up to the amount you won. So if you lose $20K, but only win $1K, $1,000 is the amount you can deduct.

[Radii]

In terms of tax reporting, the consensus that i have read appears to be that you are supposed to report every winning session as income, and then deduct every losing session.

If you don't itemize, then you just have a shitton of extra income. If you win a net of $1,000, in winning sessions of $5,000, and losing sessions of $4,000, but you dont' itemize, really all you can do is claim $5,000 more income.


I am not 100% sure on that though.


In terms of my personal views on online gambling, I think attempts to ban it are pretty much bullshit.

I understand that I am taking a risk by gambling online, but it is one i feel reasonably safe in being a smaller stakes gambler and beign part of such a booming crowd of potential lawbreakers.

[mhass]

Regardless of the policy now, I think your money is your money. You shouldn't be able to deduct losses or have to pay taxes on winnings.