Oklahoma Law Review Volume 70 Number 3 2018 Taxation of Gamblers: The House Always Wins Christine Manolakas Follow this and additional works at: https://digitalcommons.law.ou.edu/olr Part of the Gaming Law Commons, Taxation-Federal Commons, and the Tax Law Commons Recommended Citation Christine Manolakas, Taxation of Gamblers: The House Always Wins, 70 OKLA. L. REV. 553 (2018), https://digitalcommons.law.ou.edu/olr/vol70/iss3/1 This Article is brought to you for free and open access by University of Oklahoma College of Law Digital Commons. It has been accepted for inclusion in Oklahoma Law Review by an authorized editor of University of Oklahoma College of Law Digital Commons. For more information, please contact
[email protected]. OKLAHOMA LAW REVIEW VOLUME 700000000000000000 SPRING 20180000000000000000 NUMBER 3 TAXATION OF GAMBLERS: THE HOUSE ALWAYS WINS CHRISTINE MANOLAKAS* Abstract Gambling is everywhere. Whether it takes place in a casino, on the internet, or even on a cell phone, there is no shortage of venues for the avid gambler. With the rapid expansion and geographical spread of gambling activities in the United States and abroad, gamblers must understand the tax consequences of their gaming. For the professional, expenses incurred in his or her occupation are deductible but, like losses from wagering transactions, are limited to wagering gains. Recreational gamblers can also deduct wagering losses to the extent of gains, but expenses incurred in pursuit of their pastime (or compulsion) are nondeductible personal expenses. Explored in this Article are such topics as the computation and characterization of wagering gains, the treatment of cancellation of gambling indebtedness, the deductibility and substantiation of wagering losses, the classification and taxation of professional and amateur gamblers, the use of other tax entities to maximize the wagering loss deduction, and the deductibility of the cost of charity lotteries and raffles.