After an abbreviated event at the end of 2021, the World Series of Poker is back to its full slate of live and online events in 2022. Things will look a bit different this year, as it will mark the first year the series moves to the strip. Both Bally’s and Paris will play host to all of the live action and, as always, we will be there for the duration of the event.
Before heading to the WSOP, here are a few things to consider:
Maintain Accurate Records
The WSOP is almost two months long. During that time, most players will play countless tournaments and cash game sessions in multiple casinos. Nearly all of this is funded in cash, carried between venues to buy into events and to pay for gambling-related expenses (such as meals). Add in borrowing/lending and staking other players, cash is moving frequently and it’s tough to track.
Create a paper trail whenever possible! Track cash game sessions in a logbook or app, note the date (and to whom) money is lent or borrowed, send confirmation texts when you swap or buy action, purchase meals and other expenses using your credit card and keep (or take pictures of) receipts from cash purchases. It may seem like an extra burden, but it will make your tax situation much easier to summarize once the series is over. We have seen many players fail to track losses and expenses because they are having a losing year, only to win an event, leaving them scrambling to recreate their summer and undoubtedly missing untracked expenses.
Send us an email and we can share an excel version of a gambling logbook. If you prefer, you can make your own spreadsheet or you can track your play using an app. You can even track everything manually in a notebook.
If you have additional questions, please reference our gambling tax FAQs.
Understand Backing Consequences
If you are backing another player (or selling action) be aware of the tax implications. Some situations can end up being rather complex, but in general, you can follow these guidelines:
If you are a U.S. citizen or resident and you are backing another U.S. citizen or resident, your stakee will most likely request a completed Form W-9 and issue you a 1099-MISC for your portion of the winnings. If you are backing a non-U.S. citizen or resident, they will have 30% withheld (unless there is a treaty exemption), but will not be required to issue you a tax form.
If you are a U.S. citizen or resident and you are being backed by another U.S. citizen or resident, then you will most likely need to issue Form W-9 to each backer before you pay you them. You will keep a copy of each W-9 so you can issue Form 1099-MISC to your backers at the end of the year. If you are being backed by a non-U.S. citizen or resident, then you may have a responsibility to withhold 30% of their winnings (unless exempt by treaty). This includes remitting the money to the IRS and completing Form 1042-S and Form 1042 at the end of the year.
Whether a tax form is received or not, you are still required to include all backing income in your gross gambling winnings. Again, it is important to keep records because you will be able to deduct all backing losses as well. If you are paying a backer, the preferred method is always via bank transfer. However, since cash is preferred during the WSOP, if you pay a backer in cash, have them sign something stating the amount, date and time the money was received and keep it for your records.
The term “satellite” gets used pretty loosely in the poker community. Multiple events can be referred to as satellites, yet they can have different tax consequences. Let’s play out a few scenarios below:
- You win a satellite at the WSOP and receive lammers. This is not considered gambling winnings, as the lammers have no cash value. You can only use them to buy in to other WSOP events in that year. In the past, players were able to “swap” lammers for cash with other players (this would be a taxable event), but Caesars has begun to regulate this activity in an effort to comply with Anti-Money Laundering laws. When using the lammers as a buy-in, all money won in that event becomes taxable income. If you do not cash the event, there are no gross winnings. Your gross loss is the cost of the initial satellite.
- You win a seat on WSOP.com. Similar to a satellite, this is not considered gambling winnings. The stated prize is a seat in a WSOP event, which is non-transferrable and has no cash value. When using the seat as a buy-in, all money won in the event becomes taxable income. If you do not cash the event, there are no gross winnings to report. Your gross loss is the cost of the initial satellite.
- You win a seat through a local poker club. This is considered gambling winnings. The winner of the event received cash winnings. Although the money is intended for a WSOP buy-in, the prize is cash and the winner is not precluded from keeping the money to spend as they see fit. However, if they do enter an event, the buy-in is a gambling loss. If you do not cash the event, you have gross winnings and losses that cancel to zero.
Our booth will be located in Paris, outside the main cage and registration area. If you have any gambling, sports betting, DFS, or general tax questions, please stop by the booth and we will let you know how we can help. We will also be playing in a variety of events throughout the series, so there is a good chance you will see us at the table!