Tipping Handpays

Posted on4/4/2022by admin

Ibeatyouraces

Here it's usually just two slot attendants. One to pay you and the other to verify.

DRich

Here it's usually just two slot attendants. One to pay you and the other to verify.

The third person is usually the one in the cage that issues the cash to the attendants.

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AxelWolf

Tipping slot attendents was appropriate when they had to lug bags of nickles or dollar coins to refill machines. It was also a case where the nickle machines would lock up for handpays of $50. As for a handpay with IRS form, I am not sure I would always tip at $1200. If I was down 1200 at that time. Casinos will issue W-2Gs for winnings greater than $1,200 from a slot machine or $5,000 from poker. The moment you hit the jackpot, a casino staff member will bring the W-2G to you at the machine to get a signature (although new technology is emerging in high limit slot areas that lets players electronically sign the W-2G so they can get back to playing right away). How Much Do I Tip a Housekeeper? Many hotel guests don't consider housekeeping a tip position, so anything you leave a hotel maid is a lot. But a rule of thumb is to tip $2-$3 per night, or more if you're particularly messy, have kids or more than two people in the room, or are in a suite or timeshare with a kitchenette or full kitchen that a housekeeper also has to clean. Hand pays can range from a few hundred dollars to hundreds of thousands. One tipping rate that comes up again and again is $20/$1,000 of winnings. So, if you hit a $4,000 royal flush you'd tip the attendant $80. That seems pretty reasonable to me.

If you're a recreational gambler do whatever you like, tip if you want, stiff if you like. Even If it's $5 they should be happy they got anything.
I get both sides of the slot tipping issue, because I worked in slots for a short period of time making $8 an hour (early 90's), tips helped and I was happy with anything.
I really didn't make a lot from tips, probably $120 a week. There were some tip hustler employees who made at least triple that much. The casino I worked at didn't tolerate tip hustling and management couldn't take tips themselves, they couldn't refuse them either. Management had to give it to the floor and change person who paid the jackpot.
Most of the employees had subtle, and not so subtle ways to extract tip's. They knew when and who to target. Things that would make most of us cringe.
If someone asked me the best machine to play I told them the truth, it's all luck and I don't know. If I knew I would have my friends come play them and split the money. Unfortunately most people don't want to hear that. Some people think employees know what machines are hot.
I don't really like when employees start patting my machine saying,'come on, come on, hit something good, get a royal.' Especially when it's overdramatized and totally fake. I have heard just about everything. People have the balls to say 'good thing I was standing here, because I'm lucky'
I always ask the suit if they can take tips, if they say yes I'll add 25% to 50% more to what I was originally going to tip. I hand it to the suit and tell them to split it.
Honestly I don't think management deserves a tip, however it's just something I feel benefits AP.
Nowadays there's not to many change people around and I'm not sure what a slot floor person makes per hour.
Does anyone know what they make?
I don't have a set certain percentage I tip, it all depends on the situation and what I'm playing. I think $10 per thousand is adequate. Generally I'm capping it at $100, if I hit for 10k - 40k they get $100. There's situations where I would give more.
If the play is really juicy i'm going to over tip.
If someone like a family member hits a 4k RF while on vacation I'll suggest $20 to $40.

♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪

GWAE

My last 2k hand pay I tipped $40. I thought it was adequate. My local hand pays on 1k royals so that always leaves me in a sticky situation. The last one I tipped $20 but it was in 2 $10s so it felt like more.
I was listening to a podcast recently, it may have been dancer but I can't remember. I can't remember exactly what he said but it was something like the tip should be under .5% or you are going to kill your ev. I would rather not tip at all than tip $10 on 4k. Tipping Handpays

Expect the worst and you will never be disappointed. I AM NOT PART OF GWAE RADIO SHOW

PokerGrinder

In most jurisdictions it is a requirement to have three people involved in a jackpot. There are some exceptions for restricted locations and very small ones that may not have enough employees working,

The two government casinos here both have just a slot attendant do a hand pay and these casinos are definitely not small. The Indian casino just outside the city however has a manager present for all hand pays.

You can shear a sheep a hundred times, but you can skin it only once. — Amarillo Slim Preston

I was listening to a podcast recently, it may have been dancer but I can't remember. I can't remember exactly what he said but it was something like the tip should be under .5% or you are going to kill your ev. I would rather not tip at all than tip $10 on 4k.

That couldn't be more wrong, at least for anyone who's playing something with a decent edge. If he's talking about himself, grinding out stupid sh** like $1 10-play 9/6 DDB UX with a 0.15% advantage on 2x days (or whatever the hell it is)....then yeah, it's gonna hurt you.....but you should t even be playing stupid awful games like that to begin with.
Imagine, if you tipped 10% (yes, ten percent) on all handpays on $1 9/6 JOB. Only handpay is a RF. Royal is worth 2% (TWO PERCENT) of your return. Tipping away 10% of 2% is a grand-smacking total of 0.2%!!!! If 0.2% means THAT MUCH to your game, well, you're not playing a good game.
Granted, I'm not saying you should tip 10% as I think that's too much IMO, but it goes to show how little impact a 10% JP tip actually 'hurts' you.
Saying your tip should be less than 0.5% or else you're gonna kill your EV is beyond laughable.
Of course, not everyone plays $1 9/6 JOB. But if you're worried about 'killing your EV', you should try running the VP calculator with adjusted payouts for tips for the game you decide to play. ie: if you tip $10 on a $1,250 HP on $5 9/6 DDB, then change the 5 thru K's 4oak from paying 50 to 49.6....and adjust the other payouts according to how much you'd tip. Then see for yourself how much (or, in the most likely scenario, how little) tripping hurts you.

ChampagneFireball

I don't think I'd pay anything if it was an Indian casino though because I don't think that Indian tribes deserve the entitlement to have gambling in the first place.

You aren't tipping the casino, you are tipping the person that works there. If you have a problem with the casino, don't frequent it.

petroglyph

I don't think I'd pay anything if it was an Indian casino though because I don't think that Indian tribes deserve the entitlement to have gambling in the first place.

How dare those godless heathens try to climb out of poverty after we stole the country fair and square.

AxelWolf

$40 ON 2K is probably a bit much for someone like you (someone with kid's, trying to play smart, and you seem to be frugal) $20 would make them happy.
Again, it really depends on what your playing, if you are only getting handpays on Royals it isn't going to cut into your EV much. If you are playing with a .2 edge you probably have to be frugal.
Imagine playing .50 full time and tipping $40 a pop, that's over 2k per year, so imagine what your kids could do with that extra money when they got 16 had you put $30 of it in the bank.
I disagree with zero over $10. Sure it's kinda cheap, but They get stiffed regularly so $10 they should be ok with that.

AxelWolf

How dare those godless heathens try to climb out of poverty after we stole the country fair and square.

Perhaps they should have learned to bargain a just little better with Manhattan ☺.
Ya, ya, I know that's probably all fiction.

Jan 30 '18 at 17:09

Tax Advice for Casino Players: W2-G Handpay Jackpots, Filing as a 'Pro' and More

The feeling of stress and anxiety that comes when filing taxes can be overwhelming for anyone, but especially for casino players that hit slot jackpots or enjoy other high stakes gaming.

Everyone has a different opinion about how to file, and there are very few resources available that give gamblers peace of mind. That’s why I recently sat down with Ray Kondler of Kondler & Associates. Ray is a Certified Public Accountant based in Atlantic City and Las Vegas.

He’s also one of the top national experts on gambling taxes.

While Ray works closely with the World Series of Poker, he also serves slot and table players in all 50 states. In our fascinating conversation, Ray gave us the insider’s look at gambling taxes, keys for minimizing the chances of an audit, and tips for paying as little as possible… while staying within the bounds of the law, of course!

Here are the highlights from our great conversation. (You can also watch or listen to the full episode below.)

The First Thing Gamblers Should Know About Taxes

One of the most common questions new gamblers ask is, “When do I have to report my winnings?” The answer actually varies depending on what you play.

Casinos will issue W-2Gs for winnings greater than $1,200 from a slot machine or $5,000 from poker. The moment you hit the jackpot, a casino staff member will bring the W-2G to you at the machine to get a signature (although new technology is emerging in high limit slot areas that lets players electronically sign the W-2G so they can get back to playing right away). The casino sends a copy of all W-2Gs to the IRS.

(Table game players don't face the same level of scrutiny. Casinos don't issue W-2Gs for table games like craps and blackjack.)

Did you know that the IRS matches up the W-2Gs the casino sends with your tax return?

This is extremely important! If you fail to file those winnings on your tax return, in most cases, the IRS will send a notice asking you to amend your return.

Want to protect yourself from an audit? Download our FREE Casino Player's Logbook to start keeping better records of your gambling activity.

As Ray points out, this practice isn’t limited to land-based casinos. Cruise lines also issue W-2Gs, and US Citizens are required to pay tax on gambling income earned worldwide — not just in the US.

The bottom line is, if you receive a W-2G, don’t ignore it. The IRS sure won't...

Once gamblers know which winnings to report, the next question is usually, “How do I minimize my tax bill?”

Filing as a Professional Gambler

When Ray sits down with a client, one of the first decisions they make is whether the player should register as a professional gambler.

Most slot players wouldn't even think of filing as a professional. (To be honest, I didn't even know that was an option before speaking with Ray). For slot players, especially retirees or those with limited other income, filing as a professional gambler comes with a unique set of advantages.

In most states, a normal casino player (aka amateur gambler) can only write off casino losses up to their total winnings. So, for example, if you have $100,000 in W-2G winnings, but lost $150,000 during the year, you can only write off $100,000 of losses when filing taes.

***Note: some states (Connecticut, Illinois, Indiana, Massachusetts, Michigan, West Virginia, and Wisconsin) do not allow amateur gamblers to deduct gambling losses from their winnings. The only way around this is to file as a professional and deduct losses as an “expense of doing business” on a Schedule C.

On the other hand, a professional gambler can deduct other expenses associated with their casino play (it's a JOB after all - ha!). If they have $100,000 in W-2Gs, they can write off $100,000 in losses AND subscriptions to gambling resources, travel and meal expenses, home office expenses, and legal/professional fees. Professionals can then actually show a net loss on their Schedule C (Self-Employment) tax return and deduct it against their other income (like taxable Social Security income).

Tipping How Much To Tip

So who can qualify as a professional?

It turns out, qualifying as a pro isn’t based on winnings. It’s actually based on how much time someone spends gambling. Someone who plays slots five or six hours per day and has no other job could most likely file as a professional. This is especially useful for gambling retirees!

When advising retired clients, Ray recommends filing as a professional as soon as their Social Security income is taxable (over $40,000). This allows any below-the-line gambling losses to reduce taxable income.

Filing as a professional makes sense for many casino players, but there also are a few downsides to be aware of.

First, filing as a professional increases your chances of being audited.

Another downside is if you file as a professional and win a significant amount, you’ll have to pay Social Security tax.

Depending on the amount of Social Security tax, it may be smarter to file as an amateur. This is something Ray and his team help their clients figure out. They’ll complete the tax returns both as a professional and as an amateur. Then they will see which filing status makes the most sense for the client for that particular year.

It’s also worth noting that filing as either a professional or amateur one year doesn’t lock you in to that status for following years. For example, let’s say you filed 2016 tax return as an amateur gambler. In 2017, you gambled the same amount of time, but due to an increase in winnings, it makes more sense to file as a professional. This is allowed by the IRS. You can decide which filing status is right for you on a year to year basis.

How to Protect Yourself From a Tax Audit

While casual and moderate gamblers have a relatively low chance of being audited, the prospect of being audited is stressful for anyone. Ray says the most important thing you can do to protect yourself is to keep good records.

It might be a pain in the neck, but everyone should keep clear, detailed records — especially if you’re filing as a professional.

Ray recommends using a dedicated credit/debit card to charge all gambling-related expenses. Then keep track of all gambling activity with a logbook.

Want to protect yourself from an audit? Download our FREE Casino Player's Logbook to start keeping better records of your gambling activity.

Most of Ray’s clients log their activity in a spreadsheet at the end of the week, but he has many clients that keep daily records. While there are several logging apps available to gamblers, they tend to be clunky or difficult to use. Some clients use old-fashioned pencil and paper, but Ray recommends keeping a spreadsheet.

The team at Kondler & Associates have even created several logbook spreadsheet templates they send to their clients to simplify the process.

Some gamblers think of keeping logbooks as an unnecessary step. Instead, they simply rely on the win-loss statements casinos send out to their loyalty club members. This can be effective, but any gambling done at other casinos (where they don’t have a loyalty card), isn’t reflected in those statements.

Tipping Handpays

By keeping a logbook, you can ensure your losses at any casino (even those where you aren’t a loyalty member) are accounted for in your taxes. This lowers your tax bill and protects you

Ray also points out that even if you failed to keep a good logbook in the past, you can go back and recreate it. In the event of an audit, the IRS can request ATM receipts to prove your records are accurate. But if you claim to have gambled with cash from a safe deposit box, no one can prove otherwise.

Another thing to consider for slot players is how to handle the tax liability from a 'group pull'jackpot (for those that don't know, this is where a group pools money and hits the high limit slots in search of JACKPOTS). Let's say you and four other players decide to throw equal money into a pot and hit the high-limit slot rooms. If the group hits the jackpot, only ONE person will sign the W-2G, meaning that person accepts all of the tax liability (even though they only took 20% of the winnings!).

The way to avoid getting stuck footing the entire tax bill is to document the payouts with 1099s. If you win a big jackpot in a group pull, make sure to gather the other players’ full names, addresses, and Social Security numbers before handing out the money. Then issue a 1099 to each player for their share of the winnings.

If you do the extra step of issuing 1099s to the people in the winning group pull, then when you file your taxes, you can feel comfortable only claiming your 20% take of the jackpot on your tax return because you'll have a nice paper trail to show the IRS if they come sniffing around.

Comps and the IRS

When casinos issue comps, gamblers can potentially receive incentives worth thousands upon thousands of dollars. So, how does the IRS tax these comps?

The short answer is they don’t tax comps.

In over 30 years of working as a CPA, Ray has never seen a 1099 issued for comps. This would be a record-keeping nightmare for casinos if they had to document every meal or lodging comp for tax purposes.

He has seen 1099s issued for prizes though. For example, if there’s a drawing and you win $2000, you’ll receive a 1099 for “other income”. This is also true for prize winnings like free cars or other expensive merchandise. While it’s different from a W-2G, it’s still required to report on your taxes, but these are extraordinary circumstances.

Regarding normal comps, there’s no need to report them as income.

Professional Help for Gambling Taxes

Whether you’re a slot player, table gamer, or poker player, there’s a good chance you’d rather spend your time playing than worrying about taxes.

There are a lot of extremely talented CPAs all around the country, but many don't have a clue how to minimize tax winnings because they rarely see it. Ray's team works on minimizing tax exposure from gambling winnings all day every day

So, if you have any questions about gambling taxes, feel free to reach out to Kondler & Associates HERE. They never charge for calls or emails, and they’re extremely quick to reply. They’re an incredibly valuable resource, so don’t hesitate to reach out. For more on Ray and his firm Kondler & Associates, visit KondlerCPA.com.

Want to protect yourself from an audit? Download our FREE Casino Player's Logbook to start keeping better records of your gambling activity.

2 Comments

FEB 3 '18

I'd like to add a little color to this article by pointing out a few changes that will go into effect for the 2018 tax year as a result of the new tax bill. Professional gamblers used to be able to deduct expenses as well as offset winnings with losses. The new way, their deduction is capped at the amount of winnings. More significantly, for mid-rollers like myself (I do $4,000 - $5,000 a day coin on slots over about 28 days a year in Vegas; some years I have no handpays and some years I have a few) - while it is true that winnings can still be offset with losses if you itemize, because of the increase in the standard deduction as well as the elimination of the personal exemption(s) and capping of property/state tax deduction at $10,000, the threshold for itemizing has basically been doubled. Whereas in the past, I have always been able to totally offset W-2G winnings with losses, with the new law and my current level of still allowed itemizable deductions (mortgage interest and property/state income tax) I would now have to have at least $12,000 in W-2Gs to be able to itemize, and even then, I would still end up paying Fed taxes on that first $12,000. Finally, with respect to group pulls - I've organized several and I have always been lucky to have a UK resident participating who is not subject to taxes OR withholding. Under the new tax law, I will not do one unless that condition is present. I'm not saying you shouldn't do one, they're a lot of fun, but if you do, make sure you consider the tax implications and discuss how you are going to handle a handpay with the participants ahead of the event. Hitting a big win and then determining that 12% or 22% or more is going to have to come off the top is not going to be a welcome surprise to the group.

FEB 6 '18