Professional Gambler Salary

A taxpayer was unable to convince the Tax Court that his gambling activity had a profit motive.

1. How I Became a Professional Gambler I had never gambled before and knew nothing about it, but I'd gotten too many e-mails like it. I was at my parents house for winter break during my first year at UT, and I was bored. 'Free $50 just for downloading our casino!' That doesn't seem very risky. I might as well download to see what it's all about.
2. Are no loopholes for the professional gambler; mak-ing the criminal law reflect the aspirations rather than the actual achievable goals of the community which is a characteristic of some of our crimes of sexual immorality; and a failure to revise the crimi-nal law to reflect current opinion as to what con.

There’s no such thing as a professional gambler salary for the majority of players. You might land a sponsorship if you start playing poker at a high level, but it’s not likely for most people. Make sure you have enough set aside to weather losing streaks and rough.

The Tax Court held that the nonwagering expenses of a taxpayer who frequently gambled were not deductible because his gambling activity lacked the profit motive necessary for him to be considered a professional gambler. The court determined the taxpayer's gambling activity lacked a profit motive, after examining the nine factors of Regs. Sec. 1.183-2(b) used to determine whether an activity is engaged in for profit.

Facts: James Boneparte, a resident of Newark, N.J., had worked for the Port Authority of New York and New Jersey since 1981, earning $78,821 in 2012 and $82,350 in 2013. During 2012 and 2013, he frequently gambled in Atlantic City, N.J., spending approximately half of his nights in hotels in Atlantic City. He did not keep a contemporaneous written record of his wagering activity; however, casino statements showed that his wagers exceeded his winnings by $14,887 in 2012 and $12,609 in 2013. When completing his 2012 and 2013 federal income tax returns, he prepared a Schedule C, Profit or Loss From Business, with 'professional gambler' shown as his business or profession. On it, he reported for 2012 and 2013, respectively, $18,000 and $10,000 of gross receipts, offset by $18,000 and $10,000 of wagering losses, and business expenses of $89,116 and $85,783.

In 2014, the IRS sent Boneparte deficiency notices for 2012 and 2013 that disallowed his nonwagering business expenses related to his gambling activity for both years, along with other adjustments. Boneparte petitioned the Tax Court for relief.

Issues: Professional gamblers are allowed to deduct losses from wagering transactions only to the extent of gains from other wagering transactions. However, professional gamblers are also allowed to deduct nonwagering expenses from their gambling activity and create a tax loss. Other gamblers (casual gamblers) include gains from wagering transactions in gross income and deduct losses (to the extent of the wagering gains) from other wagering transactions as an itemized deduction.

To be a professional gambler, the taxpayer must gamble with the intent to make a profit. Regs. Sec. 1.183-2(b) lists nine factors to evaluate whether an activity is undertaken with a profit motive. They are (1) the manner in which the activity is conducted; (2) the taxpayer's expertise; (3) the time and effort spent on the activity; (4) the expectation that the activity's assets will appreciate; (5) the taxpayer's success in other business activities; (6) the activity's history of profit and losses; (7) the amount of occasional profits; (8) the taxpayer's financial status; and (9) the presence of recreational or personal elements related to the activity. Based on these factors, the IRS contended that Boneparte was not a professional gambler but instead a casual gambler.

Holding: The court held that the taxpayer was not a professional gambler after it concluded that eight factors weighed against Bonaparte and one factor (the expectation the activity's assets will appreciate) was neutral. According to the court, the following factors weighed against the taxpayer, thus indicating a lack of profit motive: The taxpayer kept no records other than win/loss statements from the casinos that could be used to test the success of any of his gaming techniques. The taxpayer's purchase of books and videos on how to win at slot machines was no different than a similar purchase by a casual gambler. Despite his frequent gambling, Boneparte gambled only in his spare time and received a great deal of personal pleasure and recreation from his gambling. He had no history of success in other business activities other than his job as a tunnel bridge agent. He gambled from 2009 to 2013, always had losses, and never showed a profit. He had substantial income from another source, his job, and if he were treated as a professional gambler, his tax liability would be reduced greatly.

Because the court held that the taxpayer was a casual gambler in 2012 and 2013, his wagering gains were included in his gross income for each year, and he was allowed an itemized deduction each year for his wagering losses to the extent of the gains included in that year's gross income. The court also held that he was liable for the 20% accuracy-related penalty since he did not seek advice from a tax professional and could not explain how he concluded that he was a professional gambler for 2012 and 2013.

• Boneparte, T.C. Memo. 2017-193

— By Charles J. Reichert, CPA, instructor of accounting, University of Minnesota—Duluth.

So, what exactly is a professional gambler?

A professional gambler is a person who lives from gambling and spends most of his time at the casinos. Professional gamblers are actually earning their paychecks by making the right bets when they play at the live casino tables.

In this article, I will go over some general misconceptions about casino gaming as well as go over a few real-world examples, gathered from several friends of mine who are professional Advantage Players. We won’t give out real names or when these “adventures” occurred, but rest assured this is about as truthful as an accounting of what real-world play is like.

The gambler lifestyle has been portrayed by Hollywood, and more so, by commercials for casinos, to be a glamorous one. Men are always dressed sharply and women are in their best gowns and, both seem to be having a wonderful time. They are winning money, eating at 5-star restaurants and drinking the best champagne.

This is all done to entice the average person to come to the casinos and gamble, but more importantly to lose the maximum amount of money they can. The reality of the casino gaming world is very different.

What Makes a Pro

The term “professional gambler” is sometimes used interchangeably for both people who earn part-time and full-time income through gambling.

But I keep a much tighter definition of a professional gambler.

Real pros not only make a profit through gambling, but enough to pay all of their living expenses. This includes housing, utilities, car payment, insurance, food, clothing and anything else deemed necessary.

A semi-pro is somebody who makes enough to supplement their income but doesn’t earn a full-time living through gambling.

But, when you are on the positive side of the spectrum it’s like taking candy from a jar labeled “free candy”. The hard truth is that the mentality of a professional casino player is equal to a manic depressive.

The gambling world doesn’t offer an abundance of opportunities to make a living, but there are a few different games where you can earn some nice profits. If you play smart and stick to the plan.

Game On

Let’s take a brief look at the most common games that you can make long term profits with and I’ll then go into each with more detail:

• Blackjack
• Daily fantasy sports (DFS)
• Poker
• Sports betting

Blackjack sees you try to win money directly from the house.

Casinos do everything in their power to hinder successful card counters. This includes using continuously shuffling machines, multi-deck shoes, and vigilant security measures.

Anybody who’s caught counting cards is often kicked out of the casino and banned. This is why it’s so important for card counters to blend in with normal players.

DFS and poker both see you compete against your fellow man. The house merely takes a small cut of tournament fees or cash game pots for poker.

Sportsbooks create lines in an effort to get equal betting action on both sides. The sportsbooks make their money by taking 10% juice from the losing group.

Every form of advantage betting has its pros and cons, but the key is that each of these activities offers the chance to make a healthy income.

Counting on It

People have been making a living through card counting since the early 1960s, and despite all the obstacles that casinos have put in players’ way, it remains possible to earn a living with card counting today.

You need a sizable bankroll in order to properly spread your bets and survive variance. The recommended minimum you should aim for is $20,000, but it’s better to have closer to $40,000.

How much you make depends upon several factors, including the following:

• Skill level – Successful counters have between a 0.5% and 1.5% edge on casinos.
• Hands per hour – 50 to 200 depending upon dealer speed & table size.
• Bet spreading – Difference between your lowest and highest bet.
• Deck penetration – The further into the shoe you get, the more confidence you can bet with.
• Counting system – Some systems are more accurate than others.
• Game rules – You want the best rules possible in order to lower the standard house edge.
• Tips – $5 per hour for the dealer is standard.

The final step is to figure out how many hours you’ll play and convert this into an annual salary.

The key is keeping an accurate count amidst casino distractions and blending in with normal players.

Professional Gambler Salary

Fantasy

DFS is the newest game that offers skilled gamblers an opportunity to make money.

Daily fantasy sees you pay an entry fee to enter contests and compete against other players. The goal is to create lineups that score the most points and rank the highest in tournaments.

The truth, though, is that only a small percentage of those who play actually win. A study from 2015 showed that 1.3% of daily fantasy baseball players collect 91% of the winnings.

Saahil Sud, profiled in a WBUR piece, said he made over $3 million in profits in a single year. Former poker-pro Aaron Jones switched over to DFS and won a DraftKings contest worth $5 million in early 2016.

Of course, the average professional DFS player doesn’t earn quite this much. To determine a standard DFS salary, let’s consider the following factors:

• Entries per day— Most DFS pros enter several hundred contests every day.
• Stakes – Typical entry fees range anywhere from $1 up to $1,000.
• Fees— DFS sites tack on a 10% fee to each buy-in, which is where their profits come from.
• Skill level— Some pros have a bigger edge than others.

Of course, DFS is filled with variables, which is why it’s key to have a large enough bankroll to survive the ups and downs.

Pro Sports Gambler Salary

Poker

Poker has long been one of the most viable options for becoming a professional gambler. The reason why is because you’re competing against other opponents instead of the house.

It’s tougher to make a living in poker these days because the strategy is more prevalent. Real money online poker gives players a chance to rapidly accelerate their learning curve by seeing more hands per hour.

You can still become a profitable player with enough hard work and experience though. In fact, some pros still make six or seven-figure annual incomes with the game.

However, the vast majority of pros these days earn between $40,000 and $100,000 per year.

Poker is unique in that there are essentially two types of professionals: tournament and cash game pros.

Let’s look at the different considerations for cash vs. tournament play:

Cash Games

• Profit measured in big blinds (BB) made per hour.
• House takes 5% rake from cash game pots for running games.
• More control over annual salary than tournaments.

Tournaments

• Profit measured by rate of return (ROI) on buy-ins.
• House adds 10% fee to buy ins (e.g. $10 + $1 fee).
• Only the top 10-15% of the field makes money.
• Tournaments have more variance than cash games.

A cash player must figure out what stakes they must play to make a comfortable living based on BB earned per hour.

A tournament pro must decide what buy-in level they must choose to make a high enough ROI to live comfortably.

One more consideration here is whether you’ll dedicate the bulk of your time towards live or online poker.

Online cash games and tourneys offer more volume because you can play multiple tables. Plus hands and tournaments go much faster, giving you an opportunity to boost your hourly wages.

Nevertheless, many players find that their win rate is higher in live games. The most lucrative tournaments are found in land-based casinos, too, such as the World Series of Poker events.

Sports Betting

The good thing about sports betting is that you don’t need to have a massive win rate just to book profits.

Sportsbooks only take 10% juice from the losing side. This differs from DFS and poker tournaments where you must pay an extra 10% fee regardless of whether you’re a winner or loser.

The juice can be lowered or adjusted based on where the sportsbook is trying to push action, but 10% is generally the amount you’ll see taken from the losing side.

Pro sports bettors must be very keen at handling their bankroll since they’re dealing with such small profit margins. They also need to make larger wagers than “Gary the CPA from Ohio” to increase potential profits.

Some sports bettors have made millions of dollars with this model. But the average bettors are looking at more modest salaries ranging from $50,000 to $150,000 annually.

Conclusion

Being a pro gambler has some obvious benefits, including flexible hours, being your own boss, and the ability to increase your income.

Some gamblers, such as Saahil Sud and Bob Voulgaris, have even gotten rich with their skills. Of course, you may be perfectly happy making mid-5-figures, as long as you get to enjoy the aforementioned benefits, but there are also some downsides to be aware of. These include risk, highs and lows, no sick days, and the potential to lose everything.

The potential rewards can be great in the case of card counting, DFS, poker, and sports betting, but you also have to be disciplined and good at handling risk.