Uncle Sam Wants Your Tourney Winnings

The United States government has set March 4, 2008 as the date on which casinos and cardrooms must start withholding 25 percent of a player’s winnings if they cash in a poker tournament for $5,000 or more.   

Of course, U.S. citizens are supposed to report gambling winnings on their tax returns, but most casual gamblers and poker players never even think about it.  After all, besides professionals, who goes to Las Vegas, plays a little poker, and records their wins and losses for tax purposes?  Now, just like with paychecks, the taxes will be taken out right away, before you leave the casino. 

For professional players, this isn’t necessarily bad, as it makes paying taxes easier, although that’s less money that can stay in one’s bankroll or at least earn interest.  But for casual players, this just means less money to enjoy at the end of the day, since in reality, these players probably don’t report the winnings.