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Playing Overseas / No taxes?

Topic closed. 22 replies. Last post 11 years ago by goldrush.

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cleveland
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Posted: May 9, 2006, 4:52 am - IP Logged

 There are lots of online casinos based outside the USA.  I understand that casino winners have to pay taxes on their winnings if your playing in the USA . But I heard if you are living in the USA and your playing at an overseas casino that you do not have to report your winnings to the IRS.  You are playing overseas over the internet, so if you win, US tax laws dont apply in this case.  Because the casino thats paying you is overseas, so the US tax law does not apply to you.  Sounds too good to be true so I don't think this is true is it?

  I do not know does this qualify as "income tax?"  So if you cash a check from an online casino there is obviously going to be a record of the transaction at the bank (even if you cash it at a grocery store).   I still can't get a straight answer if we are expected to pay tax on winnings from overseas casinos.  Everyone says vague answers like "Its up to you to consult a tax expert" or " We do not give any tax advice" .   I could see if you are playing at a US based casino but not if your playing overseas.  So I will assume that if you win at an overseas casino and they send you a check that you dont have to report those winnings as income?

 

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    cleveland
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    Posted: May 9, 2006, 5:07 am - IP Logged

      I forgot to mention I asked a similar  question a few months back  and got some really good responses and they were very helpful.  But at that time I just wanted to know how much a person would have to pay if they won the regular US state sponsored lotteries or Casinos in the usa.  So now I just wonder if a person is expected to report winnings if they won while playing online at overseas casinos whether they are playing blackjack, poker, or whatever.

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      Posted: May 9, 2006, 11:44 am - IP Logged

      "Online is just a river full of suckers" . . Dirty Poker

        dvdiva's avatar - 8ball

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        Posted: May 9, 2006, 9:23 pm - IP Logged

        Online casinos and lotteries are two very different things. I get tickets occationally though PTS (the link to the left about Euromillions). It's the UK lottery and to claim a large prize I'd have to fly out to the UK. This is also the offical UK lottery so it has the sanction of the government and is tax-free because of it. Online casinos are usually ran offshore in very small countries or very poor countries by mostly US owners. You don't fly anywhere to claim anything. I wouldn't trust most of them with anything more than a single pick 4 striaght ticket. To me they're a suckers bet. But to each their own. You would be lucky to even see the money let alone declare it to the IRS.

          savagegoose's avatar - ProfilePho
          adelaide sa
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          Posted: May 10, 2006, 9:42 am - IP Logged

          here in australia, our lotto is said to be tax free. but that is the jackpot. we actually pay 1/11th of the entry straight to the gov.

          so all entrants pay the tax on the lotto, and the winner gets prize tax free.

          o well they always gets their cut. 

            Todd's avatar - Cylon 2.gif
            Chief Bottle Washer
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            Posted: May 10, 2006, 10:27 am - IP Logged

            "Online is just a river full of suckers" . . Dirty Poker

            Very interesting article!

             

            Check the State Lottery Report Card
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              Posted: May 11, 2006, 1:00 am - IP Logged

              << I do not know does this qualify as "income tax?" >>

              Which part of "income" isn't clear?

              << This is also the offical UK lottery so it has the sanction of the government and is tax-free because of it. >>

              Being an offical government  lottery has nothing to do with it, and the UK government can't exempt anyone from another government's taxes.  They, and the governments of other countries that offer Euromillions, are free to make winnings exempt from their own taxes, but that's it. If you win and you're a citizen or resident of a country that doesn't exempt the winnings then the winnings aren't tax-free.

                justxploring's avatar - villiarna
                Wandering Aimlessly
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                Posted: May 11, 2006, 1:57 am - IP Logged

                 So I will assume that if you win at an overseas casino and they send you a check that you dont have to report those winnings as income?

                 

                Any income earned, whether here or abroad is taxable as long as your residence is in the United States and you are a citizen. That also includes winning lotteries or gambling abroad. Even if you live outside of the United States for a short time, you can't avoid paying tax. People often open offshore accounts or leave the country to avoid paying tax if they inherit or win money, but they also get caught by the IRS.  I doubt if a small amount would be reported, but there are IRS agents all over the place and they also have paid informants. Unfortunately, corporations get away with tax evasion and cruiselines that earn billions from mostly American tourists register in foreign countries to get away with it too. Doesn't quite seem fair to me.

                BTW, I read an article about a man who won the lottery and collected as many "losing" tickets as he could from the trash, mostly scratch tickets. He went a little overboard and got caught, but I thought it was an interesting idea, not that I condone cheating on your taxes.

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                  Poway CA (San Diego County)
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                  Posted: May 11, 2006, 4:24 am - IP Logged

                  The IRS regulations state that you have to report all income.  The winnings from playing Pick 3 and Pick 4 from places like betslips.com is not reported to any government agency unless you get a transfer of $10,000 or more to a bank in the United States (lump sum that is).  So most of us do not report it.  Are we breaking the law?  Yes. 

                  Looking at what I just provided and comparing the answers you are getting from the casinos and online lottery places, I think you can see why they say do what you feel is right!! 

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                    cleveland
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                    Posted: May 11, 2006, 7:16 am - IP Logged

                     I thought even though betslips and a few other places dont report winnings to  agencies, If they are transferring money into your bank account or you cash a check from them, what would keep the IRS from noticing that  your having money put in your bank account?  I thought even if there just small amounts  of money, there would still leave a papertrail a mile long anytime your having money put into a bank account. Maybe I misunderstood.   It would be best if Betslips paid the winners in cold hard cash delivered by FedEx if the prize is under $500.  After all the state lotteries pay cold hard cash when you just win $500 or less, why can't Betslips do that?  Obviously with a larger prize they couldn't. 

                      Anytime a person cashes a check (even if it's only $50)  you have to show ID so you know all that stuff goes into the computer database and goes on file.  even if you cash it at a grocery store, they dont just give people  money and not copy down their name and address. 

                      And people playing the pick 3/4 lottery online  have to pay almost half of your winnings  in taxes, unless some people dont report it?  It's no wonder the major Online pick 3/4 lottery sites  have to pay almost twice as much as state lotteries.  I mean if you win $900  and you have to give about half of it to taxes, your still ending up with about what you would get if you just won in your state lottery.  When people play in their own state lottery at the local store and they win the pick 3 for under $500, nobody reports those winnings.  But when you play online and they have to transfer money into your bank account, you have to report those winnings if I understood correctly. 

                     

                     

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                      cleveland
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                      Posted: May 11, 2006, 7:26 am - IP Logged

                      I used to think that pick 3/4 winners that won prizes under $500 did not have to report winnings at all. 

                        justxploring's avatar - villiarna
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                        Posted: May 11, 2006, 8:37 pm - IP Logged

                        Brett, that's really not true.  If you asked the IRS they'd say if you make $100 shoveling snow, you are supposed to report it as income. Some people think that the $600 or under rule means that it's not taxable. But let's say you were lucky enough to win $550 10 times in a year. That doesn't mean that a person who won $5,550 should pay tax and you don't need to because you won on different tickets. It only means that you are not required to fill out forms that are sent to the IRS. So if you never sign your tickets and win less than $600, nobody will ever know. The chances of being audited are slim, but if some picayune IRS agent wants to investigate, it's possible that someone might be fined, although I've never heard of that happening. I don't see how they can trace something like that unless the store asks you to sign your ticket (do they?) and they are used as receipts to collect the money from the lottery. Since I never won much, I have no idea. Maybe someone else here can elaborate.

                        I've had this discussion at some jobs in the past. When I worked on commission I would receive bonus money from various places. Most people don't think they need to report "extra" income that comes from manufacturer's incentives because they made less than $600, but that's not true at all. After all, they could be making $500 from 3 or 4 different suppliers. Or someone could earn $599 and then work somewhere else and make $500. You still need to list everything when you file. I guess it comes down to if you want to take the risk and if you think your extra income is traceable, but the $600 law applies to the payor not the payee. Everyone is supposed to self-report all income.

                          LOTTOMIKE's avatar - cash money.jpg
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                          Posted: May 11, 2006, 8:44 pm - IP Logged

                          got a very interesting question.........

                          lets say i get 2,000 put wired into my bank account by betslips.does the IRS look for things like this?

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                            Poway CA (San Diego County)
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                            Posted: May 11, 2006, 8:48 pm - IP Logged

                            got a very interesting question.........

                            lets say i get 2,000 put wired into my bank account by betslips.does the IRS look for things like this?

                            No.  Title 18 says $10,000 or more.

                             

                              LOTTOMIKE's avatar - cash money.jpg
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                              Posted: May 11, 2006, 10:11 pm - IP Logged

                              thanks califdude.got to make sure i don't hit too many one dollar straights online.9,000 is pretty close to 10,000.....