# Foreigners winning money in Vegas **URL:** \ **Category:** Factual Questions\ **Created:** [April 20, 2008, 9:08pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152 "2008-04-20T21:08:01Z")\ **Posts on this page:** 12\ **Page:** 1
**Author:** ![Neptunian\_Slug](https://avatars.discourse-cdn.com/v4/letter/n/ce7236/32.png) [@Neptunian\_Slug](https://boards.straightdope.com/u/Neptunian_Slug)\ **Post date:** [April 20, 2008, 9:08pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/1 "2008-04-20T21:08:01Z")
So my brother-in-law is visiting from overseas and I will be taking him to Vegas for some gambling and fun. Lets say that he beats the odds and wins a million bucks from a slot machine. How does the casino take care of the tax issue? I assume that they will withhold some of the winnings to send to the IRS, but how much? If they take too much, does he have the right to fill out a tax return and get the rest back? ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [April 20, 2008, 9:36pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/2 "2008-04-20T21:36:13Z")
In theory, if he’s from a country that has a tax treaty with the US excluding gambling winnings, he can fill out an IRS form called W-8BEN (Certificate of Foreign Status), and prevent the withholding. Otherwise, they will withhold the standard amount, and he has to file a 1040NR or 1040NR-EZ to get a refund. ---
**Author:** ![Colophon](https://avatars.discourse-cdn.com/v4/letter/c/f05b48/32.png) [@Colophon](https://boards.straightdope.com/u/Colophon)\ **Post date:** [April 21, 2008, 11:30am UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/3 "2008-04-21T11:30:59Z")
Does the UK have such a treaty with the US? (Incidentally, I’m amazed Americans stand for being taxed on gambling and game-show winnings - isn’t it bad enough that the house has an edge, without then having to give up a big chunk of whatever you do manage to win? In the UK, gambling (and game-show) winnings are tax-free.) ---
**Author:** ![Dead\_Cat](https://avatars.discourse-cdn.com/v4/letter/d/9fc29f/32.png) [@Dead\_Cat](https://boards.straightdope.com/u/Dead_Cat)\ **Post date:** [April 21, 2008, 12:26pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/4 "2008-04-21T12:26:50Z")
In general, anything that can be taxed as a gain can be used to offset tax if there is a loss. I believe that is the case with gambling winnings/losses in the US. This being the case, a gambler who also earns an income/has other capital gains may actually benefit under the US system, as opposed to that in the UK where gambling losses cannot be used to offset other taxable gains. Anecdote: an acquaintance of mine told a story of how he won a large poker prize in a US casino. The casino wanted to pay him the amount net of tax. Our hero, as a non-US-taxpayer, insisted they pay out every last cent of the full amount, which they apparently did, reluctantly. This was probably several years ago, however, and may have been embellished. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [April 21, 2008, 4:18pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/5 "2008-04-21T16:18:37Z")
[QUOTE=Colophon] Does the UK have such a treaty with the US? (Incidentally, I’m amazed Americans stand for being taxed on gambling and game-show winnings - isn’t it bad enough that the house has an edge, without then having to give up a big chunk of whatever you do manage to win? In the UK, gambling (and game-show) winnings are tax-free.) [/QUOTE] Yes, the US does have a [tax treaty](http://www.irs.gov/businesses/international/article/0,,id=169552,00.html) with the UK. It has one with many countries where there’s a lot of international financial activity and foreign travel. With Canada and Belgium for sure, and lots of others as well. Ed ---
**Author:** ![Sunspace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sunspace/32/1250_2.png) [@Sunspace](https://boards.straightdope.com/u/Sunspace)\ **Post date:** [April 21, 2008, 4:56pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/6 "2008-04-21T16:56:58Z")
[QUOTE=suranyi] Yes, the US does have a [tax treaty](http://www.irs.gov/businesses/international/article/0,,id=169552,00.html) with the UK. It has one with many countries where there’s a lot of international financial activity and foreign travel. \*\* With Canada and Belgium for sure, \*\*and lots of others as well. [/QUOTE] So does that mean I _wouldn’t_ get taxed in Vegas, because I don’t get taxed on lottery winnings here in Ontario? [sub]Not that I’ve ever won more than twelve bucks at one go… :: mutter :: grumble :: [/sub] ---
**Author:** ![Chez\_Guevara](https://avatars.discourse-cdn.com/v4/letter/c/aeb1de/32.png) [@Chez\_Guevara](https://boards.straightdope.com/u/Chez_Guevara)\ **Post date:** [April 21, 2008, 5:01pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/7 "2008-04-21T17:01:35Z")
[QUOTE=Colophon] Does the UK have such a treaty with the US? [/QUOTE] Described [herein](http://www.networkmanagementguide.com/taxes/Gambling_winnings_international_taxpayer.htm) is the procedure for obtaining prior exemption from payment of casino tax at source. If an international tax identification number is not held by a UK citizen then tax is withheld at 30% and a refund form must be filed as indicated by **yabob**. However, and I’m unsure of the date applicable to the linked piece, it further states as follows: > [@](#): > > To alleviate this filing burden on foreign individuals, IRS is putting in place administrative procedures that will allow certain withholding agents, who also are acceptance agents and who make unexpected payments to foreign individuals, to apply for and obtain an individual taxpayer identification number (ITIN) for such individuals on an expedited basis. Note also that: > [@](#): > > Most gambling winnings are subject to reporting on Form 1042-S. However, proceeds from a wager placed in blackjack, baccarat, craps, roulette, or big-6 wheel are not amounts subject to reporting. ---
**Author:** ![Colophon](https://avatars.discourse-cdn.com/v4/letter/c/f05b48/32.png) [@Colophon](https://boards.straightdope.com/u/Colophon)\ **Post date:** [April 21, 2008, 7:17pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/8 "2008-04-21T19:17:46Z")
[QUOTE=Dead Cat] In general, anything that can be taxed as a gain can be used to offset tax if there is a loss. I believe that is the case with gambling winnings/losses in the US. This being the case, a gambler who also earns an income/has other capital gains may actually benefit under the US system, as opposed to that in the UK where gambling losses cannot be used to offset other taxable gains. [/QUOTE] Seriously? So say I’m a US citizen and earn $100k this year, I could claim I have a gambling habit and lost $50k, and I’ll only get taxed on $50k? :dubious: Unless casinos hand out receipts every time you sit down and buy in, I can’t see how this is policed. ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [April 22, 2008, 12:14am UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/9 "2008-04-22T00:14:47Z")
Gambling winnings aren’t taxed as gains - they are taxed as income. You may deduct losses, but only up to the amount of gambling income. IRS topic 419: > **[Topic no. 419, Gambling income and losses | Internal Revenue Service](https://www.irs.gov/taxtopics/tc419)** > > Topic No. 419 Gambling Income and Losses > [@](#): > > You may deduct gambling losses only if you itemize deductions. Claim your gambling losses as a miscellaneous deduction on Form 1040, Schedule A (PDF). However, the amount of losses you deduct may not be more than the amount of gambling income you have reported on your return. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [April 22, 2008, 3:32am UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/10 "2008-04-22T03:32:44Z")
[QUOTE=Colophon] Unless casinos hand out receipts every time you sit down and buy in, I can’t see how this is policed. [/QUOTE] Well, they are not going to just take your word for it. You have to have [some record of your losses](http://www.irs.gov/publications/p529/ar02.html#d0e1980): > [@](#): > > Diary of winnings and losses. You must keep an accurate diary or similar record of your losses and winnings. > > Your diary should contain at least the following information. > > The date and type of your specific wager or wagering activity. > > The name and address or location of the gambling establishment. > > The names of other persons present with you at the gambling establishment. > > The amount(s) you won or lost. > > Proof of winnings and losses. In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. > > For specific wagering transactions, you can use the following items to support your winnings and losses. > > These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. They are not all-inclusive. Your tax liability depends on your particular facts and circumstances. > > Keno. Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records. > > Slot machines. A record of the machine number and all winnings by date and time the machine was played. > > Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc.). The number of the table at which you were playing. Casino credit card data indicating whether the credit was issued in the pit or at the cashier’s cage. > > Bingo. A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Supplemental records include any receipts from the casino, parlor, etc. > > Racing (horse, harness, dog, etc.). A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Supplemental records include unredeemed tickets and payment records from the racetrack. > > Lotteries. A record of ticket purchases, dates, winnings, and losses. Supplemental records include unredeemed tickets, payment slips, and winnings statements. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [April 22, 2008, 4:20pm UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/11 "2008-04-22T16:20:28Z")
[QUOTE=Sunspace] So does that mean I _wouldn’t_ get taxed in Vegas, because I don’t get taxed on lottery winnings here in Ontario? [sub]Not that I’ve ever won more than twelve bucks at one go… :: mutter :: grumble :: [/sub] [/QUOTE] If you want information on the US-Canada tax treaty, here it is. (Warning: PDF) > **[p597.pdf](https://www.irs.gov/pub/irs-pdf/p597.pdf)** > > 2008.63 KB I am a little familiar with some provisions because my father gets retirement income from both Canada and the U.S. and the treaty indicates how that situation is handled. Ed ---
**Author:** ![Lakai](https://avatars.discourse-cdn.com/v4/letter/l/9de0a6/32.png) [@Lakai](https://boards.straightdope.com/u/Lakai)\ **Post date:** [April 23, 2008, 12:13am UTC](https://boards.straightdope.com/t/foreigners-winning-money-in-vegas/446152/12 "2008-04-23T00:13:42Z")
[QUOTE=Colophon] Seriously? So say I’m a US citizen and earn $100k this year, I could claim I have a gambling habit and lost $50k, and I’ll only get taxed on $50k? :dubious: Unless casinos hand out receipts every time you sit down and buy in, I can’t see how this is policed. [/QUOTE] In NYC you can apparently pay less tax on your lotto winnings if you show them a stack of losing tickets that you purchased. I think it only works on lotto winnings and not on your total income. I learned all this from gamblers while I operated the lotto machine. So I could be very wrong.