Casino Profits taxable or not?

Question

I was wondering if anyone knew if casino profits are taxable in the US. The casinos say no...any thoughts on this?

Answer 1

In the US, all income is taxable unless it is specifically excluded by law or regulation.  

Your gambling winnings are taxable income.  I don't know what casinos you have been communicating with, but if they told you that winnings are not taxable, they are suggesting you commit a crime by breaking tax law. It seems like the sort of thing that an un-trustworthy on-line casino might do.  

There are also provisions in the tax code for foreigners winning in US casinos and for US residents winning in casinos overseas.  

Some people will tell you that there are certain reporting thresholds, but those are the minimum win that requires the casino to report your winnings.  Smaller winnings are still taxable income, even if they are not reported by the casino.

If, on the other hand, you are asking about the profits of the casino, then also yes.  The casino is a business and must pay tax on income on gaming winnings.

Answer 2

A casino like any other business has to pay tax on its profits.  In fact they also have to pay additional gambling taxes above and beyond what a regular business might charge.

No legal business in the US can get away with not paying any tax.

Answer 3

I don't know which casinos you talked to, but in Las Vegas, casinos are taxed very heavily.  They pay a higher percentage than most other businesses do.  Maybe you asked at an Indian casino.  I wouldn't be surprised if they are tax exempt.  They shouldn't be if they are.

Answer 4

Yes, you are required by law to pay taxes on winnings from an online casino.  Online casinos are operated from outside of the US and they do not report winnings to the US government.  But it is your legal obligation to pay the taxes.  

This is actually the point of the US crackdown on online gambling.  By gambling online at an off shore casino the government has no way of keeping track of your winnings.  Therefore it is nearly impossible to track.