Question For The Pros

[Finn Dog]

This question is aimed at some of our resident BJ pros (or tax pros for that matter):

Regarding taxes: I know losses do not carry over and can only be offset against gains in any given tax year.

But what about deductions? Do you guys get to deduct your airfare, hotel, and car rental (or mileage if driving). What about meals while on BJ "business trips"?

I suppose any other expense necessary to operating your business (such as telelphone expense) applies just like with any other small business?

Thanks in advance!

FD

 

[KenSmith]

Yes, you can deduct expenses like any other business if you file Schedule C.

Now, whether your aggregate total after deducting expenses is allowed to be negative, I'm not sure. Fortunately I've never had that problem.

It would seem likely that you could have gambling losses less than (or equal to) your wins, yet also deduct expenses that show a loss overall for tax purposes. Sounds like possible trouble though.

 

[shadroch]

If you declare yourslf a professional gambler, you can deduct these items, but the IRS is very strict about who qualifys as a pro. If you work ,even part time, in a non-gambling related field you won't qualify. At least that is what I gather from reading Jean Scotts book on taxes and gambling.

 

[Finn Dog]

Now, whether your aggregate total after deducting expenses is allowed to be negative, I'm not sure. Fortunately I've never had that problem.

Yes, the IRS allows net losses for a business for up to three years (presumably to help one while they grow their business). If you can't turn a profit after three years, they consider it a hobby and won't allow any future deductions related to that failed business.

I believe they won't go back and retroactively disallow the previous three years--but one might have to prove that the failed business was legitimate through an audit, however.

 

[Finn Dog]

Just thought of something else relating to offsetting losses with gains within a tax year: how do you prove BJ losses (or show gains) if playing anonymously as most pros do?

(You obviously wouldn't have any casino year-end tax statements, only your own Excel spreadsheet.)

And what about a bank account--how's that styled/set up: DBA, any special type of account, etc?

Thanks in advance,

FD

 

[Sharky]

This question is aimed at some of our resident BJ pros:

Regarding taxes: I know losses do not carry over...

Pros NEVER lose.:laugh::laugh::whip:

 

[Finn Dog]

Pros NEVER lose.:laugh::laugh::whip:

Actually, despite a decent EV of 2 units per hour, the odds are even a pro who puts in the requisite hours will have a losing year one out of four years because of negative variance!

 

[1357111317]

Actually, despite a decent EV of 2 units per hour, the odds are even a pro who puts in the requisite hours will have a losing year one out of four years because of negative variance!

This is completely false. This means that there is a 25% chance of a pro losing over a year. That means they didn't even hit the N0. Unless your N0 is 300k a pro card counter might lose 1 out of 100 years.

 

[Finn Dog]

This is completely false. This means that there is a 25% chance of a pro losing over a year. That means they didn't even hit the N0. Unless your N0 is 300k a pro card counter might lose 1 out of 100 years.

Really?

This is a quote from Ian Andersen from Burning The Tables In Las Vegas. I figured he knew his stuff being a pro.

I'll see if I can track the page number down later.

 

[Finn Dog]

This is completely false. This means that there is a 25% chance of a pro losing over a year. That means they didn't even hit the N0. Unless your N0 is 300k a pro card counter might lose 1 out of 100 years.

Found it, here's the clarification (yes, my citation was off by a bit) and Andersen's quote verbatim.

Now granted, Andersen's UG has a higher variance, but here's what he says on p. 158 of BTTILV 1st Edition:

"despite a win rate of 2 units per hour, a player using my Ultimate Gambit strategy and playing 500 hours a year has a one chance in six of having a losing year. Put another way, a player using this strategy has a 50-50 chance of having a losing year in the next four. You need to be psychologically and financially prepared for this."

FD

 

[1357111317]

He is playing a horrible game then. He is basically saying he has a 13% chance of a losing year ( Same chance of being down if you reach your N0).

500 hours a year times and 100 hands an hour is a N0 of 50k. That is horrible. Even if he is crawling along at 50 hands an hour thats still an N0 of 25k hands. That still isn't that great.

And also 500 hours in a year is only 10 hours a week. I'm sure most pros would play at least 1000 hours in a year. The odds of having a losing year is probably more like 1 in 20 or 1 in 30 for these players.

 

[SleightOfHand]

He is playing a horrible game then. He is basically saying he has a 13% chance of a losing year ( Same chance of being down if you reach your N0).

500 hours a year times and 100 hands an hour is a N0 of 50k. That is horrible. Even if he is crawling along at 50 hands an hour thats still an N0 of 25k hands. That still isn't that great.

And also 500 hours in a year is only 10 hours a week. I'm sure most pros would play at least 1000 hours in a year. The odds of having a losing year is probably more like 1 in 20 or 1 in 30 for these players.

He is. There has been studies done on Anderson's Ultimate Gambit. It destroys a majority of the EV. It is not suggested.

 

[Finn Dog]

He is playing a horrible game then.

An EV of 2 units an hour is a horrible game?

Here's a look at the numbers behind the sim Stanford Wong ran for the book based on dollars won per 100 rounds with $100 minimum bets for a 6D game with standard Strip rules:

Correct Hi-Lo:

Win rate: $245/hr, Standard Deviation: $4,928/hr, % Return: .89

Ultimate Gambit:

Win rate: $207/hr, Standard Deviation: $5,586/hr, % Return: .62

Andersen justified giving up $37/hr for the significant casino cover provided by the seven major misplays of the Ultimate Gambit. Even so, 2 units an hour ain't bad--especially at Black.

He went on to say there are ways to further improve the above hourly earnings expectation based on data obtained from Stanford Wong's simulations such as:

1. Playing double-deck instead of 6-deck--he said that would crank it up by $90 per hour per $100 unit and reduce the SD from $5,586 to $5,050.

2. For shoe games, leaving 75% of those shoes when the TC is -2 or less would save a player $25 per hour. And if that same player left all shoes when the TC is -2, that would save $50 per hour.

All in all, I think Andersen is a successful pro who's done and seen it all over the many decades of his career. You evidently don't agree with him--and that's fine. We CAN agree to disagree--and debate is good for this forum as long as it's done is a respectful fashion as you've demonstrated.

Good cards,

FD

 

[FLASH1296]

To give credit where credit is due, Anderson did us a boon when he spread the word far and wide about his cover play and camofl' techniques.

BUT that was then and this is now.

Surveillance is far more sophisticated then they were then, and they have read the books.

A casino does not care if you're giving up part of your edge, they will bar you if you are moving your money with the count.

 

[SleightOfHand]

An EV of 2 units an hour is a horrible game?

Here's a look at the numbers behind the sim Stanford Wong ran for the book based on dollars won per 100 rounds with $100 minimum bets for a 6D game with standard Strip rules:

Correct Hi-Lo:

Win rate: $245/hr, Standard Deviation: $4,928/hr, % Return: .89

Ultimate Gambit:

Win rate: $207/hr, Standard Deviation: $5,586/hr, % Return: .62

Andersen justified giving up $37/hr for the significant casino cover provided by the seven major misplays of the Ultimate Gambit. Even so, 2 units an hour ain't bad--especially at Black.

He went on to say there are ways to further improve the above hourly earnings expectation based on data obtained from Stanford Wong's simulations such as:

1. Playing double-deck instead of 6-deck--he said that would crank it up by $90 per hour per $100 unit and reduce the SD from $5,586 to $5,050.

2. For shoe games, leaving 75% of those shoes when the TC is -2 or less would save a player $25 per hour. And if that same player left all shoes when the TC is -2, that would save $50 per hour.

All in all, I think Andersen is a successful pro who's done and seen it all over the many decades of his career. You evidently don't--and that's fine. We CAN agree to disagree--and debate is good for this forum as long as it's done is a respectful fashion as you've demonstrated.

Good cards,

FD

Grosjean also did a test of the power of the "Ultimate Gambit." Results:

No Cover
2 decks play all - 2.82 units/100 hands
6 decks play all - .91 units/100 hands
6 decks backcounting - 1.4 units/100 hands

Ultimate Gambit
2 decks play all - 1.42 units/100 hands
6 decks play all - .48 units/100 hands
6 decks backcounting - 1.1 units/100 hands

The cost of the gambit ranges from 21.5% to 50%. ew.

 

[Finn Dog]

Grosjean also did a test of the power of the "Ultimate Gambit."

So who's right and who's Wong? :laugh:

It's the old Catch 22 of Expert A vs. Expert B.

Statistics. Go figure.

FD

 

[shadroch]

Grosjean also did a test of the power of the "Ultimate Gambit." Results:

No Cover
2 decks play all - 2.82 units/100 hands
6 decks play all - .91 units/100 hands
6 decks backcounting - 1.4 units/100 hands

Ultimate Gambit
2 decks play all - 1.42 units/100 hands
6 decks play all - .48 units/100 hands
6 decks backcounting - 1.1 units/100 hands

The cost of the gambit ranges from 21.5% to 50%. ew.

The difference is that playing all with no cover will get you barred in short order. Anderson maintains that using the UG will allow you to play undisturbed.
It's the old tortise vs hare scenerio. Having a big advantage only works when you are actually able to play.

 

[Billy C1]

The difference is that playing all with no cover will get you barred in short order. Anderson maintains that using the UG will allow you to play undisturbed.
It's the old tortise vs hare scenerio. Having a big advantage only works when you are actually able to play.

The only reason you would play all would be for cover, I think.

BillyC1

 

[SleightOfHand]

The difference is that playing all with no cover will get you barred in short order. Anderson maintains that using the UG will allow you to play undisturbed.
It's the old tortise vs hare scenerio. Having a big advantage only works when you are actually able to play.

The hare always wins. Have you seen tortoises move? They're not winning any races :lol: kidding aside, if you are giving up 50% of your EV in cover, I would rather reduce my unit size and play with less cover (although this is just theory since I have no experience with high stakes play). Baby hares beat fat tortoises

 

[Cardcounter]

Unless your playing for thousands of dollars a hand you aren't taxed on blackjack winnings you are only taxed if you get a long shot payout like a 600 to 1 payout. They start filling out forms if you cash out more than $2,500 at a time. If you have a huge session you might want to cash out for less and carry your chips to another casino to buy in there. As far as the IRS is consurend you always lose more than you win. It is gambling nobody ever wins at gambling other than people who are investors like the casino owners.