Hold Gambling Definition

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The activity or practice of playing at a game of chance for money or other stakes. The act or practice of risking the loss of something important by taking a chance or acting recklessly: If you don’t back up your data, that’s gambling. Tap Out: Losing all the bankroll while gambling which also means the end of the gambling session for that player. Tells: Behaviors or actions of a player or a dealer which reveal the cards that they hold. Third Street: The first round of seven-card stud poker. The name stems from the fact that players possess 3 cards in this round.
*Gambling Addiction Definition
If the first year of legal sports betting in New Jersey has proved one thing it’s that there’s a market for it.
NJ sportsbooks took in upwards of $3 billion in bets in year one.
Year two should prove even bigger now that the market has grown to include 10 retail sportsbooks at Atlantic City casinos and NJ racetracks. Plus, 14 different NJ sports betting apps and more preparing to launch.
Clearly, it’s more than just professional handicappers driving this new NJ sports betting market. People who have never placed a sports bet and don’t exactly speak sports betting are doing it, too.Removing barriers
That’s partly because NJ sports betting apps and self-serve sports betting kiosks at retail sportsbooks have helped remove one major barrier to market entry.
Having to visit a betting window to place a bet can be intimidating. But for the most part, NJ sports betting apps and self-serve sports betting kiosks eliminate the need to do it.
However, another major barrier to market entry may still exist.
The language used at the window is a big part of why visit one can be so intimidating. There’s a sports betting jargon employed by operators and veteran sports gamblers that may sound like it takes years to perfect.
While some NJ sports betting apps and sports betting kiosks have done away with this complicated language in favor of something even novice sports bettors can understand, much of it is still exists.
However, it’s really nothing to be afraid of. You too can speak sports betting.
The language of sports betting is rooted in common sense. Plus, those who show a desire to learn can easily understand it.
A little refresher on the meaning of some of the most common sports betting terms is usually all that’s required. Start with the three terms described below and you’ll speak sports betting like a pro in no time.Odds
Odds are basically a numeric expression of a team or individual’s chances of winning. NJ sportsbooks generally post what are referred to as moneyline odds, American odds or US odds. Sportsbooks use the odds posted at the time you placed a bet to determine how much to pay out when that bet wins.
Odds are posted with either a plus [+] or minus [-] symbol in front of a number. The plus symbol indicates that team or individual is an underdog and the number is how much each $100 bet on that side will pay.
The minus symbol indicates that team or individual is a favorite and the number is how much you’ll need to bet to win $100.
Sportsbooks also return the original bet to winners in both these cases.
For example, FanDuel Sportsbook is currently offering +280 odds on the Los Angeles Lakers to win the 2019-20 NBA Championship. That means a $100 bet on the Lakers would pay $280 plus the original $100 bet back if they win the title next season.
Similarly, DraftKings Sportsbook is currently offering -121 odds on the Chicago Cubs to beat the Pittsburgh Pirates on Monday night. That means you’d have to bet $121 on the Yankees to win $100 and your original $121 back.
Sportsbooks may also refer to odds as the price offered on a bet.Handle
Handle is a sports betting term referring to the total amount of money bet at a sportsbook, group of sportsbooks, on an individual event or group of events.
That $3 billion in bets taken by NJ sportsbooks in year one mentioned above is the NJ sports betting industry’s first-year handle.
Of course, handle is an industry term you don’t necessarily need to know to place bets. However, it’s not a bad idea to seek out some information about the industry you’re betting in. Knowing this term is as good a place to start as any.
Handle is not revenue. Revenue is what sportsbooks have left over from handle once all winning bets have been paid.
Another example of handle is the $34.8 million in Super Bowl bets NJ sportsbooks took in this past February. One might say NJ’s 2019 Super Bowl handle was $34.8 million.
One can also look at May 2019 numbers released by the state’s Division of Gaming Enforcement and see that NJ sportsbooks posted $318.9 million in monthly handle.Hold
Hold is essentially the amount of handle sportsbooks keep after they pay out winning bets. The industry also refers to hold as win or revenue.
Once again, hold is an industry term you don’t necessarily need to know to place bets. However, the more informed you are about the industry the better choices you can make inside of it.
Hold can tell you how much money a particular sportsbook is making before taxes and other expenses. A number that you might want to consider when it comes time to choose a place to bet.
One reason a sportsbook could have a higher hold percentage than a competitor may be less competitive odds.
Those May 2019 numbers released by the state’s Division of Gaming Enforcement mentioned above list hold as sports wagering revenue.
Operators running under the Meadowlands license, including FanDuel Sportsbook, are leading the industry so far this year. These operators have posted a combined $53.4 million in sports wagering revenue.
Those operating under the Resorts Digital license, including DraftKings Sportsbook and BetStars NJ, are running a distant second. These operators have posted $26.7 million in sports wagering revenue so far this year.
No other NJ sports betting licensee has posted more than $10 million in hold so far this year.
By Brad Polizzano, J.D., LL.M., New York City

Totaling a taxpayer’s Forms W-2G, Certain Gambling Winnings, for the year would seem to be the straightforward way to determine the amount of gambling winnings to report on a tax return. Forms W-2G, however, do not necessarily capture all of a taxpayer’s gambling winnings and losses for the year. How are these amounts reported and substantiated on a tax return? Does the answer change if the taxpayer seeks to make a living as a poker player? Do states tax gambling differently?
There are many nuances and recent developments under federal and state tax laws about gambling and other similar activities. With proper recordkeeping and guidance, a taxpayer with gambling winnings may significantly reduce audit exposure.Income and Permitted Deductions
Under Sec. 61(a), all income from whatever source derived is includible in a U.S. resident’s gross income. Whether the gambling winnings are $5 or $500,000, all amounts are taxable.
A taxpayer may deduct losses from wagering transactions to the extent of gains from those transactions under Sec. 165(d). For amateur gamblers, gambling losses are reported as an itemized deduction on Schedule A, Itemized Deductions. The law is not as kind to nonresidents: While nonresidents must also include U.S.-source gambling winnings as income, they cannot deduct gambling losses against those winnings. Nonresidents whose gambling winnings are connected to a trade or business may deduct gambling losses to the extent of winnings, however, under Sec. 873.
Case law and IRS guidance have established that a taxpayer may determine gambling winnings and losses on a session basis.
Neither the Code nor the regulations define the term ’transactions’ as stated in Sec. 165(d). Tax Court cases have recognized that gross income from slot machine transactions is determined on a session basis (see Shollenberger, T.C. Memo. 2009-306; LaPlante, T.C. Memo. 2009-226).What Is a Session?
In 2008, the IRS Chief Counsel opined that a slot machine player recognizes a wagering gain or loss at the time she redeems her tokens because fluctuating wins and losses left in play are not accessions to wealth until the taxpayer can definitely calculate the amount realized (Advice Memorandum 2008-011). This method is also recognized in both Schollenberger and LaPlante, as a by-bet method would be unduly burdensome and unreasonable for taxpayers. To this end, the IRS issued Notice 2015-21, which provides taxpayers a proposed safe harbor to determine gains or losses from electronically tracked slot machine play.
Under Notice 2015-21, a taxpayer determines wagering gain or loss from electronically tracked slot machine play at the end of a single session of play, rather than on a by-bet basis. Electronically tracked slot machine play uses an electronic player system controlled by the gaming establishment—such as the use of a player’s card—that records the amount a specific individual won and wagered on slot machine play. A single session of play begins when a taxpayer places a wager on a particular type of game and ends when the taxpayer completes his or her last wager on the same type of game before the end of the same calendar day.
A taxpayer recognizes a wagering gain if, at the end of a single session of play, the total dollar amount of payouts from electronically tracked slot machine play during that session exceeds the total dollar amount of wagers placed by the taxpayer on the electronically tracked slot machine play during that session. A taxpayer recognizes a wagering loss if, at the end of a single session of play, the total dollar amount of wagers placed by the taxpayer on electronically tracked slot machine play exceeds the total dollar amount of payouts from electronically tracked slot machine play during the session.
There is little to no guidance defining a session for other casino games, such as poker. Furthermore, because there are different poker game formats (cash and tournament) and game types (Texas hold ’em, pot limit Omaha, etc.), it is unclear whether the one-session-per-day analysis would apply to poker in general. A taxpayer who plays different types of poker games may have to record separate sessions for each type of poker game played each day.
In a 2015 Chief Counsel memorandum (CCM), the IRS concluded that a taxpayer’s multiple buy-ins for the same poker tournament could not be aggregated for purposes of determining the reportable amount on a taxpayer’s Form W-2G (CCM 20153601F). This analysis implies that the IRS may view each poker tournament buy-in as a separate gambling session. A key point leading to the conclusion was that the buy-ins were not identical because the tournament circumstances were different each time the taxpayer made an additional buy-in.Requirement to Maintain Accurate Records
In Rev. Proc. 77-29, the IRS states that a taxpayer must keep an accurate diary or other similar record of all losses and winnings. According to Rev. Proc. 77-29, the diary should contain:
*The date and type of the specific wager or wagering activity;
*The name and address or location of the gambling establishment;
*The names of other persons present at the gambling establishment; and
*The amounts won or lost.
It is hard to believe the IRS would disallow a taxpayer’s gambling loss deduction solely because the taxpayer did not write down in her diary the names of other persons at her blackjack table. The IRS does acknowledge that a taxpayer may prove winnings and losses with other documentation, such as statements of actual winnings from the gambling establishment.Special Rules for Professional Gamblers
The professional gambler reports gambling winnings and losses for federal purposes on Schedule C, Profit or Loss From Business. A professional gambler is viewed as engaged in the trade or business of gambling. To compute business income, the taxpayer may net all wagering activity but cannot report an overall wagering loss. In addition, the taxpayer may deduct ’ordinary and necessary’ business expenses (expenses other than wagers) incurred in connection with the business.
Whether a gambler is an amateur or a professional for tax purposes is based on the ’facts and circumstances.’ In Groetzinger, 480 U.S. 23 (1987), the Supreme Court established the professional gambler standard: ’If one’s gambling activity is pursued full time, in good faith, and with regularity, to the production of income for a livelihood, and is not a mere hobby, it is a trade or business.’ The burden of proof is on the professional gambler to prove this status.
Despite receiving other forms of income in 1978, Robert Groetzinger was held to be a professional gambler for the year because he spent 60 to 80 hours per week gambling at dog races. Gambling was his full-time job and livelihood. Notably, Groetzinger had a net gambling loss in 1978. Thus, actual profit is not a requirement for professional gambler status.
In addition to applying the standard established in Groetzinger, courts sometimes apply the following nonexhaustive nine-factor test in Regs. Sec. 1.183-2(b)(1) used to determine intent to make a profit under the hobby loss rules to decide whether a taxpayer is a professional gambler:
*Manner in which the taxpayer carries on the activity;
*The expertise of the taxpayer or his advisers;
*The time and effort the taxpayer expended in carrying on the activity;
*Expectation that assets used in the activity may appreciate in value;
*The taxpayer’s success in carrying on other similar or dissimilar activities;
*The taxpayer’s history of income or losses with respect to the activity;
*The amount of occasional profits, if any, that are earned;
*The financial status of the taxpayer; and
*Elements of personal pleasure or recreation.
What if a professional gambler’s ordinary and necessary business expenses exceed the net gambling winnings for the year? In Mayo, 136 T.C. 81 (2011), the court held the limitation on deducting gambling losses does not apply to ordinary and necessary business expenses incurred in connection with the trade or business of gambling. Therefore, a professional gambler may report a business loss, which may be applied against other income from the year.Limitations on Loss Deductions
Some states do not permit amateur taxpayers to deduct gambling losses as an itemized deduction at all. These states include Connecticut, Illinois, Indiana, Kansas, Massachusetts, Michigan, North Carolina, Ohio, Rhode Island, West Virginia, and Wisconsin. A taxpayer who has $50,000 of gambling winnings and $50,000 of gambling losses in Wisconsin for a tax year, for example, must pay Wisconsin income tax on the $50,000 of gambling winnings despite breaking even from gambling for the year.
Because professional gamblers may deduct gambling losses for state income tax purposes, some state tax agencies aggressively challenge a taxpayer’s professional gambler status. A taxpayer whose professional gambler status is disallowed could face a particularly egregious state income tax deficiency if the taxpayer reported on Schedule C the total of Forms W-2G instead of using the session method under Notice 2015-21. In this situation, the state may be willing to consider adjusting the assessment based on the session method if the taxpayer provides sufficient documentation.Changes Ahead Likely
Tax laws addressing gambling and other similar activities will continue to evolve as new types of games and technologies emerge. Some related tax issues that will come to the forefront include session treatment for online gambling activity and whether daily fantasy sports are considered gambling. As more and more states legalize online gambling and daily fantasy sports, Congress or the IRS will have no choice but to address these issues.
EditorNotes
Mark Heroux is a principal with the Tax Services Group at Baker Tilly Virchow Krause LLP in Chicago.
For additional information about these items, contact Mr. Heroux at 312-729-8005 or mark.heroux@bakertilly.com.Gambling Addiction Definition
Unless otherwise noted, contributors are members of or associated with Baker Tilly Virchow Krause LLP.
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