Since I'm cross-posting this, let me recap for those hearing about this for the first time: the original post on AtlanticCityGamblers in some way referred to a _specific_ dollar amount of $8.00 that was received as an additional amount of 'cashback' -- apparently as some sort of a bonus 'cashback' program as opposed to what I am accustomed to hearing about (multipliers such as 2x, 3x, etc.). When I asked and received some clarification, it appeared to me that what was meant was actually "bounce back", instead of what it had been originally referred to -- "cash back". However, it has been further clarified and might be appropriately categorized as a mixture of the two, I suppose. But the ensuing discussion has caused me to wonder about tax treatment on the subject, which is why I have taken the liberty of changing the subject line and cross-posting to try to find an answer; this was after I first asked 'Jeff' for his permission. This, then is the last post in the original thread, and my response then follows it; I will appreciate and welcome any clarification. Thanks.
Jeff wrote (on 'AtlanticCityGamblers@yahoogroups.com'):
I'm not even sure what the difference in(the usage of) the two terms
(cash-back & bounce-back) is. If I get money cuz I played enough to
get a certain amount of money last trip, I consider it "cash back". And if just having a card from a particular casino AND using/swiping
it on a particular day(s) gets me money, I consider that "cash back"
too.Maybe it's just me, but I don't see a reason to distinguish between
the two. Particularly since if I walk up to the kiosk @Showboat(or
any other casino) and it tells me I have $18 in my account($10 from
my last day's play there and $8 "Bonus" cash), it's ALL going the
same place!However, if there's some reason to distinguish between the 2 types
of "refunds" that I'm not aware or thinking of, I'm all ears.
First, I wasn't, of course, making a big deal about the difference, which I do think is a little bit more than just semantics; I was just a bit confused and so I asked a question. Your point, Jeff, is well-taken and has been made in a polite way (I note the wink), and so we are just continuing to have a civil discussion on the finer points of casinos and gambling.
Although I now realize that there is less of a distinction in handling of money in the particular case originally discussed, the primary reason I made the distinction at all is that it has been made as long as I've been a member of several other gambling groups (well over a year on most of them) -- although perhaps that distinction is made more consistently in some groups then in others. I haven't kept track of what is said on which groups. VPFree has a glossary which identifies the abbreviations "BBC" (bounce back cash) and "CB" (cash back). Of course, perpetuating something just because it's always been done that way is not a good excuse, but once certain terminology becomes customary, switching it does sometimes present problems in communication -- such as what happened when I read the original post and was confused by it. Anyway, most of the folks I know do seem to make the distinction. Perhaps some folks from VPFree can explain any reasons that I fail to cover.
On the practical side, there are two reasons that come to my mind for making the distinction. The first is _possibly_ taxes; I emphasize the word "possibly" because I'm not an accountant -- I'm just a lawyer. Hopefully there will be someone in this group who is qualified to give a definitive answer on the subject, but just in case I'm going cross-posting this message to a couple of other groups to reach a larger number of readers (VPFree and ACVPP). The reason I just suggest that there might be a difference 'taxwise' is because I would think that 'cashback' would figure into your taxes whereas 'bounce back' would not.
This is my reasoning: while I realize that 'cashback' is not taxable as 'winnings', I would suspect on the other hand that it certainly ought to be considered as diminishing your losses. I realize that this is a trivial figure for most of us, but let's take the case of a professional gambler who in the course of a year has a coin-in of a million dollars (not very much when you think about it because with a full one-percent edge over the casino with advantage play, that is expected to earn only ten grand per year). If that professional gambler is rated for .5% cashback, then the total amount of cashback is five grand, and I think at that point the IRS might take an interest as to how that amount is treated. So now we have a player who is itemizing his/her return, after having kept scrupulous records, and they offset their winnings with their losses. What are their losses? Just their 'coin-in'? ... or is it their 'coin-in' minus their 'cash back'? I _think_ it would be the latter, just using common sense ... but I've been wrong about lots of things, so I hope someone will address that for us. Now, in regard to 'bounce back', I might also be wrong about how that is treated, but logically it seems to me to be a simple 'gift' which would make it non-taxable to the recipient. But let me clarify that I am speaking now about what has commonly been referred to as 'bounce back', i.e., a check in the mail which is only good for a certain time, but which does not require you to actually gamble to redeem it. It comes in the mail, you take it to the casino and cash it, and then leave if you want ... although I can't imagine that you will keep getting those checks without some recorded play despite what another poster has indicated in another thread/mailgroup.
I suppose that you could also look at 'cash back' in another way, although probably not really accurate, and that is this: the casino has actually committed itself to you, as a member of the slot club, that if you will put 'x' amount of 'coin in' through their slots/machines, you will be _entitled_ to receive 'y' percentage of it back. So, unless I'm mistaken, 'cash back' is actually an _entitlement_, of an actually _known-percentage_, that you are guaranteed to receive (unless you let it lapse by failing to claim it). 'Bounce back', on the other hand, _seems_ to me to be absolutely discretionary ... and even unpredictable. My check amounts vary from month to month, and they don't seem to correlate very well with the amount that I gambled on my last visit. And when, out of sheer curiousity, I actually asked a casino employee about how the amounts of such 'checks' is determined, I was told (right or wrong) that there is no set percentage, and that it just varies depending upon their marketing considerations. And then add to that the fact that there have been a number of times (I hate it, but it's happened), where I just haven't been able to get to the casino during the stated time-frame to be able to cash my check, and those funds were just lost.
This, then, brings me to a more cogent point: for gamblers (VP players in particular) who can determine exactly what their expected return is for any given machine, and knowing the exact percentage of cash back that they can _count_on_ , that info can be used to determine what their real adjusted ER is for that game, and they can accurately calculate 'risk of ruin' and bankroll requirements. There might be some folks who gamble so much and so consistently that they can count on an exact amount of 'bounce back' arriving each month like clockwork, and they will be much more certain of actually redeeming it. But I am not in that category, and so I 'count on' my exact percentage of 'cash back', but I just ... hope ... when it comes to 'bounce back'.
By the way, I haven't been keeping track of my 'free' drinks, 'free' meals, or 'free' rooms ... because I've thought of them as non-taxable gifts. Are they actually taxable instead, and should I be keeping a record of that stuff, too?
Thanks.
Bill Velek