The tournaament rules for the LVH baccarat tourney says:
"All tournament prizes can be paid 'gross' in full value promotional
chips or net less the corresponding federal taxes."
At another place the rules state: "Withholding taxes will be
collected upon issuance of prize money as required by applicaable
taxes."
My question is: Are prizes paid in 'full value promotional chips'
treated differently by the IRS than prizes that are paid in cash? If
so, what is the effect of the difference for tax purposes?
Thanks