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online gambling success

WakeDogg said:
was playing online poker last night (on Bodog). put in $200 into my account. was playing $1-2NL and doing well so i kicked up the stakes. kept doing well, so i kept going up stakes. then i took my winnings and played some online blackjack with continued success.

in the end, i finished with $10,021. no joke.

200 bucks to over 10k in about 2 hours. drinks on me...
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I only talk about my wins.
 
InTheKnow said:
In theory you should report but I believe you would have no federal liability. On the other hand, they rarely audit people making under 40k.
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Tax nerd alert:

Actually, a higher percentage of returns for people reporting no AGI or AGI between $1 and $25,000 are audited than for people reporting AGI between $25,000 and $50,000; $50,000 and $75,000; $75,000 and $100,000; and $100,000 and $200,000. But, audit rates are basically irrelevant if you don't file a return.

The technical answer is that wakedogg is required to report this income on a federal income tax return and whether he would actually have any federal tax liability would be based on a number of factors, a big one would be whether he is claiming himself (in which case, the standard deduction and personal exemption would almost assuredly make it so that he wouldn't owe any tax) or whether his parents claim him as a dependent (no exemption and possibly a lower standard deduction).

What I think you guys are getting at is that the chance of the IRS discovering this income if there was no 1099 issued, no bank deposit over $10,000, and no return filed is about the same as the IRS discovering the cash that you were paid for babysitting. However, that doesn't change what is required by law. Moreover, when giving tax advice (for the record, this does not constitute and should not be considered to be tax advice), a tax adviser cannot consider the possibility that the tax return will not be audited, that an issue will not be raised during an audit, or that an issue will be settled favorably.

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this document is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.
 
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Sophomore year of college I had $200 bucks in Sportsbook and got it up to $15,000 in a weeks time playing mostly blackjack and throwing in some sports bets. Cashed $5,000 out and lost the other ten in 25 minutes. I'm still pissed about that.
 
currently playing $10-20NL six handed. just won a $4,450 pot when my kings held up against the dude's jacks.

that'll kick the heart rate up...
 
WakeDogg said:
currently playing $10-20NL six handed. just won a $4,450 pot when my kings held up against the dude's jacks.

that'll kick the heart rate up...
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You better be careful playing that high. One badbeat and you've lost your roll. If you have the patience, play $2/$4. Competition is weaker and you have a buffer against variance. Playing as high as u are is pure gambling unless u have a minimum 10 buyins, and really I would say you need 20. Variance at that level is very, very high.
 
OliveGardenDeac said:
You better be careful playing that high. One badbeat and you've lost your roll. If you have the patience, play $2/$4. Competition is weaker and you have a buffer against variance. Playing as high as u are is pure gambling unless u have a minimum 10 buyins, and really I would say you need 20. Variance at that level is very, very high.
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yeah i'd say that's pretty much what i've been trying to do.

so far it's turned $200 into 15k so something is working.....
 
WakeDogg said:
yeah i'd say that's pretty much what i've been trying to do.

so far it's turned $200 into 15k so something is working.....
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$15k is a lot of money, and that's an incredible streak to go from $200 to $15k in a day, but you better be careful, because you can lose it just as fast as you just made it. Just don't get cocky now. I'd strongly consider playing lower. Also, you are going to have trouble withdrawing that kind of money and not paying taxes. Start keeping up with your sessions. If you get audited, you could be fucked if you don't.

And also, be aware that the US shut down the three biggest online poker sites for US players back in April. Only 1 of the sites has given players their money back, and it is uncertain whether the other 2 will give the money back at all. Under the current legislation, Bodog could be shut down any day, and your money could be locked up for months, or worse, you could not get it back at all. You seriously may want to say, hey I just got really lucky and made a quick $15k. Now I'll take a vacation, buy a flat screen, and put the rest in the stock market as a good start to my savings.

Whatever you do, unless you think you can become a professional poker player, don't let this easy money ruin your work ethic or value of money. It'll probably take you 6 months of hard work to get $15k after tax money after college. Even professional players go through massive swings like this. Tom Dwan has won $2 million in a session, but also lost $5.5 million in one week, which then took him a year to come back from. No matter how much money you have, you can go broke if you aren't careful. Well, that's enough of a lecture. Have fun and good luck. I hope you keep winning!
 
Please do not cheat the national budget and claim your winnings on your 2011 Taxes. After that save some for take-out food to entertain the IRS as they park it in your living room.

Great job! I use to do well online, but had one bad year. I am still in the black, but I have yet to get hooked again.
 
OliveGardenDeac is definitely speaking from experience here, WakeDogg. He's had some pretty incredible streaks in online poker himself.
 
OliveGardenDeac said:
$15k is a lot of money, and that's an incredible streak to go from $200 to $15k in a day, but you better be careful, because you can lose it just as fast as you just made it. Just don't get cocky now. I'd strongly consider playing lower. Also, you are going to have trouble withdrawing that kind of money and not paying taxes. Start keeping up with your sessions. If you get audited, you could be fucked if you don't.

And also, be aware that the US shut down the three biggest online poker sites for US players back in April. Only 1 of the sites has given players their money back, and it is uncertain whether the other 2 will give the money back at all. Under the current legislation, Bodog could be shut down any day, and your money could be locked up for months, or worse, you could not get it back at all. You seriously may want to say, hey I just got really lucky and made a quick $15k. Now I'll take a vacation, buy a flat screen, and put the rest in the stock market as a good start to my savings.

Whatever you do, unless you think you can become a professional poker player, don't let this easy money ruin your work ethic or value of money. It'll probably take you 6 months of hard work to get $15k after tax money after college. Even professional players go through massive swings like this. Tom Dwan has won $2 million in a session, but also lost $5.5 million in one week, which then took him a year to come back from. No matter how much money you have, you can go broke if you aren't careful. Well, that's enough of a lecture. Have fun and good luck. I hope you keep winning!
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haha, wow. thanks for the advise.

1. i never got too cocky, i was cashing out as i went, and just kept making more. also appreciate the play lower thing, you're absolutely right if i were doing this even semi-consistently. i played online to pay my rent about 5 years ago and i would have followed your same advice. currently i'm 28 and just had a free couple nights so i decided to play again and just got hot.

2. i've already cashed out 12k of it. i'm trying to do it in pieces to avoid setting off any IRS alarms, but i really don't think i'm gonna have to pay too much taxes on it no matter what. i make 0 dollars as a student currently and already am in a considerable amount of debt (15k would help!)

3. quite aware about the 'Big 3' being shut down - it's why i'm on Bodog in the first place instead of one of my other accounts. also why i'm getting money out currently whether than waiting. it really does seem like the government went after the 'poker only' sites and not the combined ones though...

4. i don't think i can become a professional poker player don't worry. maybe i did when i was 22, but i tried for a bit and the grinding it out lifestyle is miserable, stressful, difficult, and just shitty. i just play VERY infrequently for fun. and yeah, when i do, it's to gamble. i graduate medical school in a year... i'm not dropping out b/c of this.

again thanks for your advice.... truly my only real concern now is avoiding being audited.
 
First, pretty sick job turning that bankroll into 10k. I don't have more to add than what OGD and others have said regarding specifics/bank roll etc, but I think focusing on something other than hold'em is a smart EV play if you have the time to dedicate yourself to it.

I played a LOT of hold'em and then started focusing on omaha while at Wake. You would be shocked at your rate of return in heads up omaha games. I more or less generated all my spending money at Wake from playing simple $50 HU omaha because competition is so soft. Finding the right limit is important. Too high ($200-$500) I would have gotten slaughtered I'm sure since those players are legit, but I found people tended to dabble in omaha around $50 even when they weren't great at it. It's much easier to kill those games than hold'em I've found, and if you have any interest in quasi-grinding, I think it's a good strat. H/L is even better if you can get it down.
 
My best friend won a bad beat jackpot on Party Poker a few years back. He lost a hold em hand with 4 9's and bad beat required 4 9's or better and losing the hand. He lost the hand and won an almost $70,000 jackpot.
 
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