There seems to be no limit to the things that you can buy when you’ve got the coin to cover it. We’d all like to get in on taste of the action, which is why we love to play. It can be any player’s lucky day, and when good fortune strikes, it’s up to them to decide how they choose to spend their money. That’s the beauty of winning! As much as we’d like to imagine scenarios of all of the things we’d splurge on if we hit a lottery jackpot or slots grand prize; it’s good to keep practical advice in mind on the way gambling winnings are taxed and how money should be invested.
Though most of us are smart enough to spend our money on practical purchases, and maybe even that vacation off to the Bahamas; there are some pretty wacky things available out there to buy. In this two-part series, we’ll break down some of the basics of what you should do with your gambling winnings, and then look at a list of some of the crazy things those gambling winnings can buy!
The first thing worth noting for any player is that money won gambling is considered taxable income by the IRS or by most countries’ governments. Gambling income isn’t restricted to just card games and casinos. Taxable winnings include anything from racetracks, gameshows, to online casinos and lotteries. Therefore, by law, gambling winners must report all of their winnings on their income tax returns.
How are gambling winnings taxed?
Within the United States, gambling winnings are generally subject to a flat tax of 25% according to federal law. However, this percentage can vary based on the amount won. Also, any winnings of the following type of over $5,000 are subject to income tax: sweepstakes, lotteries and wagering pools (including poker tournaments). This figure also includes non-cash prizes, such as trips or automobiles. They are subject to taxation based on their fair market value.
Gambling losses?are?tax?deductible, but only to the extent of your winnings, and must be included in a summary of total amounts wagered in order for the deduction to apply. This means you need to keep a record of your winnings and losses if you hope to deduct your losses up to the amount of your gambling winnings. If you plan on playing the IRS’s game, it is highly recommended that you keep a diary that includes:
- date and type of gambling
- name and address of the place you gambled
- the amount you win and lose
As well as documentation to prove your losses including:
- IRS Form W-2G
- IRS Form 5754
- Betting tickets (lottery, race track, keno stubs, etc.)
- Credit card records or cancelled checks
- Casino receipts
When it comes to online gambling, in certain U.S. states online gambling falls into a legal gray area. Most online casinos don’t recommend that you tell your bank that your incoming cash out payments are coming from online casino winnings as the Feds still encourage U.S. backs to confiscate such payments and if you’re too overt, you may leave your bank with no choice. So, please keep in mind that the above tax advice, while we did research this article well, is not professional tax advice, applies to brick and mortar casinos in the U.S. specifically and may not apply to your online gambling winnings.
Professional Gambling and the Lottery
For professional gamblers, your gambling income is generally considered regular earned income, which of course is taxed per the normal taxation rate. This must be reported by the individual marked as “self-employed” each year.
If you win the lottery, winners are given a choice of a lump payment or winnings given in annual installments. Generally, the lump payment is taxed at a higher percentage, so it’s good to look at the terms and conditions attached.
Choice of payment often comes with a time limit, so it’s worth considering the pros and cons of each. Consider which will save you money in the long run. It helps if you hire someone who can calculate the numbers to find which payment is best suited for you because lump payments can encourage careless spending.
In case you want to try playing the lottery, but aren’t sure what numbers to choose, find out some advice on lucky numbers!
Tips for investing (big) gambling winnings
Below are important steps worth taking that will help you when winning a large sum of money, whether online or at a brick and mortar casino, via a state lottery or at the racetrack:
- Hire a financial advisor
Make a plan on how to intelligently spend your money. Even if you are good with money, it is beneficial to hire a financial advisor that will guide you on how to invest your money and ensure a financial plan that guarantees the longevity of your fortune. It’s easy to fall into a hole of spending (easy come, easy go, right?), so be vigilant and hire someone who has your financial security in mind.
Still not in the millionaire’s club yet but into managing your money wisely? Check out our 7 budgeting apps that will help you manage your casino bankroll.
- Get rid of your debts
This is sort of a no brainer, but the smartest thing to do as soon as possible is to pay off any existing debts that you have accumulated over the years. These include credit card debts, mortgages and car or health payments. The sooner these are tackled, the less they will continue to collect interest. Becoming a big winner can make you a target for unscrupulous debt collectors, so getting this issue off your plate once and for all is solid good advice.
- Limit big spending
Impulse buys and big spending on lavish items should be limited. There are certain investments such as property or shares and bonds that are worth it. Perhaps three sports cars and a mansion that come with outrageous insurance aren’t the most sound purchases decisions. Once again, your financial advisor will be able to tell you what items are the difference between living comfortably versus excessively.
For a heads up on what can go wrong if you’re not careful with your newly won wealth, check out those lottery winners catastrophic failures!
- High-interest accounts
Even if you’ve made it into big money, stretch your dollars and look for solutions and/or opportunities to make more money. The right banks offer high-interest bank accounts for millionaires and are worth considering when saving. Look at the options and meet with your bankers to find the bank account most beneficial to you. These types of accounts are the simplest way to increase your wealth with hardly any effort at all.
- Diversify
It’s simple, and the oldest, best investment advice out there, don’t put all your eggs in one basket! Imagine if you put all your gambling winnings into property before the 2008 housing bubble, when the market collapsed you would have lost all your money. The best thing to do is to distribute your earnings between mostly safe and slightly riskier investments. Investing in cryptocurrencies for instance are the latest craze, but it’s worth considering limiting piling up funds into such volatile options and leaning towards investing in the S&P 500 index.
Check out our easy beginner’s guide to betting on the stock market!
Crazy Purchases
Ah, the crazy things money can buy! So, we’ve given you the scoop on how to best invest and retain your gambling winnings, but say you’re itching to do some spending. Once you’ve celebrated with family and friends, escaped on a first class getaway, and filled up on fine dining, there’s only so many ways you can spend your money. Have you ever stopped to wonder what crazy purchases you could make? Look no further. In part two of our series on how to spend it when you win it, we’ve got a list of some of the most outrageous things you can buy with your gambling winnings!
A Bulletproof, Air-Conditioned, Diamond-Encrusted Suit
If you’ve decided to quit your day job, or simply want to moonlight as a vigilante spy, why not give this suit a try? The Swiss company Suitart has developed a unique luxury suit that will set you back $3.2 million. It is made out of NATO certified bullet-proof material, comes with an interior air-conditioning system, waterproof nanotechnology, steel and black diamond-encrusted buttons, a matching watch and 24-carat golden silk tie. Even agent 007 himself will be gawking in awe. Now that you’ve got a suit cooler than the world’s most famous spy, why not keep up the cool factor Bond-style by learning more about the game of roulette!
Golden Poker Set
If you are a casino high roller looking for the ultimate poker set, we’ve found one just for you. British deck game designer Geoffrey Parker has created the most expensive poker set in the world for $7.5 million. This luxury game set is sure to have other high rollers vying for a seat at your table.
For starters, the case is made of alligator skin and comes with suede lining. The poker chips are 18-karat white gold and fitted with precious gemstones and two rows of diamonds. The cards themselves come in four decks and are entirely platinum-plated. Talk about gambling bling! Eager clients looking to buy this extravagant poker set can specify the denomination of chips they desire as well as the types of gem configurations in chips used for play.
A unique travel experience
In case you’ve ever been fed up with your average vacation or are looking for something a little more out of the ordinary, we suggest you look into a company called Blue Fish. This company caters to high rollers and big spenders who want a more customized experience. It offers everything from VIP jet tours, underwater dives in submersibles to visit the Titanic, and entry to private Hollywood parties. Each getaway is different and based on the client’s interests. Once you’re a high roller, why not give it a try? Check out also Top Caribbean Gambling Destination that would be great to visit.
Rent-a-celeb
Can’t be bothered to go to Hollywood for a private event? How about you have Hollywood come to you! This company Millionaire’s Concierge based out of Ft. Lauderdale, Florida will contact celebrities and music superstars on your behalf that will pay a visit for the right price. Celebrities like Leonardo DiCaprio or the Olsen Twins will fly out to you, and attend a private event designed according to your choosing. Just be ready to spend in an excess of hundreds of thousands of dollars per hour depending on who you want to visit for this once in a lifetime opportunity.
An online casino’s impractical purchases
There’s nothing like a good PR campaign. The online casino company Golden Palace has gone to some outrageous lengths to keep its name in the papers. They have become famous in recent years for purchasing peculiar items such as an infamous grilled cheese sandwich with a likeness of the Virgin Mary mystically on it for a mere $28,000. Other eccentric purchases include a Dorito corn chip shaped like the Pope’s hat for $1,209, and even Britney Spears’ (alleged) used pregnancy test for $5,001.
Hey, if these items ever happen to go up for auction, these novelties items can be yours! If you’re willing to pay the price that is.
Techno gadgets to gold toilet paper rolls
Speaking of novelties, if you are perhaps looking for more useful outside of the box gift ideas, the following website is perfect for you! From levitating magnetic beds and jet packs to a single role of 24-karat gold toilet paper priced at a whopping $1.6 million, some of the most interesting splurge items are available at This is Why I’m Broke. You don’t have to spend all of your gambling winnings either. There are more modestly priced items such as giant gummy bears and personalized coffee mugs. We suggest you start small, maybe with a Mobile Land Fortress for $19,999.95, an $801.07 Coffee Table Aquarium or perhaps a $300 Nerf Machine Gun.
Out of this world real estate
Ok, so you’ve bought some property, but are getting bored of the same plots of dirt here on Earth. Why not buy property on the moon? Lunar Registery offers serious bidders a chance to buy acreage on the moon. And all starting for a bargain of just $30 an acre! Even a modest win on one of our many exciting slot games will give you a chance to do that.
A pricey pad
If you do hit it big or have an outrageously successful week high rolling on Planet 7, you could always look into purchasing the most expensive commercially available property on the market. Villa Leopolda, located in the most exclusive part of the French Riviera, can be purchased for a mind-blowing $1.2 billion. Why the outrageous price tag? The estate was once owned by King Leopold II of Belgium, has been used as a film backdrop for the likes of Alfred Hitchcock and Cary Grant, and has some stunning views overlooking the Mediterranean Sea. The house is currently on the market and is being sold by Suzanne Marnier-Lapostolle, heir to the Grand Marnier liqueur fortune.
Travel Sinatra-style
Billionaire, tech genius and inventor Elon Musk is creating a private space program for people looking for a journey that is truly out of this world. His company Space Exploration Technologies (better known as Space X) has already received a request from two undisclosed individuals looking to take a week-long trip via rocket around the moon and back in 2018. Though the amount of the deposit paid by these two soon-to-be astronauts is unknown, one can speculate that it probably cost a small fortune. In case either does not pass their mandatory health screening however, a spot will open up. So now’s your chance fly to the moon Sinatra-style if you’ve got the dough.
Your very own mech suit
Robots are all the rage these days, and though we’ve seen advances in their technology from manufacturing to the medical industry, the stuff of manga comics and movies are not far behind. The Korean company Hankook Mirae Technology has developed a bi-pedal mech suit prototype known as Method2. This 13 foot high, 1.6 ton mech suit is the first of its kind in the world. Though it’s still in development, eager buyers are already lining up to get their hands on one. Set your savings aside if you plan to buy it as it will come at an estimated cost in excess of millions of dollars. There’s no doubt that it would be a lot of fun at birthday parties, shooing away pesky neighborhood kids or perfect for a future dystopian robo-battle!
World’s most expensive foods
Not interested in the potentials of technology? Why not try some more down-right expensive delicacies for your taste buds. From golden cannoli’s to the world’s most expensive caviar there seems to be no limit to the types of way to indulge: from the $666 Douche Burger at 666 Burger in New York, to $26,000 golden cannoli at Jasper’s in Kansas City, Missouri, $34,700 chocolate pudding at the Lindeth Howe Country House Hotel in Kendal, UK, to $41,000 Tubillardine whiskey from the Tubillardine Distillery in Scotland, the options to splurge in the extreme are seemingly endless.
Conclusion
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