The famous card game known as blackjack has rocked the gambling world for centuries. Surely, people have lost a lot over it, but there were a lot of lucky winners over the years as well. The reality of it all is that probably some of the biggest wins haven't been made public and will forever remain a secret between the player and the dealer, especially big wins from previous decades when there was no internet, no smartphones and no ever present media.
If you had gambling winnings, the casino is required by the IRS Information Reporting rules to withhold 28% as income tax if you do not provide a documented TIN (Taxpayer Identification Number, that is, your Social Security Number.) We have heard of cases where it is withheld no matter what. The withholding tax is 30% if a foreign gambler. If you win a blackjack tournament you are required to let the IRS know. Either the casino where the tournament is held will take the tax out of the winnings or you must declare the winnings and pay directly to the IRS, or the tax office in your country. In the United States, tournament tax is usually around 30% of your winnings.
But just for fun, what are the biggest wins known in blackjack and who were the lucky players? Here are the top five.
No.5: Shoeless Joe
We have a mysterious case of a winner whose identity was never revealed. As is turns out, it was an elderly man known as the Blackjack bum or Shoeless Joe (not related to Chicago White Sox player). He was believed to be kicked out of the house by his wife and was evidently not taking care of his personal hygiene for a while.
He came into the Treasure Island casino in 1995, without any shoes on his feet, and sat at a blackjack table after cashing in his $400 social security check. The man was ignorant to basic blackjack strategy, splitting 10s and doubling down on hard 12s and hard 13s, but that week he managed to win around $1.5 million. However, it must have triggered his unpleasant side, as he became aggressively annoying, which gave casino management reason to rejoice when he finally lost and was thrown out of the casino.
No.4: Ken Uston
Blackjack Hall of Fame member Ken Uston was a complete opposite from our previous winner. Relyig on Edward Thorp's Beat the Dealer book, he based his play on strategy, rather than pure luck, mastered the mathematical elements of the game and applied them on team play.
He is referred as the creator of blackjack card counting teams, early predecessor of the notorious MIT team.
Between 1975 and 1981, Ken Uston and his team of card counters accumulated winnings resulting in a sum worth more than $4.5 million, running the impressive streak across multiple tables and numerous casino venues across the United States. Check our Blackjack History Infographics for more info.
Blackjack Sites with Highest Payout Games
No.3: Kerry Packer
Our next contestant is the famous Aussie millionaire Kerry Packer. He was a media magnate, with a reputation of a passionate gambler – and was always considered one of the highest rollers in casinos worldwide. In 1991 he was sitting at a public blackjack table of the Las Vegas Hilton casino. It didn't take him much to win $7 million for that one night. Apparently, the Hilton had a special private room made for him after that. When he came back the next year, he reportedly gave back $10 million to the casino, but he probably didn't regret the loss all that much.
No.5: Shoeless Joe
We have a mysterious case of a winner whose identity was never revealed. As is turns out, it was an elderly man known as the Blackjack bum or Shoeless Joe (not related to Chicago White Sox player). He was believed to be kicked out of the house by his wife and was evidently not taking care of his personal hygiene for a while.
He came into the Treasure Island casino in 1995, without any shoes on his feet, and sat at a blackjack table after cashing in his $400 social security check. The man was ignorant to basic blackjack strategy, splitting 10s and doubling down on hard 12s and hard 13s, but that week he managed to win around $1.5 million. However, it must have triggered his unpleasant side, as he became aggressively annoying, which gave casino management reason to rejoice when he finally lost and was thrown out of the casino.
No.4: Ken Uston
Blackjack Hall of Fame member Ken Uston was a complete opposite from our previous winner. Relyig on Edward Thorp's Beat the Dealer book, he based his play on strategy, rather than pure luck, mastered the mathematical elements of the game and applied them on team play.
He is referred as the creator of blackjack card counting teams, early predecessor of the notorious MIT team.
Between 1975 and 1981, Ken Uston and his team of card counters accumulated winnings resulting in a sum worth more than $4.5 million, running the impressive streak across multiple tables and numerous casino venues across the United States. Check our Blackjack History Infographics for more info.
Blackjack Sites with Highest Payout Games
No.3: Kerry Packer
Our next contestant is the famous Aussie millionaire Kerry Packer. He was a media magnate, with a reputation of a passionate gambler – and was always considered one of the highest rollers in casinos worldwide. In 1991 he was sitting at a public blackjack table of the Las Vegas Hilton casino. It didn't take him much to win $7 million for that one night. Apparently, the Hilton had a special private room made for him after that. When he came back the next year, he reportedly gave back $10 million to the casino, but he probably didn't regret the loss all that much.
No.2: Don Johnson
One of the wins that set on fire the gambling world was certainly Don Johnson's accomplishment in 2011. No, we are not talking about the famous ‘Nash Bridges' Don Johnson, but it was also a pretty resourceful man, a CEO of Heritage Development LLC company. He had an unbelievable winning streak from December 2010 to April 2011, earning a total of $15.1 million playing in several major Atlantic City casinos.
The successful blackjack player first won $4.23 million at Caesars Atlantic City, then $998,000 at Borgata Hotel Casino & Spa the same month. After a while, his luck struck again, big time. He won $1.8 million at Borgata again, and in two nights another $2.25 million. And lastly, he won $5.8 million at Tropicana Casino.
As he claims, he didn't count cards apply any other technique. He simply took advantage of every favorable house rule there is, and won more as he played more. According to some interviews, he managed to negotiate a certain discount on his loses in order to keep playing, and it certainly paid off.
No.1: Kerry Packer
It's not a mistake. We simply have to mention Kerry Packer once again. Not just because we want to, but because the man has had an extraordinary gambling career.
After becoming a regular at Las Vegas whenever he had time off or was on holiday, he came back for another round in 1995. Packer was reported to have played up to 8 hands simultaneously at multiple blackjack tables at Las Vegas MGM Grand this time. He placed bets of $250,000 per hand, and 20 times in a row there were only winning hands for him.
Within 40 minutes he finished his blackjack session cashing out $20 million. Allegedly, he renounced $1 million in favor of the dealers, leaving it behind as a tip!
The world of blackjack is truly inspirational, wouldn't you say?
Gambling and the Law®: By Professor I Nelson Rose
The Internal Revenue Code is unkind to winners -- and it doesn't much like losers, either. The federal government taxes gambling winnings at the highest rates allowed. So do the manystates and even cities that impose income taxes on their residents. If you make enough money, in a high-tax state like California or New York, the top tax bracket is about 50 percent. Out ofevery additional dollar you take in, through work or play, governments take 50 cents.
Of course, the tax-collector first has to find out that you have won. Congress and the Internal Revenue Service know gambling is an all-cash business and few winners indeed wouldvoluntarily report their good luck. So, statutes and regulations turn the gambling businesses, casinos, state lotteries, race tracks and even bingo halls, into agents for the IRS.
Big winners are reported to the IRS on a special Form W-2G. If winnings are to be split, as with a lottery pool, winners are reported on a Form 5754.
Pooling money to buy lottery tickets is common among employees and friends. But whether there are two or 200 in the pool, there is going to be only one winning ticket, and somebody has toturn it in. If you are that someone, make sure you fill out a Form 5754. If your share of a $5 million prize is $1 million, you do not want to be stuck with paying income tax on the entire $5million.
Gambling has become such big business that the IRS receives nearly four million Forms W-2G and 5754 each year. This tells the tax-collectors that nearly four million big winners are outthere, waiting to be taxed.
But the IRS does not always wait. The government wants to make sure it gets paid. What good does a W-2G do if the winner is a foreigner who is going to be in his own foreign country whenApril 15th rolls around?
So, the IRS not only wants reports filed, but often requires that a part of the winnings be withheld. As anyone who has a salary knows, withholding also allows the government to usetaxpayers' money for many months, without having to pay interest.
The withholding rate for nonresident aliens is 30%. Not coincidentally, the tax rate for nonresident aliens is also 30%. So, if a citizen of a foreign country wins $1 million cash at aslot machine in Las Vegas, he will find he is only paid $700,000. The remaining $300,000 is sent to the IRS. The foreign citizen is unlikely to ever file an income tax return, but the IRS getspaid in full anyway.
Citizens of foreign countries are also, of course, usually taxed by their own governments. So some countries have treaties with the U.S., which protects those foreigners from having topay the 30% withholding to the IRS.
U.S. citizens and resident aliens have it both better and worse than nonresident aliens. The withholding rate for gamblers living in American is only 28% (it was 20%, up to1992). Having the IRS take $28,000 out of a jackpot of $100,000 is painful. But, it can hurt even more when tax forms are filled out. There is no 30% maximum tax for people living in the U.S.,and really big winners often end up paying a lot more than 28% or 30%.
The one good news is Nevada casinos were also able to convince the IRS that they could not keep track of players at table games. They said that when a player cashes out for $7,000,they do not know whether he started with $25 or $25,000. So it is actually written into the law that there is no withholding or even reporting of big winnings to the IRS for blackjack,baccarat, craps, roulette or the big-6 wheel.
There is another general IRS rule that says anyone paying anyone else $600 in one year is supposed to file a report. The IRS has been going after casinos and cardrooms that runtournaments, forcing them to file tax reporting forms on grand prize winners. Here the IRS has the very good argument that the operator knows exactly how much a player has paid to enter thetournament and how much the finalists are given.
Is there anything a winning player can do to lower the bite of the income tax? And what about those who gamble and lose? Which is everybody, occasionally. The law does allow players totake gambling losses off their taxes, but only up to the amounts of their winnings.
Of course, if you win, say $135,000, you can take off all gambling losses, up to that amount. If you gambled away, say $65,000, you would only have to pay taxes on the remaining, let'ssee: $135,000 minus $65,000 equals $70,000. The tax on $70,000 is a lot less than the tax on $135,000.
Of course, you have the small problem of proving that you actually lost $65,000. Large winnings may be required to be reported to the IRS; large losses are not.
Taxes Blackjack Winnings Calculator
One former IRS Revenue Officer, who quit government to open his own small tax preparation firm, thought he found the answer. One of his clients won a share in a state lottery: $2.7million, paid out over 20 years in installments of about $135,000, before taxes. The winnings were reported, but the tax return claimed gambling losses of $65,000. The IRS decided that $65,000was a lot to lose, and it sent an agent to conduct an audit.
The tax preparer found a man with an extremely large collection of losing lottery tickets and made a deal: he would borrow 200,000 losing tickets for a month for $500. The losing ticketswere bound in stacks of 100 and shown to the IRS auditor: 45,000 instant scratch tickets, 5,000 other Massachusetts lottery tickets, and 16,000 losing tickets from racetracks throughout NewEngland. So many losing tickets, that it would have been physically impossible for one man to have made these bets. The New York Times called it, 'one of the more visibly inept efforts at taxfraud.' They pleaded guilty eight days after being indicted.
By the way, the man who rented the tickets was not charged. It's not a crime to collect losing lottery tickets, only to use them to try and cheat the IRS.
Taxation On Blackjack Winnings
