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Poker News | World Series of Poker | WSOP Journal

The WSOP and the IRS

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Everyone knows that the IRS is a major part of a working person's life. Yes, taxes are necessary if we are to have a way to maintain our freedoms. The problem, as most of us see it, is that the big corporations and business people pay the least taxes and the majority of the people that work for minimum wage are pounded into oblivion to supply the majority of funds the government needs to maintain everything we've become accustomed to.

Enter the WSOP and the percentage from the buy-in of each event that is held by the casino to be distributed amongst the staff. In days of old, the common practice was that if a player left a tip for the dealers, 35% of it was disbursed to the tournament directors and the rest of it was broken down into downs for all of the dealers. Please keep in mind that the downs in a large tournament can number into the thousands and while a $15,000 tip sounds like a lot of money, it trickles down to an hourly wage. There has been more than one argument from a dealer over the tournament directors receiving 35% of a dealer tip because if a player tips a tournament director, that tip goes directly into the tournament director's pocket and is not put into the dealer pool. Somewhere/somehow, it just doesn't even out. It's hard to fight city hall and since most dealers understand the way it all works, this system stayed in effect until the establishment began taking a percentage of the prize pool and disbursing it to all of the employees that staff a room and tournament. To a degree, that percentage is broken down along the same lines as the days of old. And if a tip is left at the end of a tournament, the rule of thumb still applies.

Perhaps it needs to be noted here that the reason the percentage was instigated in the first place was to insure that tournaments would have an adequate number of employees even if previous winners of other tournaments left ‘zip' for a tip. After all, tipping is part of the industry and without tip compensation, the idea of making minimum wage for a lot of long hours, fading the heat from some of the nasty players, and pushing gigantic amounts of money to someone; is completely unappealing for anyone that is skilled and is in the industry.

In April of '93, this writer left the bright lights and heat of Las Vegas behind, settling in Gulfport Mississippi, to help open the Gulfport Grand. Mississippi had its own gaming regulations and they were nothing like Nevada's laws...but then who would expect them to be? One particular wrinkle that caused a huge amount of distress to this writer and other experienced table games dealers, was the fact that all tips had to be deposited into a locked box. In pit games, this is nothing new. They share all of their tips. As a poker dealer, this is a color of another animal. Poker dealers did not share their tips, each individual kept what they made, but still their tips for each shift were/are dropped in a locked box and counted at the end of their shift. The poker dealer walked out the door with a receipt in their pocket for what they made in tips. The casino kept the gratuity given to the dealer, held it for a two week time period, and then paid the dealer, deducting all taxes from the gratuity.

I found that to be totally ridiculous. Why is a casino entitled to hold a gratuity that someone gave to me? And then decide when to dispense it in the form of a check, which allows the casino to hold - literally - hundreds of thousands of dollars that belong to the working staff. This puts the casino into a position to collect interest from gratuities withheld for employees and soon the casino is paying the employees wages from interest made on the employee's gratuities. I worked there for one year and during that time period one employee withheld a handful of quarters to buy gas with on the way home. The employee was written up and suspended for keeping his/her own money.

I wrote a letter to the Department of Labor, specifically stating that I felt the casino was not entitled to withhold a gratuity given to me by someone else, for any length of time, let alone two weeks, and then give it to me in a paycheck. I also complained about the fact that the casino had use of my money - to run their daily affairs - and I have no choice in the matter. I received a letter back (after a lengthy delay) stating that since the matter didn't seem to affect too many and wasn't a problem that they (the department of labor) could tell, it would stand as it was.

Enter the WSOP 2006 and Harrah's Entertainment. While the results/details of any deals that may have been made between the IRS and Harrah's Entertainment are strictly conjecture, the bottom line is that all tips will be split all ways at the 2006 WSOP. In live games, all dealers will drop all tips into a locked box, and all tournaments tips will be thrown into the pool as well. Even the percentage that's withheld from the buy-in is supposed to go in the pool, with each employee receiving a set amount per shift for hours worked. At the end of the six week tournament, each employee will receive a paycheck with all taxes deducted.

At the present time, when one becomes an employee of a poker room in Las Vegas, the standard is to sign a Tip Declaration form with the IRS. This hourly Tip Declaration is figured out between poker room management and the IRS. If a dealer sits a dead spread or plays on the clock, that amount of time without making a gratuity, is figured into the hourly tip declaration. This hourly tip declaration is the standard format for taxing tips in the poker industry at this time. In more ways than one, the year 2006 will change the face of history as the working side of the industry knows it.

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