Saturday, December 9, 2017

E-11: Group Gaming and W2-G's

 Amanda Gades asks....

There are some popular youtube channels out there that feature high limit play with groups of people that contribute an equal amount of money per player and a fixed number of spins that each participant gets to do on a single machine. One particular youtuber states on his website that his players card will be used for all spins and he agrees to cover taxes for any wins under $5,000 total. Over and above that amount, 35% will be held back for taxes. I got that verbatim. My understanding is that the player actually doing the spins is the person who receives the W2-G on a hand pay. Which occur regularly. Here's a scenario that illustrates my question.

Everyone in the group contributes $200 each. On one of my spins, I get a $4000 hand pay and a W2-G. Can the youtuber who agreed to cover the taxes voluntarily put his name on the W2-G even though it won on my spin?

Going even further, say at the end of the session, everyone gets $500 for a $300 profit. However, the IRS has it down as a $4000 win for whoever is on the W2-G and no one else in the group is even known to the IRS.  It seems unfair for the person who got the big $4000 win, even though it was "really" only $300.