Money Management


Money Management

Here’s an unhappy situation — being flat broke on the second day of a five day gambling vacation.

To avoid this, you need to set a gambling budget and stick to it.  Some say “Never bet more than you can safely afford to lose.”  But I believe that’s a dangerous way to think about it.  I prefer to say “Never bet more than you planned to bet”.

Here’s the difference.  You may be well off, and you could afford to wager a few thousand dollars tonight.  If you lost it, it would have zero effect on your life or your future.  But you only planned to play with $400, and that’s what you brought to the casino with you.  If you lose that $400, don’t go to the ATM.  That’s the first step down a slippery slope.

Here are a few terms to help keep things straight:

  • Bankroll: This is all the money you have that is designated for gambling.  Think of it as your gambling savings account.  It may be in the bank, or in a safe deposit box, or in your shoe, but it should be kept completely separate from your other funds.  Don’t mix your bankroll with money that you use for daily living.
  • Daily Budget: The money you have budgeted for gambling today.
  • Session Bankroll: All the money you have designated for gambling this session or period.  Normally a portion of a day, a few hours.
  • Loss Limit: The amount of money you are willing to lose in a period or session.

Here’s what we do:

  • Decide on a gambling budget for the week and for each day of the week
  • At the start of the day, we take out the money for that day, for example $400 each.
  • We further divide the daily budget into session bankrolls.  For example, $200/session
  • We decide what the acceptable loss limit is for the session up to the session bankroll limit.  If we reach a loss loss limit we end that session (or go home if the daily budget is exhausted).
  • We work hard to stick to the plans laid out above.


If you gamble long enough, eventually you’ll hit a jackpot that requires the casino to pay you by hand, in cash, and to give you a W2-g.  Now you have the privilege of paying taxes on your winnings.

Any time you hit a jackpot larger than $1199 the casino will give you a W2-g.  Some machines are set up to pay exactly $1199 for this reason!

But, you say that you’ve lost more than you won this year? If so, you may not have to pay any taxes on this jackpot.

A few things to do in advance of this occurring.

  • Keep records of your gambling trips.  Maintain a log with date, starting bankroll, ending bankroll, profit or loss.  In addition to this, casinos will provide you with a win/loss statement at the end of the year based on their records.

  • Ensure you report all gambling losses to offset the wins.  For example, keep old losing lottery tickets, etc.

  • State tax laws vary, so ensure you understand the laws in your state, and the state where you’re gambling.

Problem Gambling

If you have difficulty sticking to a budget, and often exceed your planned gambling loss limits, you may have the beginnings of a gambling problem.  Please keep gambling fun for you and your family.  Take a look at these sites:

National Council on Problem Gambling:

Gamblers Anonymous:

Harvard Medical School self help: