Tax Court Can Be a Risky Bet for Gamblers

Stephanie F. Watson, PhD

In a recent CPA Journal article, “Can a Video Poker Player Qualify as a Professional Gambler for Tax Purposes?” (Pamela Spikes, Roy Whitehead, and Patricia Mounce, September 2007), the U.S. Tax Court case of Ferguson v. Comm'r (No. 21315, February 28, 2007) was examined. Though there were several considerations in the case, the courts have frowned on video poker as an activity that could qualify as a business for tax purposes, and Ferguson's gambling activities were found to be a hobby. Since that decision, a very similar case, Myers v. Comm'r (No. 23664, November 19, 2007), was adjudicated in Tax Court with a very different decision—Myers, a slot gambler, was granted business status for her gambling activity.