The Tax Court has ruled that although a taxpayer spent more than 1,000 hours playing video poker in 2003, he was not a professional gambler.As part of its decision, the court implied that playing video poker might never constitute a trade or business under Section 162 of the tax code. After noting that the petitioner, a Chicago building operating engineer, never adjusted his gaming strategy even when it became apparent that he never had a winning year, the court also said that it remained unconvinced that the petitioner’s gambling activity meets the standard for being a trade or business.

“We are not persuaded that an individual who gambles against a machine that is programmed by a casino can have, as his or her primary purpose, income or profit [one of the requirements for an activity to be considered a trade or business],” the court wrote. “After all, such a machine is on the floor to make money for the casino and is not there to provide income or profit for the casino’s patrons.”

The Internal Revenue Service said that the engineer’s income tax was deficient by a little more than $3,000 in 2003. The taxpayer lost more money than he made in 2003, using some of his savings to support himself, and filed a Schedule C, “Profit or Loss From Business,” that year, claiming $1.3 million in gross income from gambling, and a corresponding $1.3 million in gambling losses. The court also didn’t like that the engineer didn’t keep records of his win-loss activity, instead relying on the casinos’ yearly statements.

The court said that it was incorrect for the engineer’s tax preparer, H&R Block, to determine that he was a professional gambler simply because he spent more than 20 hours per week on the activity. “Simply spending all of one’s free time on an activity does not transform that activity into a trade or business, nor does it make the participant a professional,” the court wrote. “Further, the amount of time spent engaged in the activity is not the most significant aspect of the trade or business analysis. More important is the taxpayer’s actual or honest objective of making a profit.”

The court also relied heavily on Wikipedia, citing the interactive online encyclopedia eight times in discussing the uncertainty principles of video poker.

The summary opinion, which can’t be cited as precedent in other cases, is available online at

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