Many cruise ship goers know that most cruise ships are based out of non-U.S. countries to be able to live by the laws of a given country. They also know that casinos aren’t active when in U.S. waters, or the waters of most other countries for that matter, but are instead only active in international waters.
So, many players think that because you’re not in the U.S., if you manage to get a handpay on a cruise, not the easiest feat given the lower paybacks, you won’t get a tax form.
STATUS: Not a great assumption to make.
In fact, many cruise ships will give you a W-2G, just like a land-based casino, and report your taxable wins to the IRS, just as a land-based casino would. If they report it, you have to report it, and take the steps you need to if you want to try to offset your winnings with losses. If you get a W-2G, the IRS knows of your win, so there’s no point in trying to hide it.
Even if for some reason your cruise ship doesn’t provide one, U.S. citizens are required to report any income earned worldwide. Gambling winnings counts as income. So you’re still responsible for reporting those winnings.
If you plan to deduct losses, you’re expected to report ALL winnings and losses. This goes beyond what a player’s card’s win/loss statement will tell you in many cases. As such, many accountants recommend a logbook. URComped published a helpful guide from a seasoned tax accountant familiar with gambling rules.
