## Four Tips for Responsible Gambling

### 1. Understand the odds.

Many of the most popular games played in casinos are based wholly or mostly on probability.  This means that if you know the number of possible total outcomes and the number of possible winning outcomes, you can calculate the probability of winning any single bet. For example, the probability of winning a bet on a single number playing American roulette is 1/38 – one possible winning result out of 38 possible outcomes (36 normal numbers, and two zero pockets). Over the long term, these odds play out, and given enough repetitions of an event, the incidence rate of any give outcome will roughly match the expected probability.

Where most people run into trouble is the expectation that the short term probabilities will match the long term – that, to continue our earlier example, if they place a bet on the same number for 38 consecutive spins of the roulette wheel, they will inevitably win, because the probability of winning is 1/38.  This would be true if the events were dependent, with each outcome affecting the next. In our example, the events would be dependent if the winning number were removed from the wheel after each spin, so the probability of winning on the first spin would be 1/38, then 1/37, and so on until our number wins, which would in the worst case come after 18 spins.  However, this isn’t how casino games work.  Each bet covers a discrete event, so the probability of winning a single-number bet on an American roulette wheel will always be 1/38, regardless of how many spins you’ve lost (or won) on before.  This is true of all purely probability-based games; you aren’t any more likely to win on the seventh toss of the dice than on the first, or on the hundredth play on a slot machine than on the fifteenth.

### 2. Set a limit ahead of time.

While everyone goes to the casino hoping to win big, the reality is that we’re more likely to lose at most games than we are to win. This is the core principle of games of chance – for every big winner, there are hundreds or thousands who will lose money. But while you can’t control the probabilities outside of deciding whether to make a safe or a risky bet, you can control how much you lose. Decide ahead of time how much money you’re willing to lose, regardless of how much you win. Think of it as the price of admission, much as you would if you were going out to the bar, or on a cruise. Much like those activities, you should make sure the money you’re planning to spend is money you can afford to spend – part of your entertainment budget, rather than money you might have set aside to fuel your car, or pay rent.

### 3. Stick to your spending limit.

If you decide you can afford to lose three hundred dollars, stop playing once you’ve lost three hundred dollars. Don’t keep playing because you’ve won six hundred and you’re hoping your luck will hold. Even more importantly, don’t keep playing if you’ve been losing badly in hopes that your luck will make a turnaround and you’ll recover everything you’ve lost and more. Remember: even when the long-term odds seem decent, your bets will not necessarily play out that way in the long run, and throwing good money after bad is a sure-fire way to end up in a financial crunch.

If it will help you keep track of how much you’ve lost, keep track of your wins and losses in a notebook. That way, it’s down on paper, and you can’t fool yourself into thinking you’ve lost less than you really have. Tracking your wins and losses this way also has the benefit of letting you quickly determine how much you’ve won relative to your losses, and provides you with documentation if you ever find yourself having to prove your losses.

### 4. Know where your winnings are going.

Gambling winnings aren’t typically considered taxable income in Canada, so if you’re gambling at home, anything you win is yours to keep, less any house fees. This isn’t necessarily the case in other countries. In the United States in particular, gambling winnings on many games are considered taxable income, so if you’re a Canadian heading down to Las Vegas for a week – or just across the border to a casino – you might be in for an unpleasant surprise. The IRS imposes a 30% gambling winnings tax on wins over \$1200, which means that when you collect your winnings from the casino (or other legal gambling establishment), you will collect 30% less than the actual win. This happens regardless of whether you’re a US citizen or not, as the casino has no way of verifying your citizenship. Being prepared for this gambling winnings withholding tax will keep you from being blindsided when you cash in – and may help you stick to your budget, since you’ll be walking away from the casino with 30% less than you won.

While there’s no way to avoid this withholding tax if you’re gambling in the US, Canadians and other non-US citizens do have the option of casino tax recovery. This involves filing a non-resident tax return form with the IRS, which can be a daunting process. You can engage the services of a refund management firm, such as US Tax Recovery, to determine your eligibility for casino tax recovery, and to fill out and file all the necessary forms for you. While this won’t put the money back in your pocket in the short term, it’s definitely a good long term bet.