Hawaii Gamblers Have Taxing Problem

Hawaii does not have any casinos but that is not stopping the state from collecting revenue from gambling activities. A change in the tax code could net hundreds of thousands of dollars for the state from the residents who gamble in other states.

Under a new law, gamblers who win a jackpot will be required to pay taxes on their winnings, but they will not be able to deduct their losses. If a video poker player loses $3,000 playing video poker and then hits a $4,000 royal flush, they will have to pay taxes on the $4,000. Under the old tax law, the player would have been able to deduct the $3,000 loss and only pay taxes on the $1,000 net win.

Hawaiian lawmakers pushed for the change to help ease the state's multi-billion dollar deficit. Governor Lingle has until July 15th to veto the new tax code or it will become law. Many gamblers in the state feel that the new law in unfair and unjust. Over the course of a year most gamblers will lose money and it is unfair that they are taxed on the few times when they get lucky.