- 10 -
individuals, gambling against a machine that is programmed to
make money for the casino constitutes what the Supreme Court in
Commissioner v. Groetzinger, 480 U.S. 23 (1987), characterized as
a sporadic activity, hobby, or amusement diversion.12 For other
individuals, gambling against such a machine may become a habit
or an addiction. In neither scenario is it a trade or business
with the participant’s primary purpose being income or profit.
The fact that petitioner did not have the requisite profit
objective to qualify his gambling activity as a trade or business
is by no means to say that petitioner did not wish to make money
gambling. But:
[N]ot every income-producing and profit-making
endeavor constitutes a trade or business. * * *
[T]o be engaged in a trade or business, the
taxpayer must be involved in the activity with
continuity and regularity and * * * the taxpayer’s
primary purpose for engaging in the activity must
be for income or profit. A sporadic activity, a
hobby, or an amusement diversion does not qualify.
Id. at 35.
12 While we acknowledge that a taxpayer can be
simultaneously engaged in more than one trade or business, the
facts in the present case are different from those in
Commissioner v. Groetzinger, 480 U.S. 23 (1987). There, the
Supreme Court was heavily influenced by the fact that the
taxpayer, following the termination of his 20-year employment in
February of the taxable year in issue, spent the balance of the
year engaged in parimutuel wagering and looked to such wagering
for his livelihood. In contrast, petitioner was employed
throughout the year on a full-time basis and relied on his wages
to support himself; he did not make his living playing video
poker.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011