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casino and studying their patterns to determine which slot
machines were likely to pay out. Moreover, petitioner testified
that after some initial losses she changed her strategy to help
her win. She decided to try to win just a little at a time
rather than to try to recoup old losses all at once. See Engdahl
v. Commissioner, supra at 669. If petitioner won some money
early in the day, she would take the winnings and return home,
rather than continue to gamble with the money she had just won
and risk losing it. We find that this factor favors petitioner.
Expertise of Taxpayer or His or Her Advisers
We next consider petitioner’s expertise (or the expertise of
her advisers) in the gambling activity. Preparing for the
activity by extensive study of its accepted business, economic,
and scientific practices, and consulting with experts in these
matters may indicate that a taxpayer has a profit objective when
the taxpayer follows that advice. Sec. 1.183-2(b)(2), Income Tax
Regs.
Petitioner considers herself a gambling expert and has
gambled for over 10 years. The continuity and regularity of her
gambling activity strongly suggest that she is an expert at slot
machines. Petitioner also consulted regularly with casino
employees to further her gambling strategy and watched other
gamblers to understand what she believed to be slot machine
payout patterns. We find that this factor favors petitioner.
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