Can the IRS tax my gambling winnings? - Yes they can!

If you are a US citizen or subject to US taxes, then any money that you make is taxable, including gambling winnings. Surprised? You shouldn't be. The IRS doesn't care where or how you make your money. If you make it, they will want their cut.

Realistically, if you only made a few dollars, no one would care. If you made a few thousand dollars, they will definitely start to care, especially if they find out that you didn't mention it in your tax returns. If you get issued an IRS Form W-2G from a casino or other gambling establishment, that means that they also told the IRS about it, so you have no escape from the tax man in that case.

Even if you don't get a Form W-2G, you should play by the rules. To make things easy, the IRS offers seven pieces of advice to help you out:

1. All gambling winnings are fully taxable (no matter where you earned it from).
   
   
2. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, poker tournaments and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips.
   
   
3. A payer is required to issue you a Form W-2G if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding.
   
   
4. Even if you don't get a W-2G, all gambling winnings must be reported as taxable income. Therefore, you may be required to pay an estimated tax on the gambling winnings. For more information on paying estimated taxes, refer to IRS Publication 505, Tax Withholding and Estimated Tax.
   
   
5. You must report your gambling winnings on Form 1040, line 21.
   
   
6. If you itemize your deductions on Form 1040, you can deduct gambling losses you had during the year, but only up to the amount of your winnings.
   
   
7. Keep track of your winnings and losses. To deduct your losses, you have to be able to document it with things like receipts, tickets, statements or other records that show the amount of both your winnings and losses.

For more information, refer to IRS Publications 525, Taxable and Nontaxable Income, and Publication 529, Miscellaneous Deductions.

Keep in mind that even if you are not a US citizen and you have never had to pay taxes in the past, you may be subject to US taxes if your winnings occur in the US. If this is your situation, you should consult with a tax professional.

Are you a problem gambler?

Gambling represents different things to different people. For most it is entertainment, a break from routine. For others, it is a way to make money, though most of the money is made by the casinos and the bookmakers rather than the players.

No matter why someone gambles, it isn't a problem unless gambling leads to significant negative consequences to the gambler and the people in the gambler's life. Those negative consequences usually involve personal finances, personal relationships, and the interruption of the gambler's normal life.

While there is no easy test to tell if you are a problem gambler, if you answer 'yes' to most of the following questions, you probably have a serious gambling problem:

• Do you keep gambling after you lose more than your limit for that day or that game?
  
  
• Do you gamble to win back your losses?
  
  
• Have you ever had to borrow money, take a cash advance on your credit card, pawn some of your personal property, or take out a payday loan to continue gamble?
  
  
• Have you ever lied about your gambling to your friends, family, or coworkers?
  
  
• Did you ever skip work or some other personal or professional obligation to go out and gamble?
  
  
• Have you lost any sleep over your gambling?
  
  
• Do you feel like going out to gamble after something either very good or very bad happens in your life?
  
  
• Do you feel awful about yourself after you gamble?
  
  
• Are you afraid that your reputation would suffer if the people in your life knew just how much you gambled?
  
  
• Have you considered doing something drastic like bankruptcy, suicide, or abandoning your family to escape your gambling related problems?
  
  
• Do you binge gamble for hours or days at a time?
  
  
• Do you go overboard with other vices while gambling?
  
  
• Do you have gambling companions who you would never consider introducing to your non-gambling friends, family, or coworkers.
  
  
• Have you ever lied, cheated, or broken the law to have an opportunity to gamble?
  
  
• Has gambling gotten in the way of your relationships or interrupted your regular routines?
  
  
• Have you done anything shameful or illegal in order to get money to gamble?

If you have answered 'yes' one or two of these questions, and if it only happened on one or two occasions, you have a problem that you can probably control. If you answered 'yes' to at least half of these questions, or worse, you can think of a bunch more questions to ask based on your own experiences, then you need help in a big way.

What should you do if you have a problem?
The answer is simple. Like the case with many other kinds of addictive and abusive behaviors and lifestyles, the first step is to admit you have a problem, and the second is to ask for help. Because gambling problems may also be connected with money problems and relationship problems, you'll probably have to deal with several problems at once.

If you have the strength to make a personal commitment to face your problems and deal with it, then you will have what it takes to deal with all of the problems that are revolving around your gambling issues. If you don't know where to find treatment options, start with Google, your spiritual adviser, or your local branch of Gamblers Anonymous.

Two kinds of gambling games - those based on luck and those based on skill

Whether you gamble or play casino games online or offline, you are playing one of two types of games: those that involve luck and those that involve skill. If you are playing a game based on luck, the specific outcome of each game can't be predicted in advance, and the most important choices you have is to whether to play or not play the game. In a game of luck, you make your decisions ahead of time and you can't change them once the game starts. Your outcome will depend on what betting strategy you take and whether that strategy results in a win or loss for you.

On the other hand, games that involve skill involve playing against one or more other players (human or non-human), and you are able to make one or more choices while the game is in progress. If you can understand this basic difference, and figure out whether you are playing one type of game or another, you can figure out what kind of decisions you make when you play the game.

Games of Skill
Typically the outcome of the game can be described, but not predicted with certainty, using mathematics. For example, if you flip a coin ten times, on average you would have five heads and five tails. However, your result can be anywhere between zero heads and ten heads. Probability can predict your chances of getting a particular combination of heads and tails, but it is impossible to predict your actual outcome until you actually flip the coin ten times.

Another thing to remember about games of luck is that the game has no memory, and previous outcomes don't affect future outcomes. For example, when you roll a pair of dice, only one combination of the 36 possible combination will give you a two (snake eyes). The chance of you rolling a second snake eyes on the next throw is still one in 36, and if you rolled two in a row, the chance you would get snake eyes again is still one in 36.

The best way to get an advantage in a game of luck is to understand the rules of the game and a little bit of the math behind the game. Your strategy in such a game is based completely on what you know about the game itself, and not on the other players. Games of luck you may see in a casino or online include things like roulette, craps, baccarat, lotteries, and slot machines.

A previous article used an example of a simple dice game to illustrate the math behind a game, and also gave you a way to demonstrate well that mathematics could also model the results of the game.

Games of Skill
In a casino or online, games of skill involve a combination of both luck and decision making. The luck part is most important at the beginning of the game, for example, what cards are dealt to a poker player. Once the game is under way, each player has to make one or more decisions, and the player who makes the best decision in each situation has a better chance to win a particular game and a better chance to have more wins than losses after playing many games.

Making the best decision each time doesn't guarantee a win. The randomness of the game can still bite you. You have to make a decision based on the information you have, and you can only make guesses about the things you don't know. For example, if you are playing blackjack, and you want one more card, with practice you can estimate how likely it is that you can get a certain card, but you can't be sure until you get the card.

Your decisions may also be affected by other players. If you are sitting around a table playing poker, it may be obvious by a person's betting behavior or physical behavior that you are dealing with someone who is either a very good player or a very bad one.

A different kind of skill game is one where the outcome is determined by factors that have nothing to do with either luck and the behavior or skill of individual players. Sports betting is one example where the probability of an outcome is determined by the game players and the the agency that handles the bets and the payoffs. The probability is determined in large part by the amount of betting for one outcome or another. The skills for a successful player include understanding or at least making educated guesses about the players or the teams involved in the sport, the mathematics of betting, and the behavior of other players.

Why is it important to know if a game is all luck or at least partly skill?
If you understand what kind of a gambler you are or want to be, you will likely enjoy either skill based or luck based games more. By knowing what you want to do, you are more likely to take the time to work on those things that will make you a better player.

How to understand the emotions behind probability

When you gamble in real life or online, winning and losing can be an emotional experience, even though the mathematics behind most games doesn't have any emotions or memory, it just is. You have a 50% chance of getting heads when you flip a coin. It doesn't matter if you had ten tails in a row before then, the probability is still 50%.

When you gamble, you don't stop being human. In your mind, you know its all about the numbers, but you still can't keep your heart from beating fast if there is money on the line. Some people can handle the emotions and still make good decisions, and some people can't. Finding out how you respond emotionally to gambling can be real expensive if there is a lot of money on the line. The smart way to go is to find out ahead of time. That way, if you find out that you can't take the pressure, you can make a smart choice and not gamble for money.

A simple dice game can help you understand how you react
Todd Curtis, a well known aviation safety analyst and risk assessment specialist, created a game called Are You Better Than Average? that very easily demonstrates both the logic and the emotion behind many gambling situations. The game was simple enough for six-year-olds to pick up in five minutes, and subtle enough to entertain NASA engineers. Armed with only a pair of dice and a piece of paper, you too learn something about your gambling emotions.

History of the Game
Once upon a time, there was a procrastinating dad who promised to make up a game for the math class during Parents Night at his kid's school. The night before, dad thought "What can I come up with really, really quickly?" Spying a pair of dice, he thought for a bit and came up with a way to quickly demonstrate some of the basics of probability. The game does this in a fun way that both kids and adults can enjoy. The children of Lake Woebegone, who are all above average, inspired the game's title.

Purpose of the Game
To demonstrate three basic principles of applied mathematics: averages, probability, and modeling.

Materials: One pair of dice, throwing tray or other flat surface, score sheet (optional)

About Dice: A single die has six sides numbered one through six. With a pair of dice, there are thirty-six possible combinations. Twelve combinations result in either a double or in two numbers that add up to seven, therefore there is a 12 in 36 chance, or one in three probability of rolling a double or a seven.

The Model
On average, it takes three tries to get either a seven or a double,
therefore if one gets a seven or a double on the first or the second throw, one is better than average. It can be shown that the probability of getting a double or seven on the first throw is 1/3 (about 33.3%), the probability of getting it on the second throw is (2/3)x(1/3)= 2/9 (about 22.2%), and the probability of getting it after two throws is 1-(1/3)-(2/9)= 4/9 (about 44.4%).

This model can be demonstrated by playing the game 99 times - there should be about 33 who get a double or a seven on the first try, 22 on the second try, and 44 who do not do so after the first two tries. One can keep track of the results by using a three-column score sheet of the results (first throw, second throw, more than two throws).

Playing the Game

• Have someone throw a pair of dice into the throwing tray.



• If the person gets a double or a seven on the first throw, add an "X" in the "Wins on First Roll" table of the score sheet and go to the next player. If the person does not get a double or a seven, throw again.



• If the person gets a double or a seven on the second throw, add an "X" in the "Wins on Second Roll" table of the score sheet. If the person does not get a double or a seven, add an "X" to the "Loses on Second Roll" table. In either case, move to the next player.



• After 99 players (a person can play more than once), count up the number in each column and see how close it comes to the prediction of the model.



• Remember to keep the atmosphere light and playful!

Download the instructions and a score sheet.

How and when to use an online alias

When you go online, one of the most important things that you should protect is your privacy. When it comes to online gambling, you may only be checking out the free to play sites, and would prefer that they don't know too much about you. One way to do that is to have an online alias that doesn't give that service any idea who you are.

Should You Use an Online Alias?
If you are legally obligated to provide true information about yourself, it would be wrong and possibly a crime to provide something other than true information. Some obvious examples are online bank accounts, travel reservation sites, and any online communications involving business negotiations. For just about any other online activity, if the service provider has no need to know your true identity, then do not provide it.

If the answer to the next two questions is “no,” feel free to use an online alias:

1. Are you legally required to provide information about yourself?
   
   
2. Would anyone suffer any kind of loss if you did not provide true personal information?

What Should Be in an Online Alias?
An online alias should consist of the kind of personal information that providers of online services typically ask of new users. You should come up with a full and fake online identity profile ahead of time, including a name, birth date, address, profession, and gender.

What should be real about your online alias
The only thing that shouldn't be fake is your email address, since a working address is essential if you want to use most online services. For this, get a free web-based address from a service like Gmail, and use this email address whenever you use your fake online identity.

How much of your profile should you use?
If you register with an online service using your online alias, put the minimum amount of information possible, leaving as many spaces blank as the service will allow. The most common identifying information that will be requested will be your email address, with your zip code being the next most likely. However, be prepared to give much more. Below is a sample online alias, based on an example alias from chapter 4 of the book Parenting and the Internet:

Name: A single letter or a string of random letters
Address: 123 Main Street
City: Beverly Hills
State: CA (California)
Zip code: 90210
Telephone: 310-555-1234
Date of birth: January 1, 1911
Income: Pick something in the low range

The zip code was picked because of the popular television show that has a zip code in its title, Beverly Hills 90210. Even if you are like me and have never seen the show, you have probably heard of it many times, so remembering the zip code part should be very easy for you.

The birth year was also strategic. I use a year that is 99 years in the past (subtract one from the current year) because the only time I had a birth year rejected was when I used one more than 100 years old.

How real is this example profile?
The example alias given above was not created out of thin air, but rather from my own experience. In all the times I have used some or all of this alias to register for various free online services, it was rejected only one time. The automated registration process of one online service recognized the street as not being one from Beverly Hills and was not satisfied until I provided an actual Beverly Hills street name.

How to gamble online while at work

If you enjoy online gambling, whether you are playing for fun or playing for money, you have to be very careful about doing it while at work. The typical workplace allows employees to use company resources like computers and email accounts for personal reasons, and may even tolerate the occasional visit to an entertainment site on company time. However, most companies would consider visits to gambling sites to be an inappropriate use of company resources, and doing so may get you in trouble, or even fired.

Know the organization's rules for using the Web
Every organization that provides Internet access to workers should have some kind of policy that covers how that resource can be used. Ideally, that organization's Web use policy is written down and everyone in the organization is made aware of the policy. IF it is, find it, read it, and get familiar with it. If there is no explicit policy, then review policies concerning the use of the organization's resources and use your judgment as to what is proper conduct.

Things to avoid online at work
In Speedbrake Publishing's list of 10 online activities that you should not do at work, three of them are very relevant when it comes to online gambling:

• Visiting Web sites containing inappropriate material: In the US, the kinds of web sites most often considered to be inappropriate would include those containing nudity or sexually oriented material. Others include sites that promote or depict discrimination, violence, or illegal activities. Depending on the laws in your state, some aspects of online gambling may be considered illegal. Rather than take a chance, the smart move would be to avoid these sites while using your company's equipment.
  
  
• Using your company provided resources to send or receive email associated with inappropriate activities: Every organization has different policies, but most have limits on personal use of the organization's email system. Sending email to confirm a dentist appointment would likely be allowed, but things like sending messages to your online gambling friends, even using your own web based email account like Gmail, is likely not allowed. You should review your organization's acceptable use policy for further details.
  
  
• Engaging in online activity that, if released to the public, may hurt the public's perception of the organization: In the US, companies have the right to track or record all of your online activities, even personal ones, if you use company provided resources. If you are in any doubt about if what you are doing online would hurt your company's image, ask yourself whether what you are doing on the company's computer would embarrass the company if the details were published in the New York Times, Fox News, or the Huffington Post. If the answer is yes, then don't do it.

Steps to take to gamble online at work
When you are gambling online at work, to do so successfully you have to do three things: avoid using any company resource, only do it when you are at lunch or an authorized break, and don't publicize what you are doing.

Company resources include email accounts, Internet access through company owned computer systems, or even a company sponsored wireless access hot spot. For the last resource, it doesn't matter if you are using your own computer, if you are using the company's signal, it can still track or record everything that you do online.

During lunch or during an authorized break, you are on your own, and free to take care of all kinds of personal business, including going online, without asking management's permission. Be sure to use your own hardware to access the web, and to use an Internet connection completely separate from anything run by your company. If you have a netbook or some other device that can use a wi-fi hotspot, head on over during lunch. If your job is near a public library or coffee shop, chances are you can go there to get online for free.

Loose lips sink careers
What you do while on the clock is the company's business. What you do online while off the clock is nobody's business but your own. If you have taken reasonable steps to enjoy your online gambling independent of your company's Internet resources, and you are doing it in your free time, talking about it at work can only hurt you.

Imagine that you walked away with a big jackpot at lunch and you come back to work very happy about your good fortune, and you can't help but tell your coworker or even worse your boss. Do you think that person will be happy for you or be jealous about the fact that you suddenly have a lot more money? Rather than worry about how a boss or coworker may use news about your gambling habit against you, make the smart choice and keep your habits to yourself. This also goes for any social networking that you do online. Don't talk about it on your Facebook page, or send out tweets about how you much you made during your lunch break.

Four free tools to manage your online gambling

If you are going online to gamble, one of the big problems you will have is managing information like where the best sites are, sorting through all the email you may get from newsletters, and web sites, and keeping up with all latest online gambling news. On top of that, you probably want to keep all that stuff separate from what you do online with your work, your family, and all your non-gambling friends.

One solution is to use a small number of free online tools that can do all the basic things you need to do while keeping your gambling life separate from the rest of your life. The following three will get you started:

1. Email: Get a free email account that is based online, so that you can access your email from any computer. The other reason you need an email account is that for any service you will use online, you will likely need an email address in order to register. Also, any administrative email you get should go to this same address, and not to your work address on the one that your children share. The best choice is Gmail because it has unlimited capacity and excellent search tools that will easily search thousands of emails in your account. Having a Gmail account also makes it easy to sign up for other free services, like this next one.
   
   
2. Bookmarks management: All web browsers allow you to bookmark favorite pages, but if you use several computers, or even several browsers on the same computer, keeping track of your bookmarks can be next to impossible. Also, you may not want to keep a bookmark on any computer that will be used by someone else, especially your coworkers or children. Bookmark sharing resources like Delicious, Digg, and StumbleUpon allow you to create an online account where you can store and manage your bookmarks, and then either make them private and password protected, or make them public and available to anyone. How-to-bet.com likes Delicious the best.
   
   
3. News alerts: If you need to find out when a particular event happens, you can use the Google Alerts service to send you an email about it. Using the same technology the Google uses for it search engine, Google Alerts allows you to put together a customized search that will execute automatically and send you results as they happen. You need to have an active Gmail account to use this service.
   
   
4. General news tracking: There are thousands of blogs, web sites, podcasts, and other online resources that talk about online gambling, and it is impossible for any one person to keep track of it all. While Google Alerts is good if you only have a few things to follow, if you are trying to keep track of dozens of resources, you may want to use Google Reader to do so. Basically, any site or blog that has any kind of subscription service, allow you to subscribe to that site so you can get a notice of when there is a new item added. Once you set it up, Google Reader acts as a news clipping service, giving you headlines and maybe a sentence or two about the news item. If you want to check it out, just click on it and you will go straight to that items location on the web.

How to Protect Your Privacy Online

What does privacy mean?
When it comes to going online, whether you are gambling for fun or for money, you have to take basic steps to maintain your online privacy. A simple definition of onlin privacy is the ability to control the type and amount of access others have to your personal information, and the amount of control you have over your online experience.

Why online privacy is important
Keeping private and personal information under control is important to anyone who spends time online, especially if it is to do something like online gambling where you don't want your family, employer, or potential online thieves from getting into your business. If you don't take at least some basic steps to protect your online privacy, you may be at increased risk from one or more of the following privacy-related hazards:

• Being sent large amounts of unsolicited email.
  
• Becoming a victim of identity theft.
  
• Unauthorized access to your computer or to an online account.
  
• Unauthorized bank or credit card activity.

Examples of private information you want to protect
Private information includes any information about your life that you would like to control. This is information that in the wrong hands could bring unwanted attention or that could put you at emotional, financial, or physical risk. A partial list of that kind of information would include the following:

• Age
  
• Birth date
  
• Current or former address
  
• Current or former employers
  
• Current or former phone numbers
  
• Email addresses
  
• Credit card numbers and other financial information
  
• Gender
  
• Information needed to access computers, computer networks, or online services
  
• Lifestyle information such as travel schedules, group affiliations, clubs, favorite activities, and details about personal relationships
  
• Mother’s maiden name
  
• Name, nickname, or initials
  
• Social Security number or other information from government-issued identification

Key Privacy-related threats
Your privacy is at risk when others get too much access to your private information or when others get too much control over the information that gets sent to you. While some of the following types of privacy problems are caused by outsiders, others can be caused by your online habits:

• Fraudulent Schemes: There are several kinds of fraudulent schemes where obtaining privacy-related information is just the first step of a possible crime. Some examples include the following:
  
• Credit and debit card fraud: Schemes where your credit card information in order to make bogus or unauthorized charges.
  
• Identity theft: The unauthorized use of personal information in order to take on the identity of another person.
  
• Other scams and cons: There are a number of other criminal schemes in which the goal of the criminal is to gain the confidence of someone over a period of time before the actual crime occurs. Examples include fake lotteries, bogus requests to help transfer funds to a bank account, and unauthorized money transfer requests.

Steps you can take to protect yourself
Most privacy problems come about because of bad habits or or bad decisions, and with a little work you can avoid most online privacy problems. By taking the steps described below, you can avoid a lot of privacy related headaches:

• Joining mailing lists and online services: First, avoid joining any list or online service that is associated with a web site that promotes or features illegal products or services or unethical behavior. Once you join, review the first few mailings to make sure the content is useful to you, and if it isn't cancel your subscription.
  
• Responding to suspicious requests: Don't respond to suspicious requests, especially if they ask you to send sensitive personal or financial by email.
  
• Avoid putting too much personal information online: Avoid putting personal information like your home address or email address on a web page or web site that anyone can view.
  
• Always send sensitive information in a secure way: Unless you are certain you can send data securely online, use a safe offline method like regular mail or a phone call.
  
• Never send sensitive information by email: Email has all the security of a postcard. Information like credit card numbers, social security numbers, banking information, and drivers license information should never be sent by email.
  
• Use a backup or throwaway email address: If you use a backup email account for things like joining mailing lists or signing up for free online services, you can just close that account if you start getting too much useless junk email.

What are the most common kinds of online gambling?

If you are involved in online gambling, especially if it is only an indirect involvement link placing advertising, you should take the time to know some basic things about the industry. One of the most basic things is the categories of online gambling sites or blogs that is out there. Understanding a little bit about the major categories will make it easier to make sense of the huge range of sites and games that are online:

Sports books: the general activity of accepting wagers on the outcome of various sporting events. One of its major functions is to take and hold sports bets and make payout to the winners. In the US, sports books are legal only in the state of Nevada. Online sportsbooks are not allowed in the US, but are allowed in many other countries. Current US laws and regulations discourages or makes illegal activities, such as electronic transfers of money, associated with online sports books.

Lottery: a form of gambling where lots are drawn, or random numbers generated, to determine a winner. In the US, most states offer state level lotteries, and there are some lottery games such as Powerball, that cover several states. In the US, most lotteries require that you purchase tickets from a licensed dealer, and online purchases are not allowed. However, there are many sites outside the US that offer this kind of gambling.

Casino
These sites often have a range of games commonly seen in casinos, including slot machines, card games like poker and blackjack, and table games like baccarat, blackjack, craps, and roulette.

Live Casino
As the name implies, these gambling sites have actual live dealers working the different games and the dealers interact with the actual players through things like online chats and webcams.

Online casinos - web based vs. downloaded software

When it comes to playing casino and other gambling games on your computer, you have three basic choices:

1. playing online using your browser at sites known as online or virtual casinos
   
   
2. Playing with an online based casino that also requires you to use specialized software in your computer
   
   
3. Playing offline using specialized software that in your computer

Online only issues
Each option has its particular positives and negatives. Totally web-based online casinos may not require you to download software, buy you may have to use a browser that supports plugins for things like Macromedia Flash, Macromedia Shockwave, or Java and require browser support for these plugins. Depending on the casino, it may require significant amounts of bandwidth to run all graphics, sounds, and animations on the site. If you have any kind of high speed connection, it shouldn't be a problem.

Online casinos that also require software
Casinos that require software beyond the browser may run faster than a browser-only interface, but at some point you have to get the software into your computer. This usually means downloading it at some point, and the initial download and installation of a download-based online casino client does take time, especially if you don't have a high speed connection. The lack of a high speed connection may also slow down your gaming experience.

Offline gambling issues
Most personal computers come with some basic gambling type games bundled with the operating system, but for the really good games, you will probably have to get additional software. Playing offline is great for learning how to play particular games in a lower pressure environment, but if you want to play with money, you will have to go online at some point.

Viruses, malware, and security
Whether you are playing online or offline, you always run the risk of getting software with viruses or other malware, or downloading the same from an online gambling site. One of the best things that you can do is use some common sense and only visit sites of companies you trust and and only use software from reliable sources. You should also use and regularly update security software for your computer. If you are unlucky and end up with something bad in your computer, it may show itself to you in one or more of the following ways:

• Files or programs on your computer are mysteriously missing, damaged, or updated.
  
  
• You or a family member has unexplained or unusual financial activity in a bank account or credit card.
  
  
• New or unfamiliar software is mysteriously loaded on your computer.
  
  
• One or more of your computer's programs starts to behave strangely.
  
  
• Files or programs on the computer become corrupted, disappear, or are impossible to open or use.

Common lottery terms and definitions

If you are going to play one of the many lottery type games available in the US or Canada, you should be familiar with some of the terms and definitions the lotteries use. The following set of lottery terms are base on information from the North American Association of state and provincial lotteries.

Agent: A retail outlet for lottery tickets.

Annuity: A prize paid out in installments, typically inn annual installments over 20 or 25 years.

Box bet: A numbers game wager where the player selects numbers without regard to the order in which they are drawn. For example, if the numbers "1,2,3" are drawn, the combinations "1,2,3", "1,3,2", "2,1,3", "2,3,1", "3,1,2", and "3,2,1" all win under a box bet. (See "straight bet.")

Breakopen: An instant-win ticket on which the player tears open a flap to see if the ticket is a winner. Also called pulltabs. Breakopens are often sold by charities and occasionally by state lotteries.

Cash lotto: A lotto game awarded as a lump-sum cash payment. Cash lotto games typically have a smaller top prize than large jackpot games, more favorable odds of winning that top prize, and require players to select fewer numbers out of a smaller field. Examples include Florida's Fantasy 5 and Indiana's Lucky 5.

Cash option: A large jackpot that the winner elects to receive as a lump sum cash payment rather than an annuity. This lump sum is typically at a significant discount, usually around 50%, from the total prize.

Commission: The fee paid to retail outlets for selling lottery tickets. Commissions in North America typically range between 5 percent and 6 percent of the price of the ticket.

Daily game: This can refer to any game where winners are determined once a day, but usually refers to a numbers game such as the "Daily 3" or "Daily 4" games played in many states.

Double-double: A number from a 4-digit game made up of two doubles. For example, 4664.

4-Digit game: A numbers game played with four digits between 0 and 9. Numbers may be repeated.

Handle: The sum of all money wagered at a video lottery terminal. See also "net machine income."

Instant game: A lottery ticket that requires the player to remove a latex coating to determine if the ticket is a winner. Also called "scratch-off game" or "scratcher."

Jackpot: The top prize for a lotto game. Jackpots are usually parimutuel. If not won in the next drawing, they "roll" to the next drawing and increase in size.

Keno: A lotto game in which a set of numbers (typically 20) is selected from a large field of numbers (typically 80). Players select a smaller set of numbers (up to 10) and are awarded prizes based on how many of their numbers match those in the drawn set. Players have discretion over how many numbers to select, and can choose to play for a small prize with good odds (by selecting a small set of numbers such as three), a large prize with much greater odds (by selecting a large set of numbers such as 10) or combinations in between. Among the government lotteries offering keno are Massachusetts and Michigan.

Lotto: A game where players select a group of numbers from a large set and are awarded prizes based on how many match a second set chosen by a random drawing. In a typical lotto game, a player might be asked to select six numbers from a set of 49. At a predetermined time six numbers are randomly selected by the lottery. The player wins a major prize if all six of their numbers match those chosen in the random drawing. The player wins smaller prizes for matching three, four, or five of the drawn numbers. Examples of lotto games include Powerball and Mega Millions, each played in a number of U.S. jurisdictions, and Canada's Lotto 6/49. Some form of lotto is played in every North American lottery jurisdiction.

Net machine income: The money played at a video lottery terminal ("handle") minus the prizes won at that terminal.

Numbers game: This term can be used for any lottery game where winners are determined by a random selection of numbers. However, it is often used more specifically for a game where a player selects three or four digits (0 to 9) and matches them with a similar set selected at random by the lottery. The player can select several different types of wagers with payoffs varying accordingly. For example, players making a "straight" bet will win $500 on a $1 bet if their three digits match the three digits selected by the lottery in the same order. Some form of numbers game is played in 31 of the 38 U.S. lottery jurisdictions and four of the five Canadian lotteries.

Odds: The probability or likelihood of winning expressed as a pair of numbers with the first number being chances for winning, and the second being the chances against. For example, in a coin flip, their is one chance for getting 'heads' and one chance against, and could be written as "one to one odds" (or 1:1 odds). In a 52-card deck, the odds of finding an ace one to 12 (4 chances for, 48 chances against, or 4:48, simplifying gets you 1:12). See also "probability."

Off-line game: A game that does not require the use of a computer terminal for purchase. Instant and passive games are examples of off-line games.

Online game: A game where tickets are purchased through a network of computer terminals located at retail outlets. The terminals are linked to a central computer that records the wagers. Examples of online games include lotto, keno and numbers games.

Passive game: A lottery game similar to a raffle where a player buys a ticket with preprinted numbers. The lottery later randomly draws numbers that are compared to the players' tickets to determine the outcomes.

Probability: Defined as the chances for something divided by total number of possibilities. For a coin flip, the probability of getting heads is 1/2 or 50% (one chance for heads divided two total possibilities of heads or tails). See also "odds."

Pulltab: See "breakopen."

Quick pick: A method for playing numbers or online games where players choose to have a computer randomly select their numbers rather than picking the numbers themselves.

Rollover: When a game jackpot is not won and that jackpot amount is added to the jackpot of the next drawing, resulting in a higher jackpot for that drawing.

Scratch-off game: See "instant game."

Spiel: An add-on feature to a lotto game. For an additional fee an extra set of numbers (typically four to six numbers) is printed on the bottom of a ticket. Players win by matching one or more of these numbers to those selected in a random drawing. Spiel games are found throughout Canada but are not yet common in the United States. Examples of spiel games include Atlantic Canada's TAG, Quebec's Extra, and Ohio's Kicker.

Sports lottery: Games where outcomes are determined by the results of sports events. Sports lotteries are the most popular lottery games in much of the world (where they are frequently called "toto" or "football pools") but have not achieved this level of popularity in North America. They are offered throughout Canada but in the United States are only sold in Delaware and Oregon.

Straight bet: A form of betting on a numbers game where the player attempts to match both the numbers drawn and the order in which they are selected. For example, if the numbers "1,2,3" are selected in a three-digit game, a ticket bearing "1,2,3" will win but a ticket bearing "2,1,3" will not. (See "box bet.")

Terminal: A computerized device located at a lottery retailer that is used to sell online games and to validate winning tickets of online and instant games. Terminals are connected to a lottery's central computers by phone line.

3-digit game: A numbers game in which three digits between 0 and 9 are selected. Numbers may be repeated.

Toto: See "sports lottery."

Video Lottery Terminal (VLT): Electronic games of chance played on a video screen. They often simulate popular casino games such as blackjack, poker, or spinning-reel slot machines. Unlike slot machines, video lottery terminals do not dispense money. Rather, a winning player is provided a ticket that is redeemed by the retailer for prizes.

Top 10 things to know about online gambling

Online gambling covers a lot of activity, and if you want to understand what it is about, you have to know a few key things about it.

1. Gambling is generally allowed online: Gambling often involves games that go back hundreds of years, and exists in every corner of the earth. Going online to play the games that are gambling related is generally allowed with few if any restrictions. When it becomes an issue is if there is money involved. If that is the case, then there are probably a lot of rules and regulations that go along with it.
   
   
2. Paying for online gambling is generally not allowed in the US: The biggest potential market for paid online gambling is the US, and the federal government has very strict rules that make it difficult for most to pay to play online. Banks in the US are not allowed to let customers make transactions that are related to online gambling. That means no bank transfers, credit card payments, PayPal payments, or any other electronic financial transaction for online gambling sites.
   
   
3. In the US, laws vary by location: If are in the US, the laws that apply to you depend on where you are. Federal law applies throughout the US, but state laws only apply to that state. It can get confusing if you are in one state and the person or company you are dealing with is in another state. Regardless of how complicated the law is, you still are responsible for following the law.
   
   
4. Sending and receiving betting information online is generally not allowed in the US: The US government also has extensive restrictions about transmitting betting information electronically.
   
   
5. The situation is different in most of Europe: The European Union generally allows online gambling web sites to operate legally, and many of the biggest are based in Europe.
   
   
6. Online casinos still want your gambling business: Given the money at stake in the US market, it should not come as any surprise to you that many web sites invite US players and claim that there are ways to get around US laws. They may be right, but if they are wrong, you will have to pay the price.
   
   
7. Most US states want your gambling business: Nevada and New Jersey may have the biggest casinos and most of the media coverage, but most states have many forms of legalized gambling from state lotteries, to video poker, to Native American casinos. These existing industries for the most part are very happy that online gambling has severe restrictions in the US, because it means less competition for their current customers.
   
   
8. You can find plenty of information about gambling online: In spite of the legal restrictions on gambling online, there is no restriction about providing information about online gambling.You can find out all you need to know by taking the time to use search engines, blogs, podcasts, videos, and other online resources to find what you want.
   
   
9. There are online advertising restrictions advertising: Many of the biggest companies offering online advertising either don't allow gambling related advertising or severely restricts what is allowed. For many advertisers, it doesn't matter if the advertising is not breaking the law, many advertisers avoid potential legal headaches by just not getting involved with that part of the business.
   
   
10. Be careful where you do your online gambling: Most businesses and schools don't allow you to use their computers for anything related to online gambling, so don't even think about doing it. If you don't want someone to know about your interest in online gambling, either use a computer that no one else will use, or go online at your local library. Libraries and librarians respect your privacy and won't get in your way if your want to check out online gambling sites.

Disclaimer: How-to-Bet.com is not offering any kine of formal legal advice. All of the information given on these pages has been taken from several sources, including US federal agencies and news media reports, and the accuracy if the information is not guaranteed. If you have serious questions about online gambling, consult an appropriate legal professional.

Typical restrictions for gambling advertising

While some advertisers and many web site owners allow gambling advertising, several of the biggest advertisers either don't allow or severely restrict gambling related advertising. Current restrictions on Yahoo and Google are outlined below.

Gambling advertising on Yahoo!
Yahoo! has an extensive list of categories of advertising that it does not allow. It doesn't allow ads for online gambling sites that accept wagers or require payment in exchange for the chance to win prizes. Also not allowed are sites that offer both information and links related primarily to the promotion of online gambling.

Their restrictions go beyond that. Yahoo! will terminate an ad if it finds out that a site is indirectly soliciting users to participate in online gambling, for example through email.

Gambling advertising on Google related sites
Google has a fairly complex set of guidelines for advertising that is often specific to the region where the ads will be placed. For US advertising, gambling advertising policies that are similar to those of Yahoo! For example, in the guidance it gives to advertisers who use Google's AdWords service, it actually says that it allows gambling advertising, but only for ads that target locations in Great Britain (England, Scotland, and Wales), Italy, Austria, Belgium, Australia (limited to wagering & sports betting), and the Republic of Ireland.

Ads for online gambling will not be displayed in other countries except those for state licensed entities in Denmark, Finland, France, Norway, Portugal, Spain, New Zealand, Sweden, and Israel. If you are interested, Google provides a list of specific exceptions and restrictions in the countries where the advertising is allowed.

What should you do about gambling ads?
Whether you are advertising for an online gambling site, or simply someone accepting an advertisement on your personal web site, it is up to you to find out what rules apply to you. If you place ads or accept ads that don't comply with an advertiser's or web site's policies, or that are in violation of one or more laws and regulations, you could at the very least get your ad canceled, and perhaps have some legal trouble.