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My analogy would be a casino comping a player a hotel suite. Would the fair market value of the room offset any winnings a gambler might have?

Yeah, I don't know how comps work. I might guess that by giving you stuff the casino is assuming that you're losing (at least theoretical dollars over the long run) b/c the games have a house edge. So as long as you keep wagering you're theoretically losing. As long as you're losing the IRS doesn't care. Plus valuing comps could be hard? Don't know.

I do know that the IRS decided a while back that frequent flier miles are tax-free (in a situation where you receive them for business travel that is company paid). It wasn't so much that the IRS didn't want the money for what it saw as non-cash compensation, but that they were impossible to value due to the many and constantly changing variables relating to redemption.

So maybe the answer to your question is to collect all of your rakeback in 'leopard print thongs' as someone posted to me here a long while back.

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You figured out what I was trying to say even though I didn't express myself correctly. I meant to ask if the FMV (fair market value) of a comp is considered income.

From my understanding, casinos give comps to keep players hanging around longer so they eventually lose. It's not based on how the player is doing, so much as how much he's playing for.

Another analogy would be a bank that gives you a gift for opening an account. IMO, that gift isn't taxable. I see rakebacks and bonuses the same way.

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There is a court case which involved gambling where the very wealthy gambooooler was given very expensive comps. He also lost big and claimed the comps as income. The IRS didn't think they should be listed as income and it went to court. The court ruled that the gamboooler would not have received the comps if he was not gambooooling and so therefore he is being "paid" to come back. The court ruled the comps are income.

I have a decent gambling/tax book I bought after reading this thread and will post the names and court case. I do not think this is considered a grea area.

I think the issue of what a session is can be a grey area. I am of the opinion after much thought that a "session" is any continuous level of play (even breaking to go to the restroom). I believe if you go to a B&M casino and play craps, then BJ then use the restroom then play some more craps that everything is considered one session.