The IRS Wrote the Gambling Diary Rules in 1977. They Still Decide Whether Your 2026 Losses Count

Revenue Procedure 77-29 asks for five things: the date and type of wager, the establishment, its address, who was with you, and the amount won or lost. In 2026, with only 90 percent of losses deductible, the loss figure you can prove is the deduction you get, which makes a 49-year-old document newly expensive to ignore.

Published 2026-11-09.

Revenue Procedure 77-29 is two pages long, was published in 1977, and is still the document the IRS points to when it tells a gambler what records to keep. Publication 529 repeats it almost word for word. Nothing newer has replaced it, and the one attempt to add a formal session rule for slot players, Notice 2015-21, was never finalized.

It matters more in 2026 than it did in 2025. Under the old law, a recreational player who lost more than they won could be vague about the size of the loss, because any documented figure above winnings produced the same deduction. Under the 90 percent rule that applies from tax year 2026, the loss figure itself sets the deduction, and a figure you cannot support is a deduction you do not have. This post is general information about federal recordkeeping rules, not tax advice.

Section 3 of Rev. Proc. 77-29 says that "an accurate diary or similar record regularly maintained by the taxpayer, supplemented by verifiable documentation will usually be acceptable evidence for substantiation of wagering winnings and losses." It then lists what the diary should contain at minimum: "1) Date and type of specific wager or wagering activity; 2) Name of gambling establishment; 3) Address or location of gambling establishment; 4) Name(s) of other person(s) (if any) present with taxpayer at gambling establishment; and 5) Amount(s) won or lost."

The phrase that does the work is "regularly maintained." A record written at the time is a diary. A spreadsheet assembled in March from memory and bank statements is a reconstruction, and the Tax Court has repeatedly treated the two differently. The names of companions, the item people find strangest, is there because a witness is evidence; a spouse who was at the next machine can testify to the session.

Then the documentation. The revenue procedure says verifiable documentation "includes but is not limited to Forms W-2G; Forms 5754, Statement by Person Receiving Gambling Winnings; wagering tickets, canceled checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to the taxpayer by the gambling establishment." Where possible, it adds, the diary should be further supported by "hotel bills, airline tickets, gasoline credit cards, canceled checks, credit records, bank deposits, and bank withdrawals," which prove you were in the building on the day the diary says you were. Publication 529, revised December 2020, carries the same list and the same caveat that these are general guidelines rather than an exhaustive test.

The revenue procedure gets specific, and the specifics are the part most logs miss.

Two things follow. The folk advice to keep a shoebox of losing tickets is half right: the tickets are supplemental records, and the revenue procedure names them, but they support a diary rather than replace one, and loose tickets with no diary prove nothing about who bought them. And the slot and table rules ask for identifiers, not just amounts. A log entry that reads "Borgata, slots, down $300" is weaker than one that reads "Borgata, machine 4417, 7:40 to 9:10 pm, in $500, out $200."

The question that decides most of the arithmetic is whether a slot player's income is every winning spin or the net of a sitting. The IRS answered it in a 2008 Chief Counsel memorandum, AM 2008-011, which is not precedent but is the agency's stated view. "The better view," it says, "is that a casual gambler, such as the taxpayer who plays the slot machines, recognizes a wagering gain or loss at the time she redeems her tokens." Its example: a player who "enters a casino with $100 and redeems his or her tokens for $300 after playing the slot machines has a wagering gain of $200," even though there may have been $1,000 of winning spins and $700 of losing ones along the way. Courts, it notes, found the spin-by-spin reading "unduly burdensome and unreasonable."

The same memorandum closes the other door. Casual gamblers "may not net their gains and losses from slot machine play throughout the year and report only the net amount," citing the Ninth Circuit in Scholl. Each session with a gain is income; each session with a loss is a loss, deductible only on Schedule A and only to the limits in Section 165(d). Ten visits with $350 of winning sessions and $610 of losing ones produce $350 of income and, at most, a $350 deduction, and only if you itemize. The Tax Court applied the session view in Shollenberger and LaPlante in 2009, both of which the IRS later cited.

Notice 2015-21 tried to turn this into a safe harbor for electronically tracked play. Its definition is the most precise one the government has offered: "A session of play begins when a patron places the first wager on a particular type of game and ends when the same patron completes his or her last wager on the same type of game before the end of the same calendar day." A break and return to the same game at the same casino on the same day is one session; walking to a second casino starts a new one; playing past midnight splits the session at 12:00 a.m. The notice took comments in 2015 and was never issued as a final revenue procedure, so it is not a rule you can elect. It is, however, the clearest available description of what the IRS considers reasonable, and Wisconsin's Department of Revenue has adopted it outright for its own returns. A log organized that way, one line per game type per casino per day, with buy-in and cash-out, is the log the IRS has described wanting.

The session concept has a limit the courts have also set. In Bright v. Commissioner (2023), the Tax Court netted the taxpayer's activity by casino over the year rather than by session, because his casino statements were the only records he had and that was the shape they came in. Which brings us to those statements.

A casino's annual win/loss statement is an estimate from carded play, and casinos say so on the document. The IRS lists "statements of actual winnings or payment slips provided to the taxpayer by the gambling establishment" among the supporting documents, not among the substitutes for a diary. The Tax Court record shows what that means in practice.

In Coleman v. Commissioner (T.C. Memo. 2020-146), the IRS used two casinos' card records to argue the taxpayer had net winnings; the court rejected those records as incomplete and tilted toward showing wins, because he had not always used his card and two other casinos kept no such records, and it allowed losses equal to his $350,241 of reported winnings on the strength of his bank withdrawals, his unchanged lifestyle and an expert's analysis. In Bright, three years later, the casino activity reports cut the other way: they were the only evidence he had, the court accepted that he rarely played uncarded, and it allowed losses of "no less than $191,756," the figure the statements supported, rather than the $240,895 on his return. His actual losses were probably higher. The record only supported the lower number.

So the statement is useful in three ways and useless in a fourth. It corroborates a diary. It can set a floor when the diary is missing. It tells you what the casino told the IRS about your W-2Gs. It cannot, on its own, carry a deduction larger than the number printed on it, and it knows nothing about the hours you played without a card, the table you sat at when the pit did not rate you, or the sports bet on your phone. Our win/loss statement post covers how to read one; request them from every casino you played at, in January, and keep them with the log rather than instead of it.

Put together, the government's documents describe a record with these columns, filled in before you leave the building: date; casino and city; game type; the machine or table number; time in and time out; cash and tickets in; cash and tickets out; the net; who was with you; and any W-2G number issued. Behind it, in a folder: the W-2Gs, the ATM and cage receipts, the hotel folio and the win/loss statements when they arrive. One line per session as Notice 2015-21 defines it. Written that night, not that spring.

The site's free play tracker records these fields, including machine and table numbers, session times and W-2G photos, and groups them by tax year; a notebook does the same job if you keep it the same way. What does not do the job is a December estimate.

Two closing points. Under the 2026 rules, our 90 percent post explains why the loss figure now matters even for players who end the year behind, and our W-2G threshold post explains why fewer of your wins will arrive with a form attached, which puts more of the burden on the diary. And if the log you are keeping has started to read like a problem rather than a hobby, 1-800-GAMBLER is free and confidential.

Topics

• tax
• irs
• money
• strategy

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