A Guide To Cruise Ship Casino Taxes And What Tourists Need To Report After Sailing Home

One of the many benefits of booking a cruise ship is the numerous on-board activities to partake in once lounging by the pool and sipping on complimentary cocktails gets boring, if it ever does. You often have access to world-class entertainment, fine dining, live music, games and playgrounds for the little ones, and yes, even casinos. Gambling is an activity that many look forward to on a cruise, especially when your backdrop is a serene ocean.

While you should always play responsibly and stay informed on the drinking and gambling age on your cruise (it's probably not what you think), there's a chance your trip might end up paying for itself. A lot of people, however, think that being large at sea or in international waters means that their earnings are not taxable, and that common mistake might end up being costlier than you might think. The truth of the matter is, if you're a US citizen or a permanent resident, your worldwide income, including gambling winnings, is taxable, and being on a cruise is not an excuse to get out of it.

Recently, a US citizen attempted to flee from a cruise ship docked in Puerto Rico after accumulating over $16,000 in gambling debt to the cruise ship, Royal Caribbean's Rhapsody of the Seas. When he was finally apprehended, he admitted that he didn't want to be taxed on his gaming winnings, all while carrying over $14,000 in cash. He was faced with the charge of attempting to avoid monetary reporting requirements, a serious offense that can be punished with fines up to $250,000 for individuals, $500,000 for organizations, and in some cases, up to five years in prison. It is therefore important to know how to declare your cruise ship casino earnings.

Cruise ships are not only one of the most fun ways to travel, but they are also one of the most popular ways — a record number of 19 million Americans are expected to go on a cruise in 2025 alone. But before you set sail for your ocean getaway, do some research and know about the popular activity you're not allowed to do on a Carnival cruise ship, and the clever and easy alcohol hack that will save you some money on your next cruise. If you're planning on gambling during the cruise, it is just as important to know about your tax obligations when you hopefully hit a few jackpots.

Casinos in America will typically issue a W2-G form for their players to declare their winnings, which are considered taxable income. This form must be completed and submitted to the IRS. This form includes information on the type of gambling, the amount of the gambling winnings, and generally the ratio of the winnings to the wager. When it comes to gambling losses, which are a highly probable outcome, they cannot be deducted unless they are itemized, and a record of winnings and losses is kept. Furthermore, the amount of losses you deduct cannot be more than the winnings you report.

If you're neither a U.S. citizen nor a permanent resident, you may still owe taxes to America on your gambling winnings, but you must submit them through a different document named "Form 1040-NR, U.S. Nonresident Alien Income Tax Return," which must be submitted alongside Form 1040. Unless you're a resident of Canada, you won't be able to deduct your losses either.