McCain's Gambling, And Tax Evasion?

Last week McCain's gambling habit/addiction was revealed, and although I didn't write about it at the time, a new great catch by a fellow blogger has led me to think it now warrants greater attention. First the gambling.

Most in the political world know about McCain's red hot temper, but perhaps not as many know about his love of gambling, craps in particular:

In the past decade, [McCain] has played on Mississippi riverboats, on Indian land, in Caribbean craps pits and along the length of the Las Vegas Strip. Back in 2005 he joined a group of journalists at a magazine-industry conference in Puerto Rico, offering betting strategy on request. "Enjoying craps opens up a window on a central thread constant in John's life," says John Weaver, McCain's former chief strategist, who followed him to many a casino. "Taking a chance, playing against the odds." Aides say McCain tends to play for a few thousand dollars at a time and avoids taking markers, or loans, from the casinos...

So he gambles quite a bit, and he does it with a lot of money (Noam Scheiber notes that "if by 'a few thousand dollars at a time' Scherer and Weisskopf mean 'a few thousand dollars a roll,' then we're potentially talking millions of dollars over a period of several years, not hundreds of thousands. We'd be in real pathological territory--nothing particularly borderline about it.), whether we are talking thousands at a shot or tens or hundreds of thousands of dollars in a night. But it gets worse, from looking like a person enjoys betting high on games of change, to looking like a real problem with gambling:

Only recently have McCain's aides urged him to pull back from the pastime. In the heat of the G.O.P. primary fight last spring, he announced on a visit to the Vegas Strip that he was going to the casino floor. When his aides stopped him, fearing a public relations disaster, McCain suggested that they ask the casino to take a craps table to a private room, a high-roller privilege McCain had indulged in before. His aides, with alarm bells ringing, refused again, according to two accounts of the discussion.

"He clearly knows that this is on the borderline of what is acceptable for him to be doing," says a Republican who has watched McCain play. "And he just sort of revels in it."

And there are many other examples, like in 2005 when McCain attended an American Magazine Conference in Fajardo, Puerto Rico, where he got voted "2nd-Best Bill Clinton Impression", not for his gambling, but his womanizing:

In the middle of a two-hour gambling session, the Arizona senator introduced himself to an attractive young brunette and invited her to join him at the craps table. He soon declared the woman, who was attending the conference on behalf of a Rhode Island-based technology firm, to be his lucky charm, and forbade her to leave while his winning streak lasted.

I wonder where Cindy McCain was during all of this, hmmm.

Another perspective from the same conference:

Visiting a big convention of journalists last fall, McCain joined a group that was gambling at the hotel casino until the wee hours. In his speech the next morning, he cleverly nailed his audience and himself by declaring that he was happy to be among "my base."

So the guy gambles a lot, with lots of money, and doesn't seem to know when to stop. He doesn't understand boundaries, or does, but doesn't care. Frankly, I didn't care a whole lot, because there are a thousand other ways to show he has horrible judgment or simply doesn't know what the hell he is doing, we don't need a gambling addiction to prove that. But now here's the great catch I mentioned earlier, from a Daily Kos diary entitled "Why has McCain never filed IRS Form W-2G?":

IRS Form W-2G is similar to the W-2 form we all know and hate. However, instead of declaring wages, you use the W-2G to declare Gambling Winnings.

Now why should anyone care to ask John McCain about his W-2G filings? Answering that is slightly more complicated given his many years of marathon gambling sessions at the craps table and his ties to the gaming industry. However, let's start with the fact aides say McCain tends to play for a few thousand dollars at a time! Over the years that adds up to a big chunk of change. And that has potential tax consequences.

[...]

The W-2G is not just for people who win lots of money gambling.  The form also has instructions that are pretty clear even if you are gambling and losing significant amounts of money as well:

Generally, report all gambling winnings on the "Other income" line of Form 1040. You can deduct gambling losses as an itemized deduction, but you cannot deduct more than your winnings. Keep an accurate record of your winnings and losses, and be able to prove those amounts with receipts, tickets, statements, or similar items that you have saved.

The bottom line: Whether you win or lose, Uncle Sam wants to know about it if you are spending significant sums of money gambling.  Why would Uncle Sam care if you were losing?  Well, for starters, gambling is an all-cash transaction.  If you don't regulate it, you are just inviting people to launder money through casinos.  For example, consider this story from a 2007: Terrorists Caught Money Laundering in Online Casinos,  as reported in Online Poker News.

So McCain should be submitting tax forms for all of his gambling winnings, or losses, and we know he is doing a lot of either one or both of those, yet no forms. Suddenly we are starting to see a big issue:

JCHallman, a former craps dealer, recently wrote an excellent commentary about McCain, craps and the type of gambling going on.  Based on his experience, JCHallman suggests that if McCain is running marathon sessions on the 15 dollar tabls on a regular basis, then he's easily betting thousands of dollars in each of these marathon sessions.  Nobody plays for hours to break even, so he is either winning thousands or losing thousands in each of these sessions.   The dollar volume is also consistent with anecdotes about McCain getting special high roller treatment.  Nobody gets high roller treatment like McCain reportedly gets if they are not worth thousands of dollars to the casino.  Finally, aides say McCain tends to play for a few thousand dollars at a time.   That kind of money is not trivial.

And then the diarist paints the full picture of why this matters to us, and why the media should be interested (as they undoubtedly would if Obama were the tax-evading gambling addict:

If he is winning and not declaring -- that's a crime. If he is losing and not taking the deductions, that is peculiar for a lot of obvious reasons. It means he never wins. If he is losing his own money and not taking the deduction, it looks like he is trying to hide a problem. If he is losing other people's money that certainly raises questions about influence peddling if they have business in front of his committee. Whether he is winning or losing, it doesn't take a whole lot of imagination to see how a lobbyist bankrolling the senator's marathon craps session might be using this as a way of funneling money into the senator's coffers without drawing attention to the transactions.

Finally, all this talk about unreported transactions raises raises more questions no one in the media will likely bother to ask: Has anyone seen Cindy McCain's W-2G? Does anyone know if she ever filed a 5754? Has she been supporting his gambling habit? With all the interest paid to Obama's mortgage payments, you would think something this glaring would get more media attention. Of course, then the press would have to get off the Lapdog Express and that wouldn't be any fun, would it?

This is just an overview, I encourage you to read the entire diary here, but you get the idea. McCain is obviously anything but forthcoming when it comes to transparency, as he dragged his feet forever on his medical records, on his tax records, on his rich wife's tax records (we still haven't gotten anywhere near enough of those), on his 600 pages of missing military records and now he has some gambling issues he is hiding.