According to John M. Eades, author of the book "Gambling Addiction," people with gambling problems often find themselves deep in financial debt. To finance their addiction, problem gamblers will often choose to borrow money, often with the expectation that they will be able to pay off the loan with their winnings. When this doesn't pan out, the gamblers must find new ways of managing their debt. To cope with this problem, gamblers can turn to a number of resources for help.
The first step that gamblers must take is to stop gambling. According to Eades, gamblers often only increase the size of their debt by attempting to gamble their way out of the problem. Although this strategy will work occasionally, in most cases the gambler will either deepen his debt or only get out of get temporarily, before re-entering it.
Some gamblers, upon getting into serious financial trouble, will realize that gambling is negatively affecting their lives and will stop on their own accord. However, a compulsive gambler will need special help to help to stop. This can come in the form of a 12-step program, such as Gambler's Anonymous, or through meetings with a psychologist, therapist or counselor with experience in treating problem gamblers.
Once the gambler has stopped gambling, he faces a number of options in paying back his debt. Depending on the size of the debt, the gambler may wish to consider credit consolidation, in which various debts are consolidated into a single, large debt, that the gambler can pay off in regular installments. However, if his debt is large enough, the gambler may need to declare bankruptcy. In all cases, the gambler should consult with a financial adviser or credit counseling services.
According to Eades, to finance their habit, some gamblers will take out loans from illegitimate sources, such as loan sharks. In this case, traditional methods of credit management -- such as the ability to consolidate loans or to receive the protection afforded by bankruptcy -- may not apply. If the gambler fears for his personal safety, he may want to contact the police.
Unlike certain other types of losses, gambling losses are tax-deductible. According to the Internal Revenue Service, tax filers can deduct all gambling losses, so long as the amount does not exceed the amount that the filer made in gambling income that year. However, these losses must be carefully documented, such as through receipts, credit card statements, or personal notes. Without proper documentation, the IRS may not accept the deductions.
- Consumer Credit Counseling Services: Debt Management For Gambling Losses
- Clearpoint Credit Counseling Services: Coping with Gambling Debt
- Bankrate: 5 Steps to DIY Debt Management
- "Gambling Addiction"; John M. Eades; 2003
- Internal Revenue Service: Gambling Income and Losses
- Internal Revenue Service. "Topic No. 419 Gambling Income and Losses." Accessed Aug. 19, 2020.
- Internal Revenue Service. "Publication 529: Miscellaneous Deductions," Page 10. Accessed Aug. 19, 2020.
- Internal Revenue Service. "About Form W-2 G, Certain Gambling Winnings." Accessed Aug. 19, 2020.
Michael Wolfe has been writing and editing since 2005, with a background including both business and creative writing. He has worked as a reporter for a community newspaper in New York City and a federal policy newsletter in Washington, D.C. Wolfe holds a B.A. in art history and is a resident of Brooklyn, N.Y.