Last year, I won a myVegas sweepstakes for a 2 nights stay at NYNY with $100 in freeplay and $200 in resort credit. I had to submit a W9 form with playstudios because the winnings are considered as income. I expected to be taxed but I was definitely surprised at how much they valued the prize.
I received my 1099-misc for the winnings and the prize was valued at $1000. They seemed to just pick a random number for the value of the prize, without considering the actual value. At a 30% state + federal tax rate, I would owe an addition $300. The actual value of the prize, based on publicly available rates on the same day, was:
- 2 weekday nights at NYNY: No resort fees. Had to go on weekdays due to schedule. Actual value: $220
- $100 freeplay: Actual value: $100
- $200 resort credit: Actual value: $120
The resort credit value is based on the premium they add for their room rates with a food and beverage credit. Typically, for $100 daily credit you only pay $50-$60 per night. So the actual value of the stay was only about $450, yet I had to pay $300 in taxes for it.
What’s even worse is that the REAL value for me is significantly lower. If I had to book this trip, I would have paid:
- 2 weekdays nights at NYNY: free through myVegas, no resort fee through MGM Gold. Price: $0
- $100 freeplay: Price: $100
- $200 resort credit Price: $120
If I booked the trip myself, I would have only spent $220! Yet by winning the prize I would pay $300 in taxes.
Conclusion
The lesson here is 1) if you win a prize, ask about taxes 2) book weekend rates to maximize value 3) consider decline the prize if the taxes is more than you would pay for the trip.
In the above picture, if someone won the NCL cruise, they would owe taxes on $1800, in addition to the gratuities and port fees. They could have gotten the cruise for free and saved $540 if they purchased the NCL reward directly loyalty
Median Travels 