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Olk v. United States - 536 F.2d 876 (9th Cir. 1976)


Impulsive generosity or superstition on the part of the players is the dominant motive when players give "tokes" to casino dealers. In the context of gambling in casinos open to the public such a motive is quite understandable. However, payments so motivated are not acts of detached or disinterested generosity. Quite the opposite is true. Tribute to the gods of fortune which it is hoped will be returned bounteously soon can only be described as an involved and intensely interested act.


Plaintiff taxpayer filed a suit for a refund of federal income taxes. The district court held that monies, called "tokes" in the relevant trade, received by plaintiff taxpayer, a craps dealer employed by Las Vegas casinos, constituted gifts within the meaning of internal revenue law. Defendant appealed the decision.


Are monies called “tokes” that plaintiff taxpayer received taxable income?




On appeal, the court stated that gifts proceeded from detached and disinterested generosities, and that the giving of tokes was not an act of a detached or disinterested generosity. The court held that receipts by taxpayers engaged in rendering services contributed by those with whom the taxpayers had some personal or functional contact in the course of the performance of the services were taxable income when in conformity with the practices of the area and easily valued. The court held that tokes, like tips, met those conditions; thus, plaintiff was not entitled to the refund he sought.

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