Tax Legal Services · Primary-source case analysis

Groetzinger: Full-Time Gambling Could Be a Trade or Business

By Aneeta Mishra and Timothy Chan

Published September 13, 2026

Commissioner v. Groetzinger explains the continuity, regularity, and profit-purpose features that separate a trade or business from a sporadic activity or hobby.

The taxpayer devoted the year to wagering

Robert Groetzinger had no other employment and spent sixty to eighty hours each week studying and making parimutuel wagers. He placed bets for his own account, received no wages, and ended the year with a net gambling loss.

Trade or business required sustained profit-seeking activity

The Court declined to impose a universal requirement that the taxpayer hold himself out as selling goods or services to others. It instead asked whether the activity was pursued with continuity and regularity and with the primary purpose of income or profit.

The activity met that standard

Groetzinger’s gambling was extensive, continuous, and his intended livelihood, not an occasional amusement. The Court therefore treated it as a trade or business for the minimum-tax provision then before it.

The holding does not erase other tax limits

The Court affirmed the taxpayer on the classification question. It did not make every frequent gambling activity a business or eliminate separate restrictions on deducting gambling losses and expenses. Current treatment depends on contemporary Code provisions, records, profit motive, and the nature of the activity.

Key takeaways

• Document time, frequency, organization, and profit purpose.
• Sporadic or hobby activity is not a trade or business.
• Business classification does not override separate loss limitations.
• Maintain complete wagering, expense, and income records.