Jerome Powers is the CEO and co-chairman of Plum TV. According to Wikipedia, Plum TV “is the only media company focused on the top spenders and influencers in America on all major platforms: TV, Print, Digital, and Events.”

I had never heard of Plum TV, and I’m a bit insulted a producer of the network hasn’t approached me with a pitch to feature me in a story. Anyone who sees “taxdood” as a feature story will be sure to check it out, no?

Ok, back to Mr. Powers. Powers hit the blackjack tables at the Mohegan Sun one night in May 2009. And he hit them hard. The casino extended the wealthy businessman credit to play, and Powers ended up in the red $1.2 million. Powers wrote checks to cover the debt, but his bank didn’t honor them.

Powers didn’t immediately pay up, so the casino sued him to recover in November 2009. A long legal battle ensued and the parties ended up in a Connecticut court. ABC News reported his legal arguments:

First, he said he’d welshed on principle, claiming in court papers that the marker given him amounted to an illegal contract, since the State of Connecticut forbids both the extension of credit for gambling and gambling itself. He further argued that the State of Connecticut had no legal authority in the case, since the Pequots’ reservation, like other Indian reservations, enjoys the status of a sovereign nation.

In January, the judge ruled in favor of the casino, and Powers appealed the decision. Earlier today, however, the NY Post reported that Powers has decided to end the legal battle and pay up.

If Mr. Powers pays the entire debt in 2011, he can claim a $1.2 million gambling loss on his 2011 tax return (assuming he is a cash basis taxpayer). He shouldn’t have claimed the loss on his 2009 tax return, because he wasn’t out-of-pocket at that time. Of course, this loss will go unused unless he also reports gambling income in 2011. Not that I’m encouraging Powers to frequent the blackjack tables again.