Sports Betting Sites and Taxes...

I had the exact same question last year.

They will not send you a tax form unless a bet meets the narrow criteria of winning over $600 and 300 times the amount of the bet.

I spent all year worrying about this and at the end I just got a win/loss statement from each of the sites, some which I had to specifically request. If I did it by the “book” as you describe, not only would I owe thousands, I would get an additional penalty for not withholding enough which makes no sense at all.

I ended up netting my win/loss statements as I did my own taxes on Tax Slayer and reporting it as additional income which is probably even more than I “needed” to do considering the IRS got nothing from the betting sites. I’d imagine your audit risk would be nearly zero and the law is ambiguous enough (tons of debate about this) that I don’t foresee legal issues, but don’t hold me to that and I should put a disclaimer that this is not legal advice.

Are these betting sites obligated to send you the tax information?

Only way around it, is going to the casino.

Well I won a couple thousand alone off of free bets with the Bengals in the AFC championship game

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Are these betting sites obligated to send you the tax information?

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No and they won’t unless you win a wager that’s 300 times the bet and worth over 600 dollars. I

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The research i did said the same thing. Saw a tax lawyer on youtube explain it. Basically unless you hit a huge longshot prop bet or parlay they wont send the W2-G out at years end.

Hope he's right otherwise im f'd

here watch this

My question is "them sending it" vs. whatever, you're responsible for reporting it anyway. Then, how do you report it? Still seems like the tax calculation nets profits/losses, then it may depend on the State you live in for the actual rate? Like maybe Tennessee here is 20%? And net losses can be used up to $5k IF you can itemize.

So confusing.

I made about $6000 profit each on draftkings and Caesars last year and got nothing. If I go to their apps and click on tax forms, it says none are available for me. Their win/loss statements didn’t match my profit/loss calculations, I think free bet winnings may have played into that but they said I won less money than I actually did.

If you go by the way the law is written, some say you need to report every bet won as income and every bet lost as a deduction. I am a high volume promo hunter, so in 2021 I’d have to report like $300,000 in winnings and deduct $290,000 as losses. That would put me in a higher tax bracket. It makes absolutely no sense logically.

As ambiguous as the law is, even tax accountants and lawyers have trouble interpreting it, I think it’s ok to use some logic and pay taxes on net profits if you don’t have any formal tax forms. Otherwise no one would ever bet online ever.

And what if they don't send you the tax form? If they don't send YOU a tax form, then they didn't send the IRS one either. Or?

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If you go by the way the law is written, some say you need to report every bet won as income and every bet lost as a deduction. I am a high volume promo hunter, so in 2021 I’d have to report like $300,000 in winnings and deduct $290,000 as losses. That would put me in a higher tax bracket. It makes absolutely no sense logically.

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Disclaimer: Not a tax expert, and this is not tax advice…

It sounds like you should be reporting this activity as a side business with a profit of 10k

The “reporting gambling winnings as income and itemizing losses as a deduction” is for gambling as a hobby. Even if not bonus hunting with 6 figure revenue, betting consistently year over year with the intent to turn a profit should meet the criteria for gambling as a business

I get why y’all aren’t reporting. Just saying if you were to change your minds and report, not sure gambling income on the 1040 is the best/correct way to do it.

Thanks!

Also, got some pretty good advice from a person I know. Not a CPA, but very well versed in taxes.

Accounting was my major but I went a different direction with my career. A few tax accounting classes were part of the curriculum 20+ years ago. I am no expert and do not take my advice over your CPA. I didn't watch the whole video but it sounds like the Form 8275 is a way to get around itemizing. If all the bets were made on the same site I would printout the betting history that year and attach it to the 8275 as proof of losses. Any money that was deducted from winnings for taxes will be reflected similar to how deductions from a paycheck are done. If you owe elsewhere the deduction will apply towards that and if you don't owe you should get that money refunded. Good luck!

I think for those of us that are casual betters on sites like DK, that's some sagely advice. In my case, DK's never loaded a tax form online. Of course, my betting's in the hundreds. But you can download history and net winnings vs. the bets to net it out.

I think the other thing I've learned is the risk of audit for this anyway is virtually nil. It might come up in an audit for other things. And, always keep track of this stuff either way!