IRS-CI urges US taxpayers to make safe, legal sports bets

WASHINGTON – Thinking about making a sports bet this NFL season? Bet safe. Bet legal. IRS
Criminal Investigation (IRS-CI) investigates a variety of offenses tied to illegal gambling and
encourages U.S. taxpayers to protect themselves when
making wagers.
Each fiscal year, IRS-CI initiates over 30 illegal gambling
cases, obtaining a 92% conviction rate for prosecuted cases.
Over the past five fiscal years, 96 defendants have been
convicted of crimes tied to illegal gambling, receiving prison
sentences averaging between five and 33 months in federal
prison.
“Over the last few years, we’ve seen a number of online
crypto casinos offering options for sports betting,” said IRS-
CI Chief Guy Ficco. “Many are based offshore and don’t follow Know Your Customer protocols,
specifically to attract anonymous users who may be involved in illicit activity. If you want to
gamble, do it safely and legally.”
When placing bets, use state-licensed gambling operations and platforms that are legal in your
jurisdiction. Steer clear of offshore and crypto-based gambling platforms that attract anonymous
users by avoiding Know Your Customer protocols. Make sure to report all gambling winnings as
taxable income to avoid civil and criminal penalties from the IRS and never accept payment to
place bets on behalf of someone else or gamble to obscure the source of funds. You could find
yourself in the middle of a money laundering conspiracy.
In February, 10 men pleaded guilty to managing a multimillion-dollar sport bettering operation
deemed Red44. Bookmaking and betting activities took place online via an offshore server
located in Costa Rica. The organization accepted an estimated $2 billion in wagers during its
existence. As part of plea agreements, the defendants agreed to pay more than $19.7 million in
excise tax restitution to the IRS from their acceptance of wagers from sports betters across the
U.S. and to satisfy any income tax obligations that remain outstanding.
Sports enthusiasts who are unsure about their tax obligations or have questions about reporting
gambling income are encouraged to consult tax professionals or visit the official IRS website for
guidance. Ignorance of the tax law does not exempt individuals from their responsibilities.
For more information on reporting gambling income and other tax-related inquiries, visit the IRS’