IRS Cracks Down on Illegal Sports Gambling as Football Season Looms

Increased IRS Scrutiny on Illegal Sports Betting During Football Season

As the popularity of legal sports betting continues to rise, the Criminal Investigation unit of the Internal Revenue Service (IRS-CI) is ramping up efforts to combat illegal sports gambling activities. This crackdown aligns with the start of the football season, a period that typically sees a surge in betting activity.

IRS-CI’s Focus on Illegal Gambling Operations

The IRS-CI actively investigates a wide range of illegal gambling activities each fiscal year, opening more than 30 cases and successfully securing convictions in 92% of those brought to trial. Over the past five years, nearly a hundred individuals have been convicted and sentenced to prison terms spanning from five months to nearly three years for offenses connected to unlawful gambling.

IRS-CI Chief Guy Ficco highlighted the rise of online crypto casinos venturing into sports betting. These platforms, often operating from overseas jurisdictions, frequently bypass essential customer verification procedures, allowing users to gamble anonymously. This lack of oversight raises concerns over potential illicit activities and reinforces the importance of choosing legal and secure betting options.

Recommendations for Safe and Legal Sports Betting

The IRS urges bettors to only use gambling platforms that are licensed and regulated within their state to minimize legal risks. Offshore and cryptocurrency-based gambling sites commonly avoid customer identification processes, which increases the likelihood of involvement in illegal transactions.

It’s important to remember that all winnings from gambling must be reported as taxable income. Failure to declare gambling income can lead to severe civil and criminal consequences. The IRS further warns against placing bets on behalf of others or using gambling as a way to disguise the origin of funds, as such activities could be associated with money laundering offenses.

For those uncertain about tax responsibilities related to gambling winnings, IRS-CI advises consulting experienced tax professionals or referring directly to IRS resources. Ignorance of tax laws will not exempt individuals from compliance and legal obligations.