IRS out for sports betting wins
With April 15 Tax Day upon us, here’s all the key information sports bettors need to know before filing their federal and state income tax returns this year.
Millions who legally wagered on sports in 2023 face the sometimes-challenging task of how to determine what they may owe in taxes on gambling winnings, according to bookies.com.
Five states launched sports betting in 2023: Ohio, Massachusetts, Florida, Kentucky and Maine. Bettors in those states will be wrestling with sports wagering-related tax bills for the first time. Thirtyseven states had legalized sports betting before 2024.
All money earned from sports betting is taxable income. Thus, it could well impact both what you pay in federal and state income taxes.
The IRS allows you to deduct gambling losses up to the amount of your winnings, but only if you itemize all your deductions.
Therefore, it’s important to keep detailed records of the money you wager, what you win, and lose. You may be better off taking the standard deduction or itemizing once you run the numbers.
This all comes as the Bay State reported that last year, more than $6.2 billion was spent on sports wagering by over 1.6 million gamblers, generating more than half a billion in revenue for operators and hundreds of millions for the state, according to a new report presented by Gaming Commission staff this week.
Retail sports wagering first went live in Massachusetts on Jan. 31, 2023, and online gambling followed soon after, on March 10 of that year. Since then, betters have lost $594.9 million to one of the state’s eight licensed online bookmakers or at one of three licensed casinos.
When the law was sent to Gov. Charlie Baker’s desk in the summer of 2022, sports wagering was expected to bring in around $30 million in tax revenue and $70 million in licensing fees. In the first year, the Gaming Commission learned Thursday, the state actually made $118.5 million in total.
This year’s Super Bowl alone, according to the report presented to the commission, saw more than 3.3 million bets made, generated $9 million in wagers, and sent $1.8 million to the Treasury’s coffers.
Over 38,000 people have made use of the state’s mandated Responsible Gaming programs offered by the various sports book operators, and hundred of people have voluntarily identified themselves as a problem gambler and excluded themselves from the market.
The Gaming Commission has issued $90,000 in fines to operators in the last year for accepting unlawful wagers, most of which were voluntarily disclosed by the operators and over college sports involving a Massachusetts team or a sport that wasn’t approved for betting by the commission.