IRS urges sports bettors to wager only through licensed sportsbooks

As the 2024 NFL season gets underway, the Internal Revenue Service (IRS) has issued a warning to sports bettors across the country, urging them to wager only through licensed sportsbooks. The IRS Criminal Investigation Unit (IRS-CI) delivered a letter reminding taxpayers of the legal risks associated with illicit gambling, as well as the importance of adhering to gaming regulations. 

According to the American Gaming Association, 68 million people bet on Super Bowl LVIII, a 35% increase from 2023. IRS-CI Chief Guy Ficco highlighted the growing prevalence of sports betting and emphasized the agency’s commitment to rooting out illegal gambling operations, which are often linked to money laundering and tax evasion.

Illegal gambling activities have garnered attention this year, with several high-profile cases surfacing. Earlier, Ippei Mizuhara, the former interpreter for Major League Baseball star Shohei Ohtani, pleaded guilty to federal charges for participating in an illegal gambling operation. 

Mizuhara had siphoned nearly $17 million from Ohtani’s account to cover gambling losses. Another case saw former NBA player Jontay Porter facing up to 20 years in prison after being involved in a scheme to place bets using insider information to settle gambling debts.

The IRS reminded bettors that winnings must be reported on tax returns and urged individuals to maintain detailed records of their gambling activities. Taxpayers unsure of their obligations are encouraged to consult professionals or visit IRS.gov for guidance.

IRS-CI is responsible for investigating financial crimes, including those linked to illegal gambling. With more than a 90% conviction rate, the agency continues to prioritize efforts in ensuring compliance within the sports betting industry.