Just a quick reminder for all you folks still in the running for your office pool's college basketball championship jackpot: Gambling winnings are taxable income.
Yes, even office pools.
And yes, even illegal office pools.
Illegal office pools? Yep. In Washington state at any rate
Washington officials say that those ubiquitous
betting pools based on NCAA bracket sheets are technically illegal.
But don't expect Evergreen State lawmen to bust into your office and confiscate the pool money. The state's Gambling
Commission has bigger fish to fry.
Similarly, the IRS isn't going to come after every office worker — or telecommuter like the hubby, who made a bit last year on his office's fantasy football league, but gave some of it back this spring with his NCAA basketball picks — who pockets a a bit a pool cash.
Realistically, there's no way any tax collector, state or local, can keep track of all the illegal but friendly (or not so friendly if you get on your bookie's bad side) bets that are placed on various sporting events.
Still, technically the illegal earnings are taxable income.
Internet bets could mean big tax bucks: Another form of illegal gambling is a bigger thorn in the side of lawmen and the IRS: online betting.
U.S. lawmakers have tried to put an end to Internet gambling via the Unlawful
Internet Gambling Enforcement Act, enacted in 2006. That, however, doesn't seem to be working.
A recent study by PriceWaterhouseCoopers estimates that the
United States could raise nearly $52 billion in revenue over the next decade by lifting the
three-year-old online gambling ban and taxing the winnings.
Despite the law, the accounting firm figures that Internet
gambling is about 22 percent higher now than it was in 2007 because
U.S. online gambling, even though illegal, keeps growing.
U.S. Rep. Barney Frank (D-Mass.) reportedly is planning to reintroduce a bill this year to
overturn the ban.
The ban was enacted when Republicans
controlled both the House and Senate, as well as the White House. Gambling advocates hope the political change, as well as the U.S. Treasury's need for new
revenue in the wake of bailout and stimulus packages, will boost chances for laws regulating and taxing the activity.
In the meantime, remember that if you do win a nice chunk of change on the Tar Heels–Spartans match-up tonight, be sure to report it on your taxes next year.
OK, quit laughing. I had to say it!
Sportsbook Review
Yes i believe we should legalize onling gambling and tax the hell out of earnings.
My Journey
Not that I am old now, but while in law school, I knew a “guy” who would play A LOT of online poker. When that 2006 law hit…the bigger sites (i.e. more reputable) stopped taking American Dollars, leaving smaller (read: less reputable) sites still taking money.
His debit/credit card would simply read…int’l transaction for something stupid like a phone card. But guess what? He played poker and the gov’t didn’t take in tax dollars.
While I am a libertarian, I am not one of the nutty ones screaming for legalization of herion, but I mean come on Online Gambling is going to happen either way – COLLECT SOME TAX DOLLARS.
It should be noted that some of the bigger guys in the industry are even traded on stock exchanges around the world. (Lon:PRTY – Interestingly when that law came out it went from 1,070 to 400ish a share!)