Question regarding taxes w/ FanDuel / DraftKings and the like...

[mayberryotis]

Longtime online / offshore bettor here (I go all the way back to English Sports Betting) who lives in Ohio.
Over the past 25 years, I've been dealing with the hassles of funding my accounts via MG, WU, cashiers checks, CC, and most recently Bitcoin.
Payouts have been just as challenging, though bitcoin has made things somewhat less of a headache.
Anyway, sportsbook wagering becomes legal in Ohio as of January 1st. I've been looking forward to this day for a LONG time, and this evening I began signing up on some of the sites which will soon offer sportsbook wagering. However, in doing so I realized the MAJOR drawback -- paying taxes on winnings. Some of these sites offer a tax calculator, which will estimate how much in taxes you should expect to dish out based on winnings. Seems like the headaches and the sending / receiving fees to and from offshore books are a bargain compared to the fees one should expect from wagering within the U.S.
Am I missing something here? So if I win $100 here, $100 there and at the end of the year my winnings add up to more than $600 I get taxed both at the federal and state level???
I mean, talk about taking a chunk out of profits that are already a struggle to win.
Other than the ease of sending / receiving funds, someone please give the the pros of wagering in the U.S. rather than offshore.
Thanks in advance!

 

[rwjr]

@mayberryotis ? Lve your username

Gonna take a wild shot ? in the dark & guess that your Drinker ? ?

The Andy Griffith Show is great ?
Wholesome family Tv ?


One of these days I gotta get to My. Airy , NC ?

 

[rwjr]

@mayberryotis ? Lve your username

Gonna take a wild shot ? in the dark & guess that your Drinker ? ?

The Andy Griffith Show is great ?
Wholesome family Tv ?


One of these days I gotta get to Mount Airy , NC ?

 

[HacheMan]

Welcome aboard Otis

You make excellent points and have legit concerns

Let's give some of the others who live in legal states (I'm in Florida) a chance to chime in

 

[Knightrofins]

Welcome fellow former ESB player

 

[brendanjack]

Seems like in Ny state any sports bet win above 600 is taxed however it’s cumulative. So they have us by the balls. Wish my local didn’t die miss the roach coach meeting on mondays.

 

[brendanjack]

They didn’t legalize it to fill our pockets . Seriously it’s fucking comical every time you turn on the tv gambling ads. They push it so hard and then at end if you know someone with a problem call 1800eatshit.they might as well give out promotional heroin. Miss my local

 

[brendanjack]

https://www.google.com/search?q=fan...#fpstate=ive&vld=cid:19803cd0,vid:8-__w_O-R7Y

 

[Willie99]

The short answer is yes, as you described it, you're taxed. But it's probably a tad more complicated than that.

I haven't seen a 1099 yet for sports betting from a legal sports book. But I have seen them for Daily Fantasy players

They report your gross winnings on your 1099, and you have to deduct your losses on Schedule A. In many, but not all, cases there will be no adverse tax consequences if you didn't make a profit. In my example, the taxpayer had 7 figures in winnings and 7 figures in losses.

However, in some states like CT, where they don't allow gambling losses, you're fucked using this approach. My client happened to be from NJ. I'm not looking forward to this upcoming tax season, there might be a lot of unhappy taxpayers.

Another approach you can take is to call yourself a professional gambler. In short, you treat your gambling like a business and it changes the whole approach to things. But there are certain hurdles you have to clear to qualify as a professional gambler. You might seek the advice of a knowledgeable and engaged tax professional

Good luck

 

[Willie99]

As I ponder this question and consider the potential tax consequences, especially in Connecticut, I'm thinking there may actually be an offshore revival

No joke, to some extent anyhow

 

[RXLadyanne]

Welcome to TheRX Forum @mayberryotis

For me, every situation has its pros and cons. How are you going to gain profit from all of this experience will always depend on you.

Please don't forget to visit our page "Find the right US Sportsbook for you" for future reference.

 

[bigbet1234]

Longtime online / offshore bettor here (I go all the way back to English Sports Betting) who lives in Ohio.
Over the past 25 years, I've been dealing with the hassles of funding my accounts via MG, WU, cashiers checks, CC, and most recently Bitcoin.
Payouts have been just as challenging, though bitcoin has made things somewhat less of a headache.
Anyway, sportsbook wagering becomes legal in Ohio as of January 1st. I've been looking forward to this day for a LONG time, and this evening I began signing up on some of the sites which will soon offer sportsbook wagering. However, in doing so I realized the MAJOR drawback -- paying taxes on winnings. Some of these sites offer a tax calculator, which will estimate how much in taxes you should expect to dish out based on winnings. Seems like the headaches and the sending / receiving fees to and from offshore books are a bargain compared to the fees one should expect from wagering within the U.S.
Am I missing something here? So if I win $100 here, $100 there and at the end of the year my winnings add up to more than $600 I get taxed both at the federal and state level???
I mean, talk about taking a chunk out of profits that are already a struggle to win.
Other than the ease of sending / receiving funds, someone please give the the pros of wagering in the U.S. rather than offshore.
Thanks in advance!

You live in Fairfax, Ohio?

 

[raiders72]

Don't use PayPal or hit a 300-1 shot and you won't have to worry about getting a 1099. Fantasy is a different story. I think it's $600, not sure. At least those are the figures in my state.

 

[Willie99]

Had to do a little research since this is a relatively new topic and will be greatly expanded for me in 2022 because of legal sports gambling exploding (became legal in CT 10/19/2021)

Sportsbooks are required to issues tax documents if your net earnings are greater than $ 600, not gross earnings. This difference is huge, since it means a much smaller % of taxpayers will receive tax documents.

It also means my concerns for CT residents getting screwed has been mostly mitigated

And while I think this is the best approach for the taxpayers, and the fairest, it's also inconsistent with the IRS code which requires gambling winnings to be reported as other income and gambling losses to be an itemized deduction. Treating it strictly by the code increases AGI, and would have significant unintended tax consequences like reducing EIC and increasing the costs of health insurance. And the state of CT would realize a surge in tax revenues

 

[Knightrofins]

Willie,

Do we know what "net earnings" are?

Is it total wins minus total losses for the year?

Is it total cashouts minus total deposits for the year?

Please let us know if you have any clients who received any 1099's or W2G's this tax season from sportsbooks and how the books came up to those numbers

 

[PatsFan1283]

It is total wins - total losses....Withdrawing has nothing to do with it.

The question of "Once people start getting 1099s and W2s from these legal books, will offshore get a revival? Since paying taxes on gambling winings obviously sucks" is an interesting one. I think that probably will help locals more than offshore though.

I just don't think the avg bro (90% of which probably never used offshore) will wanna go through all the hoops associated with offshore (no pun intended)

Most of them ain't getting 1099's or W2s every year anyway obviously. And most people just don't really care about value/saving money, they just wanna get their dick hard to a 5 team same game parlay on MNF. They don't care whether the issue is -107 or -115

 

[raiders72]

Had to do a little research since this is a relatively new topic and will be greatly expanded for me in 2022 because of legal sports gambling exploding (became legal in CT 10/19/2021)

Sportsbooks are required to issues tax documents if your net earnings are greater than $ 600, not gross earnings. This difference is huge, since it means a much smaller % of taxpayers will receive tax documents.

It also means my concerns for CT residents getting screwed has been mostly mitigated

And while I think this is the best approach for the taxpayers, and the fairest, it's also inconsistent with the IRS code which requires gambling winnings to be reported as other income and gambling losses to be an itemized deduction. Treating it strictly by the code increases AGI, and would have significant unintended tax consequences like reducing EIC and increasing the costs of health insurance. And the state of CT would realize a surge in tax revenues

edit - I thought it was just fantasy but I'm wrong.

 

[Knightrofins]

It is total wins - total losses....Withdrawing has nothing to do with it.

The question of "Once people start getting 1099s and W2s from these legal books, will offshore get a revival? Since paying taxes on gambling winings obviously sucks" is an interesting one. I think that probably will help locals more than offshore though.

I just don't think the avg bro (90% of which probably never used offshore) will wanna go through all the hoops associated with offshore (no pun intended)

Most of them ain't getting 1099's or W2s every year anyway obviously. And most people just don't really care about value/saving money, they just wanna get their dick hard to a 5 team same game parlay on MNF. They don't care whether the issue is -107 or -115

Lets just say I opened account on 2/1/22

I funded $1,000 in the account

On 12/31/22, my account now has $4,000 is in. I never funded the account after the initial 1k and never withdrew.

Are you saying that I will receive either a W2G or 1099 for 3k? How sure are you on this?

 

[raiders72]

Draft Kings
DraftKings issues Form W-2Gs for any Sportsbook Big Wins as required by the IRS. Big Wins are defined below based on wager type.

Sportsbook, Table Games, and Live Dealer:

• Each time a player has a payout of $600 or more (reduced for the original wager) and is 300x (+30000) the amount wagered. If the player has another payout meeting these criteria in the same day for the same game type, this activity will be aggregated into a single W-2G.
• We will withhold 24% federal income tax of the total reportable winnings if they equal or exceed $5,000 and the winnings are at least 300X times the wager.

Paid Pool Betting:

• Each time a player has a payout of $600 or more (reduced for the original wager) and a return 300X the amount wagered.
• We will withhold 24% federal income tax of the total reportable winnings if they equal or exceed $5,000.

Slot games:

• Each time a player has gross winnings of $1,200 or more (not reduced by wager).

Keno games:

• Each time a player has net winnings of $1,500 or more.

If you have any other questions or concerns, please don’t hesitate to ask!

Best,

 

[raiders72]

It actually is $600 and 300-1. I sent an email to them and their reply is above.