With NFL betting underway, the federal government is reminding US sports bettors to play safely and legally this football season, warning that illegal sports betting persists despite widespread adoption nationwide.
In a Thursday press release issued hours before the start of NFL betting, the IRS said the illegal US sports betting market is worth more than $700 million. Federal agencies have not often addressed sports betting following the repeal of PASPA in 2018, as legal US sports betting is primarily regulated at the state level. A potential federal legislative framework is being considered in Washington, albeit without much traction.
“Sports betting has grown exponentially in the past five years and is more common than ever. While online gambling is easily accessible, it’s not always legal,” IRS criminal investigation chief Guy Ficco said in the release. “As this year’s football season kicks off, IRS-CI special agents are continuing to monitor trends and using our expertise to root out criminal activity related to illegal gambling like money laundering and tax evasion.”
NFL betting expected to grow
The American Gaming Association estimates NFL betting handle will reach a record $35 billion this year.
That total would mark a 31% jump in legal handle from last year when Americans bet $26.7 billion on the NFL.
Super Bowl betting exceeded an estimated $1.3 billion earlier this year.
IRS sports betting investigations
The IRS touted its role in several high-profile criminal cases, including one involving MLB star Shohei Ohtani’s former interpreter, Ippei Mizuhara.
In May, Mizuhara pleaded guilty to federal charges of stealing $17 million from Ohtani’s bank account. He used the money to pay off gambling debts owed to Mathew Bowyer, who was in charge of an illegal bookmaking operation.
Bowyer also recently agreed to plead guilty to federal charges.
Additional investigation leads to prison terms
Another recent investigation in Ohio saw two men sentenced to lengthy prison terms.
Christos Karasarides Jr. and Ronald DiPietro were charged with running an illegal gambling operation, and sentenced to 21 and more than nine years in prison, respectively.
The pair also never reported the earnings from their sham businesses on federal tax returns.
NFL betting winnings are taxable
The IRS also reminded players that winnings from sports wagering, including NFL betting, are taxable income at the federal level.
Some states, including larger sports betting markets like New York and Illinois, also tax gambling winnings.
