IRS sends urgent reminder to US iGaming enthusiasts

Article by : Charles Perrin Sep 10, 2024

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Online gamblers will have to be more mindful of their activities as the Internal Revenue Service (IRS) will be watching and they will be ready to pounce.

A notice was issued by the IRS last week to remind players that ALL winnings will be subject to taxable income.

While there had been a misperception in the past over gambling and taxable income, the IRS has warned players they should keep detailed records of all winnings and declare them.

Whether serving as the primary source of income or if gambling is deemed another source of income, the IRS has claimed it doesn’t matter whether winnings by players were gained from horse racing, sports betting, or playing slots.

The IRS in its notice, revealed that “illegal activities can result in criminal charges ranging from money laundering to tax evasion”.

It states that individuals should post their winnings on their annual tax returns before submission.

While there are some caveats, players must reveal gambling losses accrued over the financial year too.

Those who fail to correctly report and pay taxes on gambling activities will be subject to fines, and the IRS takes a dim view of the matter.

As far as online casinos are concerned, they do some of the leg work by providing a Form W2-G at tax time to remind players.

Many regulated online casinos will also automatically withhold a portion of your winnings and handle the accompanying paperwork.

Meanwhile, any winnings that have been garnered from an unlicensed online casino are still deemed as taxable income by the IRS.

To clear any doubt, the IRS insists that players should consult a financial professional or accountant, so they don’t overpay on their taxes.

Ignorance is no longer considered as a mitigating factor. iGaming enthusiasts have been warned, so they must play ball in the future or face up to some harsh consequences.