IRS-CI urges US taxpayers to make safe, legal sports bets

Date: Sept. 2, 2025

Contact: [email protected]

WASHINGTON - Thinking about making a sports bet this NFL season? Bet safe. Bet legal. IRS Criminal Investigation (IRS-CI) investigates a variety of offenses tied to illegal gambling and encourages U.S. taxpayers to protect themselves when making wagers.

Each fiscal year, IRS-CI initiates over 30 illegal gambling cases, obtaining a 92% conviction rate for prosecuted cases. Over the past five fiscal years, 96 defendants have been convicted of crimes tied to illegal gambling, receiving prison sentences averaging between five and 33 months in federal prison.

"Over the last few years, we've seen a number of online crypto casinos offering options for sports betting," said IRS-CI Chief Guy Ficco. "Many are based offshore and don't follow Know Your Customer protocols, specifically to attract anonymous users who may be involved in illicit activity. If you want to gamble, do it safely and legally."

When placing bets, use state-licensed gambling operations and platforms that are legal in your jurisdiction. Steer clear of offshore and crypto-based gambling platforms that attract anonymous users by avoiding Know Your Customer protocols. Make sure to report all gambling winnings as taxable income to avoid civil and criminal penalties from the IRS and never accept payment to place bets on behalf of someone else or gamble to obscure the source of funds. You could find yourself in the middle of a money laundering conspiracy.

In February, 10 men pleaded guilty to managing a multimillion-dollar sport betting operation deemed Red44. Bookmaking and betting activities took place online via an offshore server located in Costa Rica. The organization accepted an estimated $2 billion in wagers during its existence. As part of plea agreements, the defendants agreed to pay more than $19.7 million in excise tax restitution to the IRS from their acceptance of wagers from sports betters across the U.S. and to satisfy any income tax obligations that remain outstanding.

Sports enthusiasts who are unsure about their tax obligations or have questions about reporting gambling income are encouraged to consult tax professionals or visit the official IRS website for guidance. Ignorance of the tax law does not exempt individuals from their responsibilities.

For more information on reporting gambling income and other tax-related inquiries, visit the IRS' Gambling Income and Losses Page.

IRS-CI is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90% federal conviction rate. The agency has 19 field offices located across the U.S. and 14 attaché posts abroad.