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Taxes on gambling winnings in sports

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Taxes on gambling winnings
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Taxes on gambling winnings © Feng Yu/Shutterstock.com

Taxes on gambling winnings

Did you place your bets in a March Madness office pool? Don't feel guilty. Gambling is inevitable.

That was the determination in 1976 of the Commission on the Review of the National Policy Toward Gambling, which spent three years studying gambling in the United States.

"No matter what is said or done by advocates or opponents of gambling in all its various forms, it is an activity that is practiced, or tacitly endorsed, by a substantial majority of Americans," the report noted almost 40 years ago.

Judging by the continually expanding gambling options across the country, Americans' support of gambling hasn't waned. Almost every state and the District of Columbia sanction some sort of gambling.

The reason is the same one that tempts bettors: money. The gambling industry is an important part of many states' economies. Gambling proceeds also help fund education programs or special state projects.

Then there are the taxes. In most states, tax collectors get a portion of residents' winnings. So does the IRS, which collects taxes on gambling winnings since they are considered income.

Here's a look at some betting that could boost state coffers and the U.S. Treasury if all the winners pay their taxes.

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