With football season now underway, the Internal Revenue Service's Criminal Investigation unit is urging taxpayers to play by the rules when it comes to sports betting.
IRS-CI noted that nearly 50% of Americans have bet on sports at some point in time and reminded U.S. taxpayers to wager safely and legally this football season. It pointed out that illegal gambling activities can result in criminal charges ranging from money laundering to tax evasion.
According to the American Gaming Association, nearly 68 million Americans were expected to wager an estimated $23.1 million on this year's Super Bowl. The annual revenue from the illegal sports betting market in the United States is estimated at more than $700 million. Between fiscal years 2020 and June 2024, IRS-CI said it initiated 151 investigations into illegal gambling activity totaling more than $178.8 million and resulting in 71 sentencings with an average prison term of over two years.
"Sports betting has grown exponentially in the past five years and is more common than ever," said IRS Criminal Investigation Chief Guy Ficco in a statement Thursday. "While online gambling is easily accessible, it's not always legal. 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."
Earlier this year, IRS-CI and Homeland Security Investigations special agents uncovered that Major League Baseball player Shohei Ohtani's former interpreter Ippei Mizuhara had engaged in gambling activity with an illegal bookmaking operation for several years. Mizuhara illegally transferred almost $17 million from Ohtani's bank account, without the player's knowledge or permission, to pay off his substantial gambling debts. From November 2021 to March 2024, Mizuhara used Ohtani's password to successfully sign into the bank account and change the account's security protocols, the registered email address and telephone number on the account so bank employees would call him — not Ohtani — when attempting verification. In furtherance of the scheme, Mizuhara impersonated Ohtani and used his personal identifying information to deceive the bank's employees into authorizing wire transfers from the bank account. In total, Mizuhara called the bank and impersonated Ohtani on approximately 24 occasions.
The IRS is encouraging individuals to keep detailed records of all gambling transactions, including bets placed, winnings received and losses incurred. Sports enthusiasts who are uncertain 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.
