Gambling in these markets is already large, with $136 billion placed in legal sports betting markets since the 2018 Supreme Court ruling but the market seems likely to grow substantially over the next few years. This is an important topical issue because in May 2018, the United States Supreme Court declared the Professional and Amateur Sports Protection Act (PASPA) to be unconstitutional, thus opening the way for individual states to introduce legislation permitting sports betting.Īs of June 2022, thirty states had legalized sports betting in various forms and other states are likely to follow (see Fig. 1 This paper examines how the current US tax code affects the incentives for taking risk by betting on sports. Research on gambling has also pointed to the role that taxation has played in determining the form and location of betting markets and in affecting the extent of losses experienced by different groups. Classic contributions including Domar and Musgrave ( 1944), Feldstein ( 1969) and Poterba ( 2002). Supplemental records include unredeemed tickets, payment slips, and winnings statements.It is well known that the tax treatment of investment gains and losses can have an important effect on risk-taking decisions.

Lotteries: A record of ticket purchases, dates, winnings, and losses.

Supplemental records include unredeemed tickets and payment records from the racetrack. A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets.

Racing: Such as horse, harness, dog, etc.

Supplemental records include any receipts from the casino, parlor, etc.

Bingo: A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets.

Casino credit card data indicating whether the credit was issued in the pit or at the cashier’s cage. The number of the table at which you were playing.

Table games: Such as twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc.

Slot machines: A record of the machine number and all winnings by date and time the machine was played.

Keno: Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check-cashing records.

For specific wagering transactions, the following items should be used to support winnings and losses:

Caim casino winnings to irs