Is It Gambling or Not? IRS Urges Public to Stick With State-Licensed Betting Platforms

“No matter what they call themselves, prediction markets are gambling platforms, plain and simple. By ignoring our laws, prediction markets are running illegal operations,” said New York Attorney General Letitia James.  Attorneys General: Prediction Markets Are Illegal Gambling.

The line between gambling and investing has never been murkier, with federally regulated prediction markets increasingly resembling sportsbooks. Yet the Internal Revenue Service (IRS) is telling Americans to stick with state-licensed betting platforms when gambling. With prediction markets licensed by the federal government, the IRS directive could leave consumers wondering: Is it gambling or not?

Ahead of the football season, the busiest time of the year for sports betting, the IRS is reminding the public that illegal gambling is often linked to other crimes, including money laundering.

“Illegal gambling isn’t just about placing unlawful bets. Our investigations routinely uncover money laundering and tax crimes tied to illegal gambling operations. Following the money allows us to dismantle larger criminal networks,” said IRS Criminal Investigation Chief Jarod Koopman.

Attorneys General: Prediction Markets Are Illegal Gambling

The IRS notice warns taxpayers to “steer clear of illegal gambling operations.” Numerous state attorneys general say sports prediction markets are running just that—unlicensed, illegal gambling.

“No matter what they call themselves, prediction markets are gambling platforms, plain and simple. By ignoring our laws, prediction markets are running illegal operations,” said New York Attorney General Letitia James.

However, the federal government, through the Commodity Futures Trading Commission (CFTC), continues to assert its exclusive jurisdiction over sports trading on prediction markets. The CFTC says sports trading is not gambling but an “innovative” financial product.

https://www.casino.org/news/is-it-gambling-or-not-irs-urges-public-stick-with-state-betting-platforms/