IRS-CI Urges Sports Bettors to Play By the Rules This Football Season

On the day of the 2024 NFL season kicking off on Sept. 5, the IRS Criminal Investigation unit reminded taxpayers that illegal sports gambling can result in criminal charges ranging from money laundering to tax evasion.

According to the American Gaming Association, nearly 68 million Americans—a 35% increase from 2023—wagered an estimated $23.1 million on last year’s Super Bowl. The annual revenue from the illegal sports betting market in the U.S. is estimated at more than $700 million, IRS-CI said.

Between fiscal years 2020 and June 2024, IRS-CI 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.

IRS-CI also noted that nearly 50% of Americans have bet on sports at some point in time.

“Sports betting has grown exponentially in the past five years and is more common than ever. While online gambling is easily accessible, it’s not always legal,” IRS-CI Chief Guy Ficco said in a statement. “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 Ippei Mizuhara, the former interpreter for Los Angeles Dodgers star player Shohei Ohtani, 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 addition, 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.

Mizuhara entered guilty pleas to bank and tax fraud charges in federal court on June 4 and is expected to be charged on Oct. 25.

Individuals who engage in sports betting activities are required to report their winnings on their annual tax return. The IRS encourages individuals to keep detailed records of all gambling transactions, including bets placed, winnings received, and losses incurred.

Sports fans who are unsure about their tax obligations or have questions about reporting gambling income are encouraged to consult tax professionals or visit the IRS website for guidance.