US Taxation of Gambling Winnings and Incentives to Bet

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Title: US Taxation of Gambling Winnings and Incentives to Bet
Authors: Whelan, Karl
Permanent link: http://hdl.handle.net/10197/13073
Date: Aug-2022
Online since: 2022-08-17T15:29:49Z
Abstract: Sports betting is growing rapidly in the US after its legalization by the Supreme Court in 2018. This paper describes the treatment of gambling winnings and losses in the federal tax code and shows how the system may incentivize some gamblers to substantially increase the scale of their betting in order to have a chance to win. This incentive stems from the fact that gambling losses can only be deducted if taxpayers are filing for itemized deductions, meaning the scale of gambling losses has to be large enough to push a taxpayer’s eligible deductions over the standard deduction. This incentive to engage in large-scale betting applies mostly to lower and middle-income households.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Start page: 1
End page: 24
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP2022/22
Copyright (published version): 2022 the Author
Keywords: Sports BettingGamblingIncome tax
JEL Codes: D81; H24; L83
Language: en
Status of Item: Not peer reviewed
This item is made available under a Creative Commons License: https://creativecommons.org/licenses/by-nc-nd/3.0/ie/
Appears in Collections:Economics Working Papers & Policy Papers

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