Published on: September 16, 2025, 10:59 AM.
Updated on: September 16, 2025, 10:59 AM.
- The IRS advises consumers to steer clear of offshore casino sites and sportsbooks.
- The IRS warns that these online betting platforms introduce significant risks to bettors.
During this football season, the IRS is urging sports bettors to utilize only licensed and regulated sportsbooks, both online and offline.
Football season marks the peak time for oddsmakers, as this sport garners more betting activity than any other. It also coincides with a rise in illegal sports gambling websites and local bookmakers.
Guy Ficco, Chief of IRS Criminal Investigation, leads a team of 2,300 agents spread across 20 field offices in the U.S. and 14 countries globally. In a discussion with ABC News, he emphasized that consumers should only patronize sportsbooks that possess valid sports wagering licenses in their respective states.
“If you engage with an untrustworthy site, your money, including any winnings, may be at risk,” Ficco stated. “Fraudsters have actively sought ways to exploit the financial system, including through online casinos, leading to a surge in identity theft-related crimes.”
In states where sports betting is sanctioned, the regulated sportsbooks are typically listed. For example, New Jersey’s Division of Gaming Enforcement provides information on approved sportsbooks.
User Protection Against Offshore Betting
While numerous unregulated online sportsbooks advertise to U.S. consumers, claiming regulation from jurisdictions like Malta, Gibraltar, or Curacao, Ficco asserts that users commonly face challenges regarding payouts, withdrawals, or account closures without adequate recourse.
Critics of offshore gambling platforms argue that foreign regulators primarily focus on protecting their own interests rather than ensuring compliance with foreign laws or providing essential consumer protections like fair odds and prompt withdrawals.
Many illegal online casinos and sports betting sites go to great lengths to imitate legitimate U.S.-based casinos to mislead consumers about their reliability.
The IRS mandates that taxpayers report all gambling earnings, regardless of the source being legal or illegal, on their annual income tax return (Form 1040 or 1040-SR).
Cryptocurrency and Gambling
Ficco highlighted that a substantial number of illegal gambling sites utilize cryptocurrencies, which adds layers of complexity and risk.
“The intricacies of cryptocurrency transactions are often unfamiliar to the majority of people, which heightens vulnerabilities. Therefore, I urge potential gamblers to conduct thorough research before placing any bets,” Ficco added.
A report from gaming consultancy Yield Sec reveals that illegal online gambling sites amassed approximately $67 billion in revenue over the past year, with unregulated betting increasing by 36%, making up 74% of the U.S. iGaming and online sports betting market.
The study by Yield Sec also indicates that nearly 90% of U.S. consumers have encountered illegal gambling content through various media outlets.