Online gaming wins, from DraftKings etc..

Anyone have experience as to what forms and amounts issued from Draft Kings or other online places, for wins, that are considered "report-able" to the IRS?

CO just started online gaming last May, and I have a client who stated he has some LARGE wins.
I looked at the IRS req, but I think I figured out it said only $600? That could be alot of W2G's or does Online gaming issues ONE EOY W2G?

DFK sent client an email, saying they got a late waiver from the IRS to not get forms out until Feb 28.

(As I side note, I started betting on last season's football games. I never had a win over $100.)

 

My son won $50,000 in some contests last year. He lost some back and got one EOY statement...I think it was a W-2G. I will check and update if the form name is incorrect.

 

With sports betting it has to be at least $600 AND have odds of 300 to 1 or longer to be reported to the IRS I thought. Did he hit a real long shot?

 

He won contests with large numbers of players.

 

I believe contests are treated differently from sports wagers. FWIW, I have won six figures on sports bets multiple times and it never generated any paperwork

 

If it is a true contest, the limit to trigger a tax document is $600 and is a 1099-MISC, not a W2G.

I won a score pick-em thru a local TV station a few years back and that is how they handled the contest.

As for how Draftkings handles sport betting and taxes, this page might help.
https://help.draftkings.com/hc/en-us/articles/1500000394321-Are-winnings-reported-to-the-IRS-

 

Yeah, that can get you over 300 to 1, congrats to him!

But I assumed @MGinCO was talking about sportsbetting on DraftKings, which is legal in CO. Making sportsbets that are 300 to 1 or higher are less common and winning them are really uncommon! But people do do it. I would be curious to know what he hit if so.

 

No sports betting here in Texas; just the contests.

 

Once I actually meet with the client and he has W2G's etc...from DFK, I will let you know.
Curious as hell, as what he said was large winnings!

 

Other tax related thing to keep in mind for those who take sports bet/online casino withdrawals with Paypal. At this time you will be issued a 1099K if you have paypal deposits over 20,000 and 200 transactions in a year.

However, included in the new stimulus bill, payment processors (Paypal) will be required to create 1099K's for an annual deposit total over $600. This takes effect after this year and is detailed in sec. 9674 of the new bill. https://www.govtrack.us/congress/bills/117/hr1319/text

I stopped taking withdrawals earlier this year so I didn't hit the old limit.