Where It’s Legal
There are a couple of federal laws that directly influence sports betting in all fifty states, not just in Texas, that you should be aware of. The federal Wire Act prevents people from taking wagers over state lines.
Found in Texas Penal Code The good news for avid sports betting fans is that there are still legal options available to you. Online, offshore sportsbooks like the ones recommended on this site are perfectly safe and lawful options because they operate out of countries where sports betting has already been legalized. As they are regulated by gaming commissions and a set of laws, you can rest assured that you are participating in legal Texas sports betting.
Click the following link to learn more on Texas Sports Betting Laws. The Legal gambling age for Texas residents is Currently, land-based gambling in Texas can take place at two locations — Eagle Pass and Livingston. This gambling venue is able to offer Class II gaming, which includes video table games, slots, and bingo. Naskila Gaming in Livingston is currently just a high-stakes bingo hall and video gaming facility. It is presently embroiled in a court battle with the state of Texas, as lawmakers do not believe that the Alabama-Coushatta Tribe of Texas has legal right to open a gaming facility under the federal restoration law.
The Tribe believes that they do have this right, under the more recent Indian Gaming Regulatory Act. Naskila Gaming is able to operate while the court battle ensues, though we will be updating this page as the situation develops.
That being said, with such an overwhelming majority of lawmakers vocally against expanded gambling in the state, it may be a while before you see any more land-based gambling in Texas. There are two federal sports betting laws currently on the books in the United States: They are posted online at a multitude of sites. You can also look at the legal code of the United States, under the year that the laws were passed for the complete verbiage.
If you visit http: You will need to know what the names of the laws are, or what year they were passed in to help narrow the search down. Every Texas state law is can be found on their legislative website.
Yes, Bovada is legal in the state of Texas. This well respected online sportsbook is a fantastic choice for Texas residents, as it provides some of the best and fastest lines for sports betting in the country. Texas sports betting never looked as good as it did on Bovada. Using a credit card to make deposits at online sportsbooks is usually convenient, but sometimes fail. Because of this, we recommend using prepaid cards for deposits.
The funds have already been processed and transferred to the card. So long as the card is enabled to make online purchases and overseas transactions, you will not be subject to any further trouble depositing into your account.
You can join each sportsbook if you so choose. There are no limits on how many different sportsbooks you can join. What there is a limit on is how many accounts you have with a single sportsbook. The speed with which you receive your winnings depends entirely on what payout method you choose. In the ever-changing digital world we live in, you can now be paid by these online sportsbooks using cryptocurrency.
If you choose a more traditional payout method, like a check in the mail, it will take a little longer. The same goes for table games like blackjack, craps, all games that involve spinning a wheel, etc. The results are not tracked, which means paying the taxes is your responsibility. If you are cashing in a huge sports betting ticket , some prefer to be paid in chips instead of cash. If you are not a local to the casino you won at and have to fly with a ton of cash, the casino can fill out a form for you called a CTR explaining how you got the money but you are not required to pay taxes right then and there.
Most of the time, people lose on sports betting anyway, so hardly anybody has to think about this. Some bettors keep the cash somewhere off the books so there is no paper trail, but there are obvious inherent risks with that as well. It pertained to betting on sports in the United States, and banned it in all states except Nevada , Delaware , Montana , and Oregon.
Oregon and Montana are not currently active in handling sports wagering. Nevada, far and away the most flexible state to bet sports on allows you to bet on all kinds of things on all kinds of sports.
Delaware is looking to expand its sports betting privileges but for the time being only allows parlay bets on NFL games. In the end it would be up to a court. Well, some of the statements this player made are true: As to the rest The recognition of income is a long-decided principle in the United States based on the concept of Constructive Receipt of Income. As the IRS's Publication states, "You are generally taxed on income that is available to you, regardless of whether or not it is in your possession.
When there are no specific rules governing the online world, the rules of the real world govern. The rules for gambling income are quite clear. Repatriation of income as far as gambling is totally irrelevant.
Offshore casinos are considered by the IRS as just another taxpayer avoidance scheme see here. Repatriation of investment income isn't relevant, either. Let's say you have an investment in a hypothetical British company, BritCo Ltd. You will get a tax credit for any British taxes imposed on your investment, and you may be able to deduct investment expenses on your investment. Since there has yet to be a case in Tax Court on online gambling, it's unlikely you'll end up paying a frivolous penalty.
But you're going to lose. There have been many Tax Court cases dealing with the issue of constructive receipt. The opinion in a recent case, Millard v. Commissioner TC Memo notes, "Consequently, a cash method taxpayer constructively receives income as of the date that a check is received absent a substantial limitation.
The tax rules for online gambling are quite clear—the rules are the exact same as in the brick and mortar world of casinos. This may not be what the typical online gambler wants to hear, but it's the bitter truth. In this article, part 3 of 5 parts, I examine recordkeeping and professional status for online gamblers. Unfortunately, a lot of this material is, frankly, boring.
The original article can be found here. First, let's examine the situation for the casual or non-professional gambler. The Tax Code requires gamblers to record their wins and losses by session. You take all of your winning sessions for the year, add them together, and you come up with a result. Then you take all your losing sessions, add those up, and come up with a second number. However, you cannot net those two numbers! Well, you're probably thinking that there's no particular difference between netting and this result.
That's wrong, for three reasons. First, if you don't itemize your deductions because you don't have enough deductions to itemize you lose out on your gambling losses.
In such a situation your gambling losses are presumed to be part of your standard deduction. The prescribed method for handling gambling income and losses increases AGI even if the taxable income remains unchanged. This can limit some taxpayers' other deductions, including medical and miscellaneous itemized deductions. And gambling losses aren't deductible in the AMT.
So you ask, why not declare myself a "professional" gambler. A few years ago that would not have been possible. Luckily a gambler named Robert P. Groetzinger fought the IRS on this issue. In a case that made it to the Supreme Court, the court held that you can legally be a professional gambler. The most relevant portion of the opinion reads:. Respondent Groetzinger satisfied that test in Constant and large scale effort on his part was made.
Skill was required and was applied. He did what he did for a livelihood, though with a less-than-successful result. This was not a hobby or a passing fancy or an occasional bet for amusement. There are some caveats to this. Note the usage of full time, with regularity, and production of income for a livelihood. If you gamble in this manner, you can classify yourself as a professional. And, yes, you can be a professional gambler and lose.
Professional gamblers have a business. They file their gambling results on Schedule C. Their wins and losses are netted, they may deduct necessary and reasonable expenses i.
However, they are subject to self-employment tax Schedule SE. That tax equivalent to Social Security and Medicare is You do get to deduct half of your self-employment tax as an adjustment to income on line 30 of Form For some gamblers, it's cheaper for taxes to be an amateur than a professional.
Talk to a professional tax advisor before making the decision to become a professional gambler. There are several other caveats and limitations. Finally, the IRS has fought some taxpayers who have declared themselves professionals. The IRS has been relying on the literal wording of the Groetzinger decision; that a professional must be a "full time" gambler.
They have rejected that status for some gamblers who maintain other businesses. None of these cases have been decided in Tax Court yet. I think this is a losing position for the IRS. Consider a hypothetical professional gambler, John Smith. Smith plays in only the biggest poker tournaments of the year.
The remainder of the year he and his wife operate a successful jewelry store. He files two Schedule C's on his return. Is he a professional gambler? Of course he is, assuming that his goal is to earn income from gambling—" I believe that the IRS's position is wrong. If you're in this situation the IRS may fight you.
In conclusion, becoming a professional gambler should be decided on the basis of your skill in gambling , not your tax situation. However, you must keep your tax situation in mind. In this, the fourth of five parts of my series on taxes and online gambling, I'll examine state income taxes, withholding requirements, and some legal issues, including the Silver Platter Doctrine.
Americans not only pay federal income tax, we pay income tax to the state we live in. Additionally, New Hampshire and Tennessee tax only dividend and interest income. Every state with a state income tax taxes gambling income. The tax rate will depend on what bracket you fall into.