IRS Criminal Investigation tackles illegal activity tied to sports betting

Date: September 12, 2023

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WASHINGTON - As football season kicks off, U.S. taxpayers may engage in friendly wagers on their favorite teams, but when the game of chance turns into illegal criminal activity, IRS Criminal Investigation (CI) is ready to tackle. Illegal gambling activity can result in criminal charges ranging from money laundering to tax evasion.

Between 2021 and 2023, CI initiated more than 100 investigations into illegal gambling activity totaling more than $178 million. Of these, 89 cases resulted in indictments, with a 96% conviction rate for prosecuted cases. The average prison sentence for adjudicated cases was 23 months.

"Sports betting is all fun and games until funds are laundered and individuals fail to meet their tax obligations," said IRS Criminal Investigation Chief Jim Lee. "As this year's football season kicks off, CI special agents are leaning on public-private partnerships and paying close attention to data gleaned from a variety of sources such as currency transaction reports and suspicious activity reports to Forms 8300 that indicate criminal activity like money laundering and tax evasion."

In one such case, CI and FBI special agents uncovered a decades long illegal gambling business based in the greater Chicago area operated by Vincent Delgiudice, also known as "Uncle Mick." Delgiudice accepted wagers from approximately 1,000 gamblers on the outcome of sporting events, including major league baseball, college and professional basketball, college and professional football, and other professional and amateur sporting events. He often made bets at casinos to cover potential losses if his customers won. He then laundered his gambling profits internationally through cashier's checks and cash investments in businesses. Delgiudice was sentenced in March 2022 to 18 months in federal prison and ordered to forfeit $3.6 million for money laundering and operating an illegal gambling business.

Individuals who engage in sports betting activities are required to report their winnings on their annual tax return using Form W-2GPDF. Additionally, the IRS encourages individuals to keep detailed records of all gambling transactions, including bets placed, winnings received, and losses incurred.

Sports enthusiasts who are unsure about their tax obligations or have questions about reporting gambling income are encouraged to consult tax professionals or visit the official IRS website for guidance. Ignorance of the tax law does not exempt individuals from their responsibilities.

For more information on reporting gambling income and other tax-related inquiries, please visit IRS.gov.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.