The Internal Revenue Service's Criminal Investigation division is targeting illegal activity tied to sports betting as the pro football season gets underway.
Between 2021 and 2023, IRS criminal investigators initiated over 100 investigations into illegal gambling totaling more than $178 million. Of those, 89 cases led to indictments, with a 96% conviction rate for prosecuted cases, and an average sentence was 23 months in prison for adjudicated cases.
"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 in a statement Tuesday. "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 case, IRS Criminal Investigation teamed up with FBI special agents to probe a longtime illegal gambling business based in the Chicago area that accepted wagers from around 1,000 gamblers on various sports, including Major League Baseball, college and professional basketball, and college and professional football. Vincent Delgiudice, also known as "Uncle Mick," often made bets at casinos to cover his potential losses in case his customers won, according to IRS CI, and allegedly laundered his profits internationally through cashier's checks and cash investments in businesses. He was sentenced in March 2022 to 18 months in jail and ordered to forfeit $3.6 million for money laundering and operating an illegal gambling business.
Taxpayers involved in sports betting are required to report their winnings on their annual tax return using Form W-2G. The IRS also wants individuals to keep detailed records of all their gambling transactions, including bets placed, winnings received, and losses incurred.
