Sports Betting Arbitrage - Taxes

[Cyclonefan710]

Can someone confirm to me how arbitrage betting is reported for taxes?

So if I bet both sides of the money line

Team A - bet $100 Profit $110
Team B - bet $100 Profit $110

I've locked in a profit of $10 profit but for tax purposes do I

Report winnings of $10

or

Report winnings of $110 and a $100 itemized loss.

Thanks

 

[Clonehomer]

Can someone confirm to me how arbitrage betting is reported for taxes?

So if I bet both sides of the money line

Team A - bet $100 Profit $110
Team B - bet $100 Profit $110

I've locked in a profit of $10 profit but for tax purposes do I

Report winnings of $10

or

Report winnings of $110 and a $100 itemized loss.

Thanks

Are you reporting $10 winnings?

 

[DSMCy]

I'm not following your example here. How can you bet and win both sides of a moneyline?


Either way, my understanding is that if your winnings are more than $600, the sports book will send you a 1099-MISC that you'll have to report on your taxes.

If you itemize your deductions, you can deduct your losses, up to the amount of your winnings. Most likely you'll have to track your losses yourself. The sportsbook probably won't send you that.

 

[BCClone]

Where is rhoho when he might actually help. Not with the winnings, but how you can claim losses.

 

[BCClone]

I'm not following your example here. How can you bet and win both sides of a moneyline?


Either way, my understanding is that if your winnings are more than $600, the sports book will send you a 1099-MISC that you'll have to report on your taxes.

If you itemize your deductions, you can deduct your losses, up to the amount of your winnings. Most likely you'll have to track your losses yourself. The sportsbook probably won't send you that.

Same way I understand it. Knew a guy who had a place keep all the losing pull tabs that people left. He would collect them every so often and keep them to count against his winnings when needed. Had to be messy.

 

[DSMCy]

Same way I understand it. Knew a guy who had a place keep all the losing pull tabs that people left. He would collect them every so often and keep them to count against his winnings when needed. Had to be messy.

He had to have thousands of those things, just to exceed the standard deduction LOL

This reminds me of the crazy coupon people you'd hear about a few years ago. Yah it's great that they are saving hundreds of dollars a month in groceries. They also spent about 40 hours a week tracking everything. My time is more valuable than that haha

 

[Cyclonefan710]

Are you reporting $10 winnings?

I'm giving an example. In this example it might not be $10 winnings it may technically be $110. I know there is lingo about it being done by session not necessarily by transaction. I will wait to see if a tax person responds.

 

[DSMCy]

I'm giving an example. In this example it might not be $10 winnings it may technically be $110. I know there is lingo about it being done by session not necessarily by transaction. I will wait to see if a tax person responds.

First of all, you're seeking tax advice on a sports message board, you'll get what you get lol

I'm not sure why you're focused on an "arbitrage" scenario. I feel I'm fairly active in sports betting and rarely if ever see a scenario like that.

Here's how I think about it, but I'll note that I'm a very small potatoes better so I don't exceed $600 in winnings. I also don't itemize so I don't track or deduct my losses.

You place a $1000 bet on Tampa Bay to win, at +100. Tampa Bay wins! Your net winnings are $1000. You have $2000 in your sportsbook account.
You bet $2000 on Iowa State to beat Kansas at +300. Dumb bet, ISU gets smoked. You have $0 in your sportsbook account.

2021 tax time. You'll get a 1099-MISC showing winnings of $1000. You'll owe income taxes on that $1000.
If you itemize your deductions, you could claim a loss of $1000 (you can deduct up to amount of winnings).

Not being a d!ck but this also isn't that hard to google...

Sports Betting Taxes Guide: How Do They Work? - The TurboTax Blog

Every year, I join a fantasy football league with my friends and every year, I lose. So for me, unfortunately, my limited sports gambling has no impact on my taxes. But if you frequently place bets on sporting events, and find yourself winning, it may have an impact on your taxes. With the US...

blog.turbotax.intuit.com

 

[Cyclonefan710]

First of all, you're seeking tax advice on a sports message board, you'll get what you get lol

I'm not sure why you're focused on an "arbitrage" scenario. I feel I'm fairly active in sports betting and rarely if ever see a scenario like that.

Here's how I think about it, but I'll note that I'm a very small potatoes better so I don't exceed $600 in winnings. I also don't itemize so I don't track or deduct my losses.

You place a $1000 bet on Tampa Bay to win, at +100. Tampa Bay wins! Your net winnings are $1000. You have $2000 in your sportsbook account.
You bet $2000 on Iowa State to beat Kansas at +300. Dumb bet, ISU gets smoked. You have $0 in your sportsbook account.

2021 tax time. You'll get a 1099-MISC showing winnings of $1000. You'll owe income taxes on that $1000.
If you itemize your deductions, you could claim a loss of $1000 (you can deduct up to amount of winnings).

Not being a d!ck but this also isn't that hard to google...

Sports Betting Taxes Guide: How Do They Work? - The TurboTax Blog

Every year, I join a fantasy football league with my friends and every year, I lose. So for me, unfortunately, my limited sports gambling has no impact on my taxes. But if you frequently place bets on sporting events, and find yourself winning, it may have an impact on your taxes. With the US...

blog.turbotax.intuit.com

Cool way to explain a non arbitrage scenario. I’ve made $6k in a couple months with arbitrage it’s worked for me. I just want to know the proper way to report for taxes. Maybe I’ll have to go someone where to get the answer. I certainly didn’t think someone would get offended by me making a post about it in the off topic forum.

 

[goody2012]

Can someone confirm to me how arbitrage betting is reported for taxes?

So if I bet both sides of the money line

Team A - bet $100 Profit $110
Team B - bet $100 Profit $110

I've locked in a profit of $10 profit but for tax purposes do I

Report winnings of $10

or

Report winnings of $110 and a $100 itemized loss.

Thanks

You cannot net your wins/losses. Each must be reported individually.

 

[DSMCy]

Cool way to explain a non arbitrage scenario. I’ve made $6k in a couple months with arbitrage it’s worked for me. I just want to know the proper way to report for taxes. Maybe I’ll have to go someone where to get the answer. I certainly didn’t think someone would get offended by me making a post about it in the off topic forum.

haha sorry just messing with you.

I'm still not clear what bets you are placing.
Can you post an actual example of bets you've made?

If you only have $6K in net winnings, then you'll get a 1099 showing $6K that you'll have to claim as income.

 

[Tailg8er]

I don't think I've seen any scenarios on Draft Kings where you could bet both sides of a game/line & win something no matter the outcome - mind sharing a couple examples?

 

[goody2012]

I don't think I've seen any scenarios on Draft Kings where you could bet both sides of a game/line & win something no matter the outcome - mind sharing a couple examples?

Arbitrage is done when there are differing odds on two different sites. You will never find this scenario on the same site. They're not in the business of losing money.

 

[StormnClone58]

I don't think I've seen any scenarios on Draft Kings where you could bet both sides of a game/line & win something no matter the outcome - mind sharing a couple examples?

i have seen this once or twice with dk’s boosted promos.

Iirc, there was one when cbb started up, where you could get either kentucky or kansas boosted to +200. From there you take whomever had (-) odds and boost it as a single play to the +200, and then take the other, which was already (+ odds) as a single, and cover both ends. If i remember right it did have a max bet of $50, so you were either making like $40 or $50 in the end.

edit - photo added as evidence

 

[Tailg8er]

i have seen this once or twice with dk’s boosted promos.

Iirc, there was one when cbb started up, where you could get either kentucky or kansas boosted to +200. From there you take whomever had (-) odds and boost it as a single play to the +200, and then take the other, which was already (+ odds) as a single, and cover both ends. If i remember right it did have a max bet of $25, so you were either making like $18.75 or $25 in the end.

Yeah, now that you mention the boosts, I think this was possible with the McGregor fight last weekend. I, of course, wasn't smart enough to do that & lost $ on McGregor..

 

[StormnClone58]

Yeah, now that you mention the boosts, I think this was possible with the McGregor fight last weekend. I, of course, wasn't smart enough to do that & lost $ on McGregor..

yes, exactly!

 

[Clonehomer]

First of all, you're seeking tax advice on a sports message board, you'll get what you get lol

I'm not sure why you're focused on an "arbitrage" scenario. I feel I'm fairly active in sports betting and rarely if ever see a scenario like that.

Here's how I think about it, but I'll note that I'm a very small potatoes better so I don't exceed $600 in winnings. I also don't itemize so I don't track or deduct my losses.

You place a $1000 bet on Tampa Bay to win, at +100. Tampa Bay wins! Your net winnings are $1000. You have $2000 in your sportsbook account.
You bet $2000 on Iowa State to beat Kansas at +300. Dumb bet, ISU gets smoked. You have $0 in your sportsbook account.

2021 tax time. You'll get a 1099-MISC showing winnings of $1000. You'll owe income taxes on that $1000.
If you itemize your deductions, you could claim a loss of $1000 (you can deduct up to amount of winnings).

Not being a d!ck but this also isn't that hard to google...

Sports Betting Taxes Guide: How Do They Work? - The TurboTax Blog

Every year, I join a fantasy football league with my friends and every year, I lose. So for me, unfortunately, my limited sports gambling has no impact on my taxes. But if you frequently place bets on sporting events, and find yourself winning, it may have an impact on your taxes. With the US...

blog.turbotax.intuit.com

So will this will be an issue come tax time for a lot of people. With the Republican tax law and low mortgage rates, there are a lot more people taking the standard deduction rather than itemizing. So even though a person may not actually gain any money, if they don't itemize are they going to get hit with all those wins for taxes and then not to get to claim the losses?

 

[Rabbuk]

So will this will be an issue come tax time for a lot of people. With the Republican tax law and low mortgage rates, there are a lot more people taking the standard deduction rather than itemizing. So even though a person may not actually gain any money, if they don't itemize are they going to get hit with all those wins for taxes and then not to get to claim the losses?

I think this is correct.

 

[DSMCy]

So will this will be an issue come tax time for a lot of people. With the Republican tax law and low mortgage rates, there are a lot more people taking the standard deduction rather than itemizing. So even though a person may not actually gain any money, if they don't itemize are they going to get hit with all those wins for taxes and then not to get to claim the losses?

That's my very amateur understanding.

 

[Cyclonefan710]

So will this will be an issue come tax time for a lot of people. With the Republican tax law and low mortgage rates, there are a lot more people taking the standard deduction rather than itemizing. So even though a person may not actually gain any money, if they don't itemize are they going to get hit with all those wins for taxes and then not to get to claim the losses?

This is why I'm asking the question. I'm up $6k but if I have to itemize the losses I'm around a break even after taxes which blows. If you're gambling on the slots for example you're not taxed on each pull, you're taxed on the net result of that session. If I place two bets on the same game and bet type just on both sides it seems like that could maybe constitute as one session instead of two.