Legal sports betting is coming to multiple states. Read on to learn about legalized sports betting, types of bets, and taxes on winnings. You can also find out about in-play betting. However, if you are in a state where sports betting is already legal, you need to understand what it means to you. Listed below are some of the major points to keep in mind. They may sound simple, but they can have profound effects.
Legalization of sports betting in multiple states
In 2018, the NCAA and MLB began lobbying for the legalization of sports betting in several states. When federal law changes, these sports leagues begin lobbying for sports betting to be legalized. New Jersey, which had previously prohibited sports betting, legalizes the activity at its casinos and racetracks. In November 2020, a voter referendum in Tennessee legalizes online sports betting. In November of the same year, Pennsylvania legalizes online sports betting, which takes place in the state’s casino market.
The next step in the legalization process is to find a solution for the regulatory issues. A gross gaming revenue tax can be appropriate in place of a corporate income tax, but in many states, a gross gaming revenue tax is needed. A gross gaming revenue tax was created in Colorado to address this issue. The state’s legislative proponents overpromised and passed legislation earmarking the revenue from the tax to fund the state’s Colorado Water Plan. Meanwhile, Nebraska approved a gaming compact with the Seminole Tribe, but the legalization process didn’t begin until May of 2023.
Types of bets
There are several types of bets in sports betting, and each has its own advantages and disadvantages. Typically, you’ll place a bet on a team that is favored, such as a favorite in an NBA game or a favorite in a MLB game. A prop bet, on the other hand, is made on something other than the team’s actual score. Prop bets offer the widest variety of possibilities and can include some of the wildest bets. Another popular type of bet is the period bet, which is the same as a regular wager, but only covers a specific time frame in a game.
When most people hear the term “sports betting,” they think of straight bets. These involve choosing the winner of a match. This can also include team-versus-team games, as the latter require a wager on both the team and the competitor. Some sports betting categories offer additional options, such as futures, which are available only during offseason seasons. While this option may not be for every bettor, it does offer more flexibility and more opportunities to win.
Taxes on winnings
If you make a lot of money from sports betting, you may be wondering if you should pay taxes on your winnings. The federal government requires you to report any winnings you make to the IRS. The amount of tax you have to pay depends on your annual income. If you’ve won over $600, you’ll need to submit a 1099-MISC form. Otherwise, you won’t have to pay any taxes on your sports betting winnings.
You should know that sportsbooks must withhold 24% of your winnings. A substantial payout, for example, is over $5,000 or a 300x wager. You can write off the entire amount or you can itemize it. If you’re a typical sports bettor, however, you should take the standard deduction instead of itemizing. The Tax Cuts and Jobs Act of 2017 increased the standard deduction to $12,000 for single filers and $24,000 for joint filers.
Unlike pregame betting, in-play betting involves placing bets on the outcome of a sporting event in real time. While wagers placed prior to the start of the game are almost always accepted at the listed line, the lines for in-play betting can change quickly. In fact, they may already be gone by the time you place your bet! However, some sportsbooks offer the option of placing the same bet on a different line, while others reject the same bet if the new line is already in play.
The Gambling Commission’s report on in-play betting suggested that there is a greater risk of harm for those who engage in this form of gambling. In-play gambling has the potential to encourage an individual to place more bets on a single event and has been linked to an increased risk of gambling problems. Hing et al. (2016) concluded that a higher proportion of in-play sports betting is associated with an increased risk of gambling problems.