U.S. TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION, September 30 2024

 What TIGTA Found The IRS has not enforced income tax return filing requirements for recipients of millions of Forms W-2G, Certain Gambling Winnings, reporting billions of dollars in gambling winnings.  TIGTA reviewed all Forms W-2G issued to individual taxpayers during  Tax Years (TY) 2018 through 2020 (as of March 2023) and found 148,908 individuals who were issued Forms W-2G with a total amount of more than $15,000 per individual in gambling winnings and did not file a tax return.  These nonfilers were associated with approximately $13.2 billion in total gambling winnings.  Further TIGTA analysis determined that 139,045  of these nonfilers were included in the IRS’s nonfiler case creation process inventory.  In response to our audit work, the IRS analyzed 17,436 TY 2018 high-income nonfilers with total positive income greater than or equal to $100,000 and calculated that it could potentially increase tax revenue by approximately $1.4 billion through addressing the 139,045 individual nonfilers with gambling winnings.  In addition, hundreds of Forms W-2G do not include a Taxpayer Identification Number (TIN) required to trace the income to the recipient.  Finally, the IRS has few processes in place to identify potential excise tax noncompliance by entities accepting wagers, particularly in emerging areas such as online sports wagering. Rest is here

David Purdum, ESPN

The NFL and NBA see positives and negatives in a federal sports betting bill introduced in Congress last week that includes advertising restrictions and prohibitions on live wagering, according to sources familiar with the leagues’ positions.

The Supporting Affordability and Fairness with Every Bet Act — or SAFE Bet Act — would prohibit sportsbook advertising from 8 a.m. to 10 p.m. and during live sports broadcasts. It would also ban bets on individual college athletes and in-game wagers on professional or college sports, something the NCAA has been lobbying for in states.

The league sources expect a lengthy legislative process with many adjustments to the SAFE Bet Act. The proposed ban on sportsbook advertising raised eyebrows at the leagues, according to sources.

Sportsbooks spent an estimated $22.9 million on 66 minutes of national linear TV ads during live NFL games the past two weeks, according to iSpot.TV, a company that measures the brand and business impact of TV and streaming advertising. The sportsbooks’ ad spend ranked sixth among all industries, and the airtime ranked eighth. Both figures are down approximately 15% from the first two weeks of last season, according to iSpot.TV.

The elimination of live betting — an increasingly popular form of wagering that takes place during games — is also likely to be a sticking point for the NFL and NBA and sportsbooks, according to the sources.

An NFL source told ESPN that the league is appreciative of legislative interest, especially any provisions in the SAFE Bet Act designed to help protect the integrity of the league and help combat game manipulation.

“At the same time, though, we’re concerned that there might be some unintended consequences on some of these provisions,” the league source said. “They’re ripe for further discussion.”

Major League Baseball and the NHL did not respond to requests for comment from ESPN.

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Doug Greenberg, ESPN

South Alabama crushed Northwestern State 87-10 on Thursday night, with the Jaguars setting a school scoring record. The onslaught was so bad that the coaches of both teams agreed to shorten the fourth quarter by six minutes, resulting in only 54 minutes of play.

This ended up being key for the sports betting results. College football sportsbook house rules usually require 55 minutes of play for most action to be considered valid, though there is leeway for interpretation.

DraftKings’ house rules state, “There must be 5 minutes or less of scheduled game time left for bets to have action unless the specific market outcome is already unconditionally determined.” The last part is crucial, as over and under bets on the total (in this case set at 59.5, per ESPN BET odds) can be deemed “unconditional” — in other words, they would have hit regardless of anything that could have happened in the final minutes of the game.

As a result, DraftKings graded overs and unders as winners and losers, respectively. BetMGM confirmed that it settled total bets in the same manner. Caesars, ESPN BET and FanDuel did not immediately respond to inquiries for this story.

For the point spread (set at South Alabama -36.5), DraftKings graded all bets as void in accordance with its rules. However, the book said it is awarding cash payouts Friday for any wagers on USA’s full-game and second-half spreads as if they were winners. First-half and third-quarter wagers stand as is.

BetMGM voided all full-game wagers on Northwestern State, in accordance with house rules, but graded South Alabama bets as winners, calling the final score an “official result” as “declared by the official governing body,” per the book’s house rules.

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John Barr, ESPN

Two of the more vocal critics of the sports betting industry on Capitol Hill outlined legislation Thursday, which if passed into law would put into place sweeping new federal regulations on gambling companies, including requiring them to set limits on what amount sports bettors wager and how often they can place bets.

The Supporting Affordability and Fairness with Every Bet Act — or SAFE Bet Act — proposed by Senator Richard Blumenthal (D-CT) and Representative Paul Tonko (D-NY) would establish a nationwide ban on sports betting, requiring the 38 states where sports wagering has already been legalized to go through a new application process with the U.S. Justice Department. The U.S. Attorney General would then approve or reject applications, with approvals only lasting for a three-year period.

“State regulation is faint-hearted and half-baked. That’s why we need a national standard,” Blumenthal said. “Not to ban gambling but simply to take back control over an industry that is out of bounds.”

Tonko added: “We need to address addictions of all kinds. If not, we’re failing in our responsibilities.”

Lobbyists for the gambling industry were quick to point out Thursday that more than 5,000 state and tribal regulators have already come up with extensive industry controls.

“Introducing heavy-handed federal prohibitions is a slap in the face to state legislatures and gaming regulators who have dedicated countless time and resources to developing thoughtful frameworks unique to their jurisdictions,” said Chris Cylke, the American Gaming Association’s senior vice president of government relations.

The attempt to federalize laws that govern sports betting is focused on three areas: advertising, affordability and artificial intelligence.

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Associated Press, ESPN

DES MOINES, Iowa — Ten more Iowa and Iowa State athletes and an Iowa basketball equipment manager ensnared in a 2023 state gambling sting joined a civil lawsuit Tuesday seeking unspecified monetary damages from the state and its public safety and criminal investigation agencies for violating the athletes’ rights and smearing their reputations.

A federal judge granted a motion allowing the 11 new plaintiffs to intervene in the lawsuit, which was filed in April by Des Moines attorneys Van Plumb and Matthew Boles on behalf of 26 former or current Iowa and ISU athletes.

Texas-based attorneys Grant Gerleman and James Roberts and Iowa-based Chris Sandy represent the 11 who joined the lawsuit, bringing the number of plaintiffs to 37.

“Matt Boles and I are extremely excited to join forces with them as the old saying holds true — there is strength in numbers,” Plumb said.

Most of the athletes who faced criminal charges connected to the 2023 investigation agreed to plead guilty to underage gambling and pay a fine and in return had a count of identity theft dismissed.

But Iowa State football players Isaiah Lee, Jirehl Brock and Enyi Uwazurike, and wrestler Paniro Johnson did not accept plea deals and in March had all charges against them dropped because the Division of Criminal Investigation was found to have misused tracking software that detected open mobile betting apps on cellphones in ISU athletic facilities.

The civil suit alleges improper conduct by investigators violated the athletes’ Fourth and 14th amendment rights and caused them pain, suffering, mental anguish, humiliation and damage to their personal reputations.

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David Purdum, ESPN

Auburn senior quarterback Payton Thorne on Tuesday said criticism after losses, such as Saturday’s defeat to California, has included requests for money from bettors.

Thorne, appearing on “The Next Round,” said bettors have messaged him on Venmo, asking for money.

“They’re definitely not sending cash,” Thorne, who had four passes intercepted in the 21-14 loss to Cal on Saturday, said with a chuckle. “It’s funny. When they lose money, they want their money back. But when they win money on a parlay, no one’s ever sent me any of the money.”

Thorne made light of the requests for money during his appearance, but the issue is something that the NCAA is monitoring and trying to combat.

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D’Arcy Maine, ESPN

NEW YORK — Caroline Garcia, a US Open semifinalist in 2022, on Wednesday shared some of the derogatory online messages she has received following recent losses and pointed to “unhealthy betting” as one of the reasons players are targeted on social media.

Other players echoed Garcia’s lament, including defending champion Coco Gauff, who said: “You could be having a good day, and then somebody will literally tell you, ‘Oh, go kill yourself.’ You’re, like, ‘OK, thanks.'”

Garcia, a 30-year-old from France who has been ranked as high as No. 4, was seeded 28th at Flushing Meadows but was eliminated by Renata Zarazúa 6-1, 6-4 in the first round Tuesday. Zarazúa is ranked 92nd and is making her US Open debut.

Garcia, in a lengthy post on X, wrote about the “hundreds” of such messages directed her way and offered examples of “just a few,” including one telling her she should consider suicide and another that read, “I hope your mom dies soon.”

“And now, being 30 years old, although they still hurt, because at the end of the day, I’m just a normal girl working really hard and trying my best, I have tools and have done work to protect myself from this hate. But still, this is not OK,” Garcia wrote. “It really worries me when I think about younger players coming up, that have to go through this. People that still haven’t yet developed fully as a human and that really might be affected by this hate.”

In her post, Garcia also raised the issue of the sport and tournaments partnering with betting companies and speculated on whether that has contributed to a rise in such behavior.

“Tournaments and the sport keeps partnering with betting companies, which keep attracting new people to unhealthy betting,” Garcia noted. “The days of cigarette brands sponsoring sports are long gone. Yet, here we are promoting betting companies, which actively destroy the life of some people.”

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America Gaming

WASHINGTON, D.C. – Americans are increasingly embracing casino gaming and sports betting as acceptable forms of entertainment and responsible industries, according to new consumer survey results from the American Gaming Association (AGA). The new data comes ahead of Responsible Gaming Education Month this September and on the eve of the seventh NFL season with widespread legal wagering.

Among new high-water marks in consumer sentiment, 75% of Americans believe the gaming industry behaves responsibly in the communities where it operates, 9 in 10 Americans view sports betting as an acceptable form of entertainment, and 75% of Americans support legal sports betting in their home state.

“These latest survey results highlight a consistent trend over the years: as gaming expands to new audiences, Americans increasingly see the benefits of a legal, regulated gaming marketplace that contributes to communities, prioritizes responsibility and provides unmatched entertainment,” said Joe Maloney, AGA Senior Vice President, Strategic Communications.

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David Purdum, ESPN

After a rash of suspensions in 2023, the NFL has not handed out any punishments for violations of its gambling policy in more than a year, but in a landscape with widespread betting, protecting the integrity of the games remains a priority for the league.

The NFL is spotlighting its approach to combat betting-related threats ahead of the 2024 season and, for the first time, is sharing details about its team of investigators, who are on site on game days monitoring for “suspicious activity.”

Cathy Lanier, senior vice president of NFL security, told ESPN that an integrity representative is assigned to each team, a practice that began in 2018, shortly after regulated betting began spreading across the United States. The integrity representatives, who include retired FBI agents or executive-level police officers, according to the league, roam stadiums from the sidelines to the press box during games.

Lanier declined to provide specific examples of what constitutes suspicious activity but said the league’s integrity representatives are monitoring for “fair competition issues.”

“They’re looking for anything that is an anomaly, anything that stands out, anything that might raise concerns,” Lanier, a former chief of police in Washington, D.C, told ESPN.

The NFL suspended 10 players for gambling violations during a three-month span in the spring and summer of 2023. The league said it found no signs of game manipulation in any of the instances, but five players were found to have bet on the NFL, including on games involving their own team in some cases.

According to the league, every player contract has included a standard “Integrity of the Game” clause for at least the past 20 years, and the NFL gambling policy requires all personnel to “always give their best effort.” Anyone found guilty of attempted or actual game-fixing faces a permanent ban from the league.

Lanier’s team monitors betting markets before and during games, looking for dramatic odds movement, including on point spreads and player props such as the over/under on a quarterback’s passing yards. Significant shifts in the odds are relayed to the on-site integrity representatives as a warning for potential game manipulation. The integrity representatives also act as liaisons with state gaming regulators and assist in investigations regarding potential gambling policy violations.

The NFL analyzes notable odds movements and, with partners Genius Sports and U.S. Integrity, tries to determine the cause. A change in the weather forecast, an injury report or even speculation from pundits on TV or bettors on social media can make the line move. Both Genius Sports and U.S. Integrity watch over betting markets and flag unusual activity at sportsbooks.

“If the sportsbooks are moving the lines, and they’re moving pretty dramatically, is that because of any injury that’s been reported, or is there something else that’s going on that’s going to make us suspicious?” Lanier said.

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David Purdum, ESPN

NEW YORK — Caroline Garcia, a US Open semifinalist in 2022, on Wednesday shared some of the derogatory online messages she has received following recent losses and pointed to “unhealthy betting” as one of the reasons players are targeted on social media.

Other players echoed Garcia’s lament, including defending champion Coco Gauff, who said: “You could be having a good day, and then somebody will literally tell you, ‘Oh, go kill yourself.’ You’re, like, ‘OK, thanks.'”

Garcia, a 30-year-old from France who has been ranked as high as No. 4, was seeded 28th at Flushing Meadows but was eliminated by Renata Zarazúa 6-1, 6-4 in the first round Tuesday. Zarazúa is ranked 92nd and is making her US Open debut.

Garcia, in a lengthy post on X, wrote about the “hundreds” of such messages directed her way and offered examples of “just a few,” including one telling her she should consider suicide and another that read, “I hope your mom dies soon.”

“And now, being 30 years old, although they still hurt, because at the end of the day, I’m just a normal girl working really hard and trying my best, I have tools and have done work to protect myself from this hate. But still, this is not OK,” Garcia wrote. “It really worries me when I think about younger players coming up, that have to go through this. People that still haven’t yet developed fully as a human and that really might be affected by this hate.”

Pat Forde, Sports Illustrated

Notre Dame is suspending its men’s swimming program for a minimum of one academic year after internal and external investigations revealed a widespread gambling issue that violated NCAA rules, and what athletic director Pete Bevacqua termed in a statement, “a deeply embedded team culture dismissive of Notre Dame’s standards for student-athletes.”

The team was informed of the stunning suspension Thursday afternoon, sources tell Sports Illustrated. The timing will enable athletes wishing to transfer—including incoming freshmen—to do so before classes begin at the school Aug. 27. The women’s team and both diving teams are unaffected by the disciplinary action. Head coach Chris Lindauer and his staff were not disciplined, after reviews found that “the staff was not aware of gambling or the scope and extent of other troubling behaviors because team members effectively concealed such behaviors from the coaches and staff through concerted efforts.”

The Notre Dame men’s team effectively created its own sports book for the purpose of wagering on their swimming performances, sources say. A majority of the returning 2024–25 team is believed to have placed bets. “Over/under” lines were established for a swimmer’s times in certain races, with wagers being placed on the outcomes. There are no known gambling companies that take wagers or produce betting lines on college swimming.

In the face of widespread campus gambling issues, the NCAA has modified some of its penalties. But the sanctions are most severe for athletes who gamble on their own sport and own team. According to updated NCAA legislation from June 2023, “student-athletes who engage in activities to influence the outcomes of their own games or knowingly provide information to individuals involved in sports betting activities will potentially face permanent loss of collegiate eligibility in all sports. This would also apply to student-athletes who wager on their own games or on other sports at their own schools.”

Eligibility issues for the Notre Dame swimmers who placed those kinds of wagers would follow them to other schools, should they decide to transfer. Some Fighting Irish swimmers also placed wagers on other sports and involving other schools, sources said, such as the NCAA basketball tournaments. Those wagers would produce lesser sanctions than the internal team gambling. 

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