Article by Pete Lowy and Alissa Gipson on "Fantasy Sports Cos. Should Plan Tax Defense After IRS Memo"
In an article published on August 27, 2020, Chamberlain Hrdlicka attorneys Peter Lowy and Alissa Gipson discuss an Internal Revenue Service internal memorandum known as a General Legal Advice Memorandum (GLAM) addressing the application of the Section 4401 gambling excise taxes to fantasy sports.
Fantasy sports have sky-rocketed in popularity over the past decade. The article explains that about 60 million people (close to half the number of people that voted in the last presidential election) “participate” in fantasy sports leagues, mostly football. Believe it or not, close to 8 million people play fantasy golf! According to the GLAM, there are circumstances under which the fees that fantasy sports participants pay constitute “wagers,” and thus entitle the Taxman to a 0.25% or 2% rake depending on the circumstances.
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