Getting paid to wager is all the rage these days. Just check out any online sportsbook or betting website and you will see lots of promos for people who want to make money online betting. There are tons of apps and sites that allow you to get paid for gambling, so it is highly likely that you have found a way to make some extra cash at least once in your life.
While it is great to be able to make a few extra bucks from home, there are legal ramifications that you need to be aware of when doing so. In particular, when you bet thru a bookmaker or any other third party, you are essentially gambling with cash that is not yours. Bookmakers are legally required to collect taxes and fees from your gambling transactions, so you need to make sure that you are aware of and comply with all bookmaker rules and regulations when betting.
The following are some of the biggest penalties that you will face if you are wrong about a bet or if you decide to bet when you shouldn’t have:
Loss of Income
If you are the type of person who regularly wagers large amounts of money, then you need to be aware that this is taxable income. You will be responsible for paying income tax on your winnings as well as a commission fee to the bookmaker. When you factor in the fees and taxes, you will end up with a sizable loss that you will have to deal with.
Even if you are doing this to make a few extra bucks, you should still know what is happening and be prepared to report your earnings. You will not be able to claim any deductions for your gambling losses because they are considered gambling losses. You will not be able to claim any expenses related to gambling on your income tax return either.
Inability To Claim Deductions
If you are claiming any sort of deductions on your taxes, you will not be able to claim them on your gambling income. You will not be able to claim any of the below expenses if you are going to be wagering regularly:
- Gym memberships
- Booking fees
- Meals
- Departure lounge charges
- Locker room fees
- Starter packages
- Traveling/staying expenses
- Clothes
- Parking
- Health club memberships
- Rental car fees
- Misc. entertainment expenses
So, no matter what type of deductions you are taking, you should not be claiming them on your gambling income.
Fines & Imprisonment
Depending on where you live and how much money you have lost, you can face heavy fines and up to five years in prison. If you lose more than $5,000 in one year, then you are considered a serious gambler and can expect to be charged with a felony. You can also be sentenced to up to 10 years in prison. The chances of you going to jail for gambling go up if you commit fraud or if you live in a state that does not allow online betting.
To avoid this, you should register with the state and follow the law. Charging you with a felony for gambling will land you in jail and possibly make your financial situation more difficult.
Bankruptcy
If you are going through financial difficulties and are unable to pay your gambling debts, then you should consult a lawyer. Bankruptcy will allow you to get a fresh start and clear your debt load. However, you need to be aware of the ramifications of filing for bankruptcy. When you do so, all of your debt will be canceled, but you will have to pay back all of the financial assistance that you received during the process. This could put you in a very bad financial situation and even make it impossible for you to continue paying for your weekly groceries.
After you file for bankruptcy, you will need to check in with your creditors on a regular basis to make sure that they do not contact the court to ask for further payments. If you fail to do so, then you could face additional bankruptcy fees and even be found in contempt of court. You should also have a legal and financial expert examine your debt load and financial situation before you file for bankruptcy. This will help you identify the best course of action and give you the best shot at avoiding this serious situation.
Ensure that you always play responsibly and know your limits. Never bet more money than you can afford to lose. Ensure that you always seek professional help if you are experiencing financial difficulties. Bankruptcy should be your last resort and you should try to avoid it if you can. There are a variety of legal and financial risks that you need to be aware of when betting online or in casinos, so ensure that you are protected and that you know exactly what you are doing.