Daily fantasy sports must pay federal sports betting tax
Recently published guidance from the Internal Revenue Service states that daily fantasy sports are also subject to the tax.
US.- The Internal Revenue Service has clarified that daily fantasy sports are subject the federal sports betting tax, which exercises a levy of 0.25 per cent on every wager.
A memo from Holly Porter, associate chief counsel for the IRS, says this should be applied to daily fantasy sports at a rate of 0.25 per cent of entry fees.
DFSs had been thought to be exempt from the tax based on the grounds that they are a game of skill rather than chance, but the memo specifies that this is not relevant for tax purposes.
It has been estimated that DFSs generate around $4 billion in revenue annually, which would result in a $10 million federal tax receipt.
DraftKings is one of the leading companies in the DFS industry in the US.
