IRS Chasing Down Illegal Gambling In the US

The Internal Revenue Service’s Criminal Investigation (CI) division is cracking down on illegal gambling, showing their commitment to fighting illicit activities. Over two years, from 2021 to 2023, the IRS launched over 100 investigations, resulting in the seizure of $178 million from illegal gambling operations. With a conviction rate of 96% for prosecuted cases, it is clear that engaging in illegal gambling will not go unnoticed by the IRS CI.

One notable case involved an illegal gambling enterprise in Chicago. Vincent Delgiudice, the mastermind behind the operation say the IRS, received an 18-month jail sentence for money laundering and operating an illegal gambling enterprise.

The investigation into Delgiudice’s operation revealed that he accepted wagers from about 1,000 gamblers across various sports. Driven by the prospect of big profits, Delgiudice went to great lengths to hide his gains. Allegedly, he laundered his profits internationally, using cashier’s checks and cash investments in multiple businesses.

The success of the IRS CI in curbing illegal gambling can be attributed to their partnerships with both public and private entities, as well as their use of data from various sources. These partnerships and data sources have played a crucial role in uncovering hidden gambling operations and preventing money laundering in sports betting.

Jim Lee, Chief of IRS Criminal Investigation, emphasized the importance of meeting tax obligations in sports betting. To ensure compliance, individuals engaged in gambling activities are advised to keep detailed records of all transactions, including bets placed, winnings received, and losses incurred. Taxpayers involved in sports betting must report their winnings on their annual tax returns using Form W-2G.

The collaboration between the IRS CI and law enforcement agencies goes beyond investigations. Currency transaction reports and suspicious activity reports have become valuable tools in detecting money laundering and tax evasion associated with illegal gambling. By using these reports, authorities can trace financial flows, discover concealed profits, and hold individuals involved accountable.

The penalties for those found guilty of illegal gambling are severe, serving as a strong deterrent for potential offenders. The average sentence for adjudicated cases currently stands at 23 months in prison, highlighting the seriousness of these offenses.

The efforts of the IRS CI have resulted in significant seizures and convictions, sending a clear warning to those tempted by easy money. Engaging in illegal gambling activities will not escape notice, and the consequences can be severe.

As the IRS continues to target illegal activity in sports betting, their impact becomes more evident. The collaborative approach between different agencies, reliance on public-private partnerships, and use of critical data sources have proven effective in the fight against illegal gambling.

The IRS CI says it remains determined to uphold the law, ensure tax compliance, and protect individuals from the dangers of illicit gambling. Through their vigilance and cooperation with law enforcement agencies, they are making strides in eradicating this widespread problem. The battle against illegal gambling persists, and the IRS is unwavering in their determination to succeed.