Sports betting has become a national entertainment activity—March Madness is one of the most significant moments of the year for both casual and loyal bettors.
A recent national survey by DIY tax software provider TaxAct shows that 79% of Americans have already or plan to engage in sports betting, indicating that what was once a niche activity has now gone mainstream.
This survey of 750 American adults clearly depicts a picture: sports betting has become common, frequent, and is often motivated more by entertainment than income.
More than half (54%) of the respondents said they bet several times a year, another 30% bet weekly during specific sports seasons. 7% of loyal respondents said they bet whenever they have the chance, indicating that for some, sports betting is both a daily activity and a pastime.
While winning money is not the only attraction, 30% of respondents bet for excitement, 25% said betting makes watching sports more thrilling. Social driving factors are also strong: 17% of respondents enjoy the competitiveness, 12% engage in betting for social reasons. Only 16% of respondents said their primary goal was to earn additional income.
Despite the explosive growth of sports betting, awareness and understanding of its tax implications are low, with misconceptions widespread. Only 18% of respondents knew that all winnings must be reported to the IRS, and only 25% correctly identified sports betting winnings as taxable income.
Fewer respondents (10%) knew that losses could be itemized deductions, and 11% knew that the tax rate on gambling winnings could be as high as 37%. Only 2% of respondents could correctly identify all these statements.
