As a financial writer I'm here to tell you: First, you'd pay taxes on it.
"Every CPA will tell you that you should report income from any source," says Ray Kondler, a certified public accountant at Kondler & Associates in Las Vegas. "If you win $100 in your office pool, in theory, you should report that."
That goes for winnings from casinos and legal sportsbooks as well as payouts from unofficial pools like the one that I'm no longer in.
If you take down a modest score, say, a couple hundred bucks, it's up to you to report your winnings to the IRS — neither a casino nor Bob from accounts payable will do it for you.
If you're a big winner at a casino (generally if your winnings are at least $600 and at least 300 times the amount of your bet) you'll receive an IRS Form W-2G. The winner of my pool won't receive any such documentation, but they'd be wise to follow the law, says Kondler.
"They can take the $40,000 and put it in their bank account," he says. But, "if they get audited they're going to have a tough time explaining what that is."
As for us losers, there's one silver lining: The IRS allows gamblers to deduct their losses — with a few important caveats. If you're not a professional gambler (for whom losses are considered business expenses) you'll have to itemize to claim the deduction. And you can only deduct losses to the extent that they offset your winnings. As if I or the other degenerates have any of those.
