Taxes on poker winnings

Look, my bad if this is repetitive. I checked the other threads, but nobody seems to have actually answered what I'm asking.

So, how does the IRS look at winnings from online poker sites? Does it matter if I'm just playing tournaments where the top prize is roughly $3.25? Also, is there a big difference in how they tax you if you're just a hobbyist versus someone playing professionally? Thanks for the help.

Larry Ramirez3

If I were you, I’d probably head over to the Legal subforum first. I have some doubts about whether that kind of profit is actually legal here in the States... Honestly, it feels like our government is still stuck in the Stone Age when it comes to this stuff 😢

I actually started this thread over in the Legal subforum, but the mods moved it here. As far as the legal side goes, I’ve dug through a few statutes regarding gambling and its regulation, and honestly, the only thing that seems to hit players directly is Article 68 of the gambling laws: "(1) It is prohibited... 2. participating in foreign gambling if the stakes are being placed within the Republic of America." Here’s my take: I’m paying for this tournament using funds from my poker site account, and I’m topping up that account via PayPal. Since neither of those accounts is physically located in America, I don't see how anyone could claim I'm breaking any rules.

And you’re probably using a foreign currency account in the US or just a credit card to fund your PayPal...
I’m no expert, but watch out, it might be a slippery slope. I actually heard about a case where the IRS froze everything a woman had earned from DraftKings when she tried to withdraw it to her bank account.

Not really. I built up my bankroll grinding freerolls, but if I actually hit a score, I’d be cashing out to a bank account in the States.

Larry Ramirez3 said:Not really. I built up my bankroll grinding freerolls, but if I actually hit a score, I’d be cashing out to a bank account in the States.

I’m just telling you to be careful. I usually move my winnings over to PayPal, then funnel them through DraftKings (you have to wager 10%, so I just bet it at 1.0 odds) and then withdraw it to my checking account.
Let them try to track it if they're so eager. ☕

...so in that case, if it's coming from a freeroll, maybe things stay chill—assuming they haven't deposited anything from America or anywhere else, I guess?

Paul Garcia10 said:And you’re probably using a foreign currency account in the US or just a credit card to fund your PayPal...
I’m no expert, but watch out, it might be a slippery slope. I actually heard about a case where the IRS froze everything a woman had earned from DraftKings when she tried to withdraw it to her bank account.

...yeah, and I actually dug a bit deeper on some forums—apparently, she was using her debit card for everything and then tried to pull about 100 $0.00 back through that same card, so there was no PayPal or Venmo involved at all...

well, now we know....☕