Kate Lowenhar-Fisher Quoted by Boston Business Journal Regarding IRS Memo on Daily Fantasy Sport Entry Fee Taxes

Kate C. Lowenhar-Fisher (Member and Gaming & Hospitality Practice Group Chair, Las Vegas) spoke with Boston Business Journal for an article titled “IRS Memo Could Be ‘Earth-Shattering’ for Sports Fantasy Sites, Says Vegas Attorney.” Though entry fees paid upfront by daily fantasy sports users have not traditionally been considered bets, the IRS memo, which is not legally binding, says they should. Currently, legal wagers are subject to a 0.25% excise tax on the amount of the handle, but illegal wagers are subject to a much larger 2% excise tax on handle. In states like Texas and Florida which consider daily fantasy sports to be illegal gambling, that “…2% tax on handle could equate to a 20% tax on revenue,” Kate said. “That's how staggering it is. At least in certain jurisdictions, what they have been doing is unauthorized wagering, and hence that 2% rate would likely apply." To read more, click here (subscription required).