The Fantasy Sports Trade Association (FSTA) says fantasy sports is a $7 billion industry. The ongoing tax debate is whether fantasy sports should be classified as “gambling” or “hobby” because the rules between them differ.
Both gambling income and hobby income are taxable, but only “ordinary and necessary” expenses from gambling are deductible. Hobby losses may not be deducted under new restrictions put in place by the Tax Cuts and Jobs Act.
Learn more about the debate and interpretations of the tax law.