Can a gambling influencer deduct betting losses as business expenses on taxes?

This is actually a really interesting gray area in tax law. While I'm not giving you official tax advice, I can tell you how the IRS generally views this situation. The IRS makes a clear distinction between gambling activities and business activities. Even though you're running a business based around gambling advice, your actual wagering activity is still considered personal gambling - not a business expense. When you place a bet, you're essentially purchasing a chance to win money - this is gambling activity that falls under personal itemized deductions (limited to your winnings) rather than business expenses that go on Schedule C. What you CAN deduct as legitimate business expenses would be things like: subscription costs for research tools, website hosting, content creation software, part of your internet if used for business, marketing expenses, etc. But the actual dollars you wager, even if they're for "research" purposes, would still generally be treated as personal gambling losses.

Hi there! I ran into a similar situation with my fantasy sports advice business and spent hours trying to untangle the tax mess. Eventually I discovered taxr.ai (https://taxr.ai) which helped me sort through this exact gray area between gambling and business expenses. I uploaded my 1099s from betting platforms plus my business banking statements, and it helped identify which expenses were actually deductible business costs versus what needed to be treated as gambling losses. It also gave me specific documentation to support my position in case of an audit. The system flagged certain bets as "content creation costs" versus personal gambling, which was exactly what I needed. The peace of mind knowing I wasn't accidentally committing tax fraud was worth it alone!

I was super skeptical about taxr.ai at first, but after my accountant completely messed up how to handle my sports prediction YouTube channel, I gave it a shot. The platform actually identified a legitimate way to categorize some of my betting activity as "product development costs" based on how I was using the bets to create specific types of content. The documentation they provided helped me correctly separate my personal gambling (which is still subject to the normal limitations) from the bets I was placing specifically to demonstrate strategies to my audience. My CPA was impressed with the detailed analysis and tax code references. Saved me about $4,300 in taxes last year by properly categorizing what was truly a business expense versus personal gambling.

If you've been stuck in IRS limbo trying to get answers about this type of situation, I highly recommend Claimyr (https://claimyr.com). I spent weeks trying to get through to someone at the IRS about my gambling/business situation and always got disconnected. Claimyr got me connected to an actual IRS agent in about 20 minutes when I had been trying for days. They have this callback service where they navigate all the phone trees and wait times, then call you once they have an agent on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that while my actual betting couldn't be deducted as a business expense, there were other aspects of my gambling research that could potentially qualify as ordinary and necessary business expenses. Without getting that clarification directly from the IRS, I would have been guessing.

I have to admit I was completely wrong about Claimyr. After my snarky comment, I actually tried the service myself out of curiosity when I needed help with my gambling business tax questions. They got me through to an IRS agent in 35 minutes (when I had been trying for literally weeks on my own). The agent clarified that while I couldn't deduct the actual wagers as business expenses, I could document and deduct research time, analysis software, and other costs associated with developing my betting strategy content. This specific guidance saved me from making a serious error on my return. The IRS agent even noted that many people in my situation incorrectly try to deduct the actual bets instead of focusing on the legitimate business aspects surrounding them.

Another approach to consider is separating your activity into two distinct categories for tax purposes: 1. Your actual gambling activity (reported on Schedule A with losses only deductible up to winnings) 2. Your content creation business (reported on Schedule C) Make sure your business has all the elements that the IRS looks for in a legitimate business: - Separate business bank accounts - Good record keeping of all expenses - Profit motive (showing you're trying to make profit from content, not gambling) - Regular and continuous activity - Professional operation Just be super clear about the distinction - your business sells information and entertainment, not gambling services. The gambling happens to be the subject matter, but the wagers themselves aren't business expenses.

You might want to look at Revenue Procedure 2010-16 which talks about professional gamblers. If you can prove gambling is your actual trade or business (very difficult bar to clear), you might be able to deduct gambling losses beyond just your winnings. But very few people qualify as "professional gamblers" in the IRS's eyes. Your situation is even more complex because you're not claiming to be a professional gambler - you're running a content business about gambling. Two different things.

I've been following this discussion with interest as someone who works in tax compliance. A few key points to consider: The IRS has been fairly consistent in their position that gambling losses, even for content creators, remain subject to the traditional limitations under Section 165(d). The critical test is whether the primary purpose of the activity is profit from gambling itself versus profit from creating content about gambling. However, there are some legitimate business deductions you might be overlooking: - Equipment costs (cameras, editing software, etc.) - A portion of your home office if used exclusively for content creation - Internet and phone costs related to your business - Professional development (courses on content marketing, etc.) - Banking fees for your business accounts The tricky part is documenting that your betting activity serves a legitimate business purpose beyond just the potential to win money. If you can show that you're placing specific bets solely to demonstrate strategies or create educational content (and you document this thoroughly), you might have a stronger case for some deductions. I'd strongly recommend consulting with a tax professional who has experience with content creators and gambling-related businesses. The penalties for misclassifying gambling losses as business expenses can be significant.

This is a fascinating case that highlights how the tax code hasn't fully caught up with modern content creation business models. While I understand the frustration with the traditional gambling loss limitations, there might be a middle-ground approach worth exploring. Consider documenting a clear separation between "demonstration bets" and any personal gambling. For the bets you place specifically for subscriber content, you could: 1. Use a dedicated business account/card for these transactions 2. Create content BEFORE placing the bet (showing your analysis process) 3. Never cash out winnings from these demonstration bets - instead, use them for additional content 4. Maintain detailed records showing the direct connection between specific bets and specific content pieces While the actual wagered amounts would still likely be treated as gambling activity, this approach could strengthen your position for other related expenses like research time, analysis tools, and the business costs of maintaining separate accounts for content creation. The key is showing the IRS that these aren't just bets you're placing anyway and then creating content about - they're bets placed solely as part of your content creation process with no personal profit motive from the gambling itself. I'd also suggest reaching out to other gambling content creators to see how they've handled this. There might be some informal best practices emerging in your industry that could provide guidance.