Fantasy Sports Is Not a Game of Skill
Fantasy sports generally involves the selection of team members, and then earning points when the selected team players compete in real world sports events – the players with the highest points win. Such games often require an entry fee, and pay cash or other prizes to the winners.
Code Section 165(d) denies a deduction for losses from “wagering transactions” except to the extent they can offset wagering winnings. The IRS Chief’s Counsel recently opined on whether the entry fee to play a fantasy sports event is a wagering transaction subject to this loss limitation.
The opinion concluded. . .