Prediction Market Betting Hype and Self-Employment Taxes You Don’t Want to Miss
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What is the main topic discussed in this episode?
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Self-employment can be lucrative. It can also be expensive if you don't plan for taxes. This episode, learn about how to navigate self-employment taxes.
Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
And I'm Elizabeth Ayola. Later this episode, we'll be talking about navigating self-employment taxes. But first of all, we have our weekly money news roundup, where we break down the latest in the world of finance to help you be smarter with your money. Now, there are some huge athletic events coming up. All gather here if you're a sports fan. The Winter Olympics in Milan officially begins on Friday. The New England Patriots and the Seattle Seahawks are facing off at Super Bowl 60 on Sunday. And NCAA March Madness is just on the horizon.
So today we're talking about the rise of sports betting and what happens when betting apps stop feeling like a game. Our news colleague, Anna Hilhoski, is here to dig into it with us. Hey, Anna.
Hey, Elizabeth and Sean. Yeah, the Super Bowl, Olympics, March Madness. We've all seen that before. Betting on sports also isn't particularly new. But what's changed is how easy it is to bet instantly on your phone. in real time, while the game is happening. So, a January 26th report from Ipsos found that the share of Americans who have placed a bet on a live sporting event has doubled since 2022. It found that 17% of Americans surveyed had placed a legal sports bet up from 13% in 2024 and 8% in both 2022 and 2023.
So Ana, can you give us some background on this? Because it's all pretty new, this huge rise in sports betting, right?
Yeah.
Or at least legal sports betting, I should say.
Correct. So before 2018, legal sports betting was pretty much limited to Nevada. So you're in Reno, you're in Vegas, that's where you can bet. And it meant that the illegal sports betting market was thriving. Then in 2018, the Supreme Court ruled in Murphy v. NCAA that the states have the authority to decide what laws remain in force in their own states, which meant they could legalize, regulate, and tax sports betting. And that last one is really key. States saw legal betting as an opportunity to earn revenue. And today, sports betting is mainstream, and more than 30 states and D.C. will allow some form of legal sports betting. And that includes mobile apps and online wagering.
Wow, that's over half of the states that allow legal sports betting now. Yeah, it's everywhere. Ana, talk us through app-based betting, because betting is becoming so accessible. People can literally do it on their phones now using an app.
App-based force betting is dominated by companies like DraftKings, FanDuel, BetMGM, and Caesars Sportsbook. And these apps work by letting users place wagers before and during events. Now, the sportsbooks set odds that reflect probabilities and public betting, and then an algorithm adjusts those figures. But they've become so popular that at any point, these apps are handling millions of transactions at once.
Wow. This is a world I am so not a part of, and that's fascinating to me. What I also find really intriguing is just the variety of bets that you can make. It's not just simply which team is going to win, right? So Ana, talk us through the different types of bets that people might be able to make.
So there are a lot of different types of betting you can make at legal sportsbooks. And I do want to say a couple of caveats. So I don't have to repeat it every single time. If you win in any of these cases, you're going to get the amount that you bet in return along with your winnings. And then another one, betting lines and odds are always changing.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:01–5:39
2
How did the 2018 Supreme Court decision change sports betting?
5:39–11:46
3
What are the risks associated with app-based sports betting?
11:46–14:09
4
What types of bets can you place on sports betting apps?
14:09–26:45
5
How do taxes apply to sports betting earnings?
26:45–30:43
Speakers
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