Can I enforce a private gambling bet?
Q I made a bet with a friend on the World Series. I have 4-1 odds that the Dodgers will win. (If I’m right, he pays me $2,000; if wrong, I pay him $500.) We wrote it down and both initialed it. But can I legally require him to pay if the Dodgers win?
— R.C., Los Angeles
A I am among many fans who hope the Dodgers get to the World Series, and then win it for the first time in 29 years. As to your question: Although California is home to nearly 100 poker card rooms, more than 60 tribal casinos, a twice-weekly lottery and quite a few horse racing tracks, gambling is generally illegal here. And to enforce a contract such as you have described, the consideration must be legal. Your contract likely would be held unenforceable in court on the basis of public policy. Under California Penal Code Section 337a, your bet simply is not legal.
Q We have an office pool for the Super Bowl and similar things for a few other high-profile events, such as March Madness. Someone told me these activities are not legal. But since it’s just among us at the office, isn’t that OK?
— T.A., Hawthorne
A Under California Penal Code Section 337a, gambling can be treated as a felony or a misdemeanor. Penal Code Section 336.9, however, provides a more modest punishment for an office pool, namely an infraction with a maximum penalty of $250. Section 336.9 is applicable to people not acting for profit who offer the same stakes to each participant when the activity is not run online and no more than $2,500 is at stake. Odds of getting in any trouble if you comply with Section 336.9 are probably low.
Q I won $1,500 in a company betting pool. Is this something I will get taxed on?
— J.D., Torrance
A The IRS has the following statement online to the casual gambler: “Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but is not limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winning and the fair market value of prizes.”
Ron Sokol is a Manhattan Beach attorney with more than 30 years of experience. His column, which appears on Wednesdays, presents a summary of the law and should not be construed as legal advice. Email questions and comments to him at [email protected] or write to him at Ask the Lawyer, Daily Breeze, 21250 Hawthorne Blvd., Suite 170, Torrance, CA 90503.
