Title 26 — Internal Revenue CodeRelease 119-73not60

§4421 Definitions

Title 26 › Subtitle Subtitle D— Miscellaneous Excise Taxes › Chapter 35— TAXES ON WAGERING › Subchapter C— Miscellaneous Provisions › § 4421

Last updated Apr 5, 2026|Official source

Summary

Defines what counts as a "wager" and a "lottery" for this chapter. A "wager" means three kinds of bets: a bet on a sports event or contest placed with someone who runs a betting business; a bet in a for‑profit pool on a sports event or contest; and a bet in a for‑profit lottery. A "lottery" includes numbers games, policy, and similar wagering. It does not include games where bets are placed, winners are chosen, and prizes are paid all in front of the people who bet. It also does not include a drawing run by an organization exempt from tax under sections 501 and 521 if none of the net proceeds goes to any private shareholder or individual.

Full Legal Text

Title 26, §4421

Internal Revenue Code — Source: USLM XML via OLRC

For purposes of this chapter—

(1)The term “wager” means—

(A)any wager with respect to a sports event or a contest placed with a person engaged in the business of accepting such wagers,

(B)any wager placed in a wagering pool with respect to a sports event or a contest, if such pool is conducted for profit, and

(C)any wager placed in a lottery conducted for profit.

(2)The term “lottery” includes the numbers game, policy, and similar types of wagering. The term does not include—

(A)any game of a type in which usually

(i)the wagers are placed,

(ii)the winners are determined, and

(iii)the distribution of prizes or other property is made, in the presence of all persons placing wagers in such game, and

(B)any drawing conducted by an organization exempt from tax under section 501 and 521, if no part of the net proceeds derived from such drawing inures to the benefit of any private shareholder or individual.

Reference

Citations & Metadata

Citation

26 U.S.C. § 4421

Title 26 — Internal Revenue Code

Last Updated

Apr 5, 2026

Release point: 119-73not60