Federal Wagering Excise Taxes

There are two: One applies to the amount wagered, the other applies to the persons accepting the wagers. Neither applies to traditional, legal bingo.

The good news for 501(c)(3)s is that these excise taxes also do not apply to amounts wagered in the conduct of charitable gaming as long as no part of the net proceeds will benefit private individuals or insiders.

Since income from the activities of 501(c)(3) organizations must not benefit private individuals or insiders, a properly operated 501(c)(3) would not be subject to the federal wagering excise taxes for any legal gaming activities it conducts.