Where tribes, tribal villages, municipal governments, and charitable organizations utilize a third-party operator to conduct a wagering pool, is there a liability for the wagering excise tax?

Lotteries conducted by tribes, tribal villages, municipalities, and charities are not state-run lotteries and, therefore, do not qualify for the exemption for the wagering and occupational taxes in Section 4402(3) of the Internal Revenue Code. The use of a third-party to operate the wagering pool does not alter this liability.

Return to List of FAQs