Full Breakdown
eBay Listings of Losing Lottery Tickets Highlight a Niche Tax-Deduction Strategy
8/15/2026, 8:55:00 PM
Core Event
Buyers on eBay are posting bundles of expired lottery tickets—sometimes described as “collectibles” or “vintage”—with titles that reference “tax write-offs.” Listings range from a pound of Pennsylvania scratch-offs for $10 to thousands of dollars’ worth of Florida tickets sold for $575. The items are marketed for “arts and crafts” or “collectible” purposes, but the presence of tax-deduction language suggests a different intent.
Tax Deduction Rules and Recent Changes
Under IRS Topic 419, gambling winnings are fully taxable, and losses can be deducted only by filers who itemize and retain detailed records. The deduction is limited to the amount of reported winnings. A 2025 amendment, the One Big Beautiful Bill Act, reduced the allowable loss deduction to 90 % of losses beginning with the 2026 tax year, leaving a “phantom income” of 10 % for break-even gamblers. This change narrows the benefit of purchasing losing tickets to document expenses.
Scale of Gambling and Potential Tax Gap
A 2024 Treasury Inspector General for Tax Administration (TIGTA) audit found nearly 149,000 individuals who won more than $15,000 between 2018 and 2020 failed to file returns, representing $13.2 billion in unreported winnings. TIGTA estimated the IRS could collect roughly $1.4 billion more annually by pursuing those cases. In 2023, Americans wagered about $166 billion on sports alone, a figure that excludes lottery, casino, and tribal betting. Prediction-market trading surged from under $5 billion in September 2025 to about $24 billion in April 2026, accounting for roughly 27 % of legal U.S. sports-betting volume during the summer World Cup.
Verbatim Quotes
- “This is a way to offset your taxes—clearly tax fraud,” — Jeffrey Hoopes
- “EBay just facilitates transactions between two people. They never take hold of the inventory,” — Jeffrey Hoopes
