According to IRS requirements, DerbyGames must report all gambling winnings in the amount of $600 or more if such winnings are at least 300 times the amount of a single wager. Winnings of more than $5,000 from a wagering transaction are subject to federal income tax withholding and DerbyGames must withhold 25% of the payoff. These winnings are reported to the IRS electronically. There are no exceptions to these requirements.
In January of each year, DerbyGames account holders are mailed a paper copy of the W-2G statement to file with their taxes if they have wagers that qualified.