If you're running a fantasy contest and collecting entry fees through Venmo, PayPal, or other payment apps, you may be exposing yourself to unexpected tax complications — even if it's just a casual league among friends.
The 1099-K Problem
Changes to IRS reporting rules mean that payment platforms like Venmo and PayPal are required to issue a 1099-K when you receive payments above certain thresholds. Importantly, the 1099-K doesn't distinguish between money you collected as entry fees and your own personal income — the IRS sees the total amount and it's up to you to prove what's taxable and what isn't.
This creates real risk for anyone running paid contests outside of a licensed platform:
You may receive a 1099-K for the full amount of entry fees collected — even though most of that money was paid out to winners
Misreporting or failing to account for it can trigger audits, penalties, and tax complications
Running paid contests on entertainment-only platforms may also violate those platforms' Terms of Service
How Splash Sports Handles It
Splash Sports is a licensed fantasy platform built specifically for real-money contests. When you run your contests through Splash:
All entry fee collection and prize payouts are handled by Splash — you never personally collect or distribute funds
No 1099-K from Venmo or PayPal for contest-related transactions
If you earn $600 or more in net winnings, you'll receive a clear, accurate 1099-MISC based on your actual net earnings (winnings minus entry fees) — not the gross total
Full compliance with state gaming regulations
For Commissioners
As a commissioner on Splash, you earn 5% of the rake from contests you run. If your commissioner rewards reach $600 or more in a calendar year, you'll receive a 1099-MISC for that amount — clearly and accurately reported. No manual record-keeping needed.
Questions about how Splash handles taxes? See Splash Sports Tax Policies and 1099-MISC Form or email support@splashsports.com.
Splash Sports does not provide tax advice. Consult a qualified tax professional for guidance specific to your situation.