I want to make something perfectly clear here...we have reached out to several tax lawyers about this subject, some from the US and some from Canada. Although the overwhelming consensus from them is that we should be withholding 30% of the winnings and sending them to the IRS, all of them admit that this is new territory for them. They do not believe there is specific wording in any law directly addressing fantasy games; they are interpreting other laws relating to "winnings" and applying it to fantasy. If anyone knows a tax lawyer well versed in this area who is willing to cite Canadian or US tax law which actually mentions fantasy games I would LOVE to speak to them.
Please contact us here or at support@rtsports.com if you can help. Thanks.