Famous Fridays: Pete Rose, Gambling Winnings Are Income Too

Pete RosePete Rose has faced his fair share of criticism for his gambling problems.  He was banned from Major League Baseball for betting on games while he was a manager.  He also underreported income from gambling, personal appearances, autograph signings, and memorabilia sales between 1984-1987.

During his playing career, Rose earned the nickname “Charlie Hustle” for his fierce competitiveness. He finished his major league career as the all-time hits leader with 4,256.  Rose also won three World Series, including two as a member of the Big Red Machine, three batting titles, one MVP, and made 17 All-Star appearances.  He managed the Cincinnati Reds from 1984 until 1989, when the 225-page Dowd Report was released to MLB Commissioner Bart Giamatti.

The infamous Dowd Report contained banking records, betting records, and witness testimony indicating that Rose bet on baseball while managing the Reds.  Rose originally denied the allegations, but agreed to a ban from Major League Baseball in 1989.  Rose is still banned from Major League Baseball and has admitted on betting on games he managed.

Shortly after his ban from baseball, Rose was charged with failure to report over $350,000 in income from memorabilia sales, autograph signings, personal appearances, and gambling winnings from 1984 through 1987.  In 1990, Rose pled guilty to two felony charges of filing false tax returns. As part of the plea agreement, prosecutors agreed not to charge Rose with the more serious crime of tax evasion.  He was sentenced to five months in prison and fined $50,000.

Rose continues to make money with appearances and memorabilia sales, presumably reporting all of it as income on his tax returns.