---
kind: "section"
citation: "26 U.S.C. § 4421"
title: "26"
title_heading: "Internal Revenue Code"
number: "4421"
heading: "Definitions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/4421"
units:
  - "Subtitle D — Miscellaneous Excise Taxes"
  - "Chapter 35 — Taxes on Wagering"
  - "Subchapter C — Miscellaneous Provisions"
---

# §4421. Definitions


For purposes of this chapter—

- (1) **Wager—** The term “wager” means—
  - (A) any [wager](#1) with respect to a sports event or a contest placed with a [person](/usc/26/4377.md?p=b-1-A) engaged in the business of accepting such [wagers](#1),
  - (B) any [wager](#1) placed in a wagering pool with respect to a sports event or a contest, if such pool is conducted for profit, and
  - (C) any [wager](#1) placed in a [lottery](#2) conducted for profit.
- (2) **Lottery—** The term “lottery” includes the numbers game, policy, and similar types of wagering. The term does not include—
  - (A) any game of a type in which usually
    - (i) the [wagers](#1) are placed,
    - (ii) the winners are determined, and
    - (iii) the distribution of prizes or other [property](/usc/26/4272.md?p=c) is made, in the presence of all [persons](/usc/26/4377.md?p=b-1-A) placing [wagers](#1) in such game, and
  - (B) any drawing conducted by an organization exempt from tax under sections [501](/usc/26/501.md) and [521](/usc/26/521.md), if no part of the net proceeds derived from such drawing inures to the benefit of any private shareholder or individual.

## Source credit

(Aug. 16, 1954, ch. 736, 68A Stat. 528.)