Tax Lottery Phenomenon Haunts 2026 World Cup Contestants

“Modern sport is as much a product of capitalism as factories, stock exchanges, and unemployment lines.” – Tony Collins.

In less than two months, 48 participants of the 2026 World Cup will enliven three North American countries, namely the United States, Mexico, and Canada. However, before discussing tactics and the lineup of players to be brought to the world stage, the contestants must already seek strategies to avoid the stifling tax regulations in the US.

The 2026 World Cup is like a tax lottery for the teams playing in the U.S. Canada and Mexico do exempt taxes for the 48 teams, players, and team officials, but a different situation applies in the U.S. Moreover, 78 out of a total of 104 matches will be held in the "Land of Uncle Sam," which has 11 host stadiums in 11 different cities.

This means that almost all countries will experience the significant tax cuts applicable in the US. Only two teams have the chance of not feeling this impact, namely Mexico and Canada, should their journey come to a halt in the preliminary round.

Unlike the 2022 World Cup when Qatar implemented a blanket tax exemption for all participants, players, and team officials, as well as federations that also benefited from participation bonuses from FIFA.

In fact, even before tax deductions, the players' earnings have decreased compared to their appearance in the 2022 edition. This is due to a reduction in daily allowances from FIFA. Players will only receive 650 US dollars or approximately 11 million IDR per day. This amount has decreased from 800 US dollars (13.62 million IDR) compared to four years ago.

From the players' earnings, it has become an initial indication that the pockets of the federation, players, and coaches will not be as full when they return from the United States as they were when they returned from Doha, Qatar. FIFA failed to lobby the U.S. Government for a tax exemption for participants of the 2026 World Cup.

This is because the tax deductions received by players and coaches are not limited to a single layer; they can even involve three layers of income tax deductions. The three tax deductions are from the country of origin, state tax in the US, and federal tax in the US.

Players and coaches must certainly comply with the income tax deductions from their respective countries, except for countries that exempt income tax, such as teams from the Middle East.

The sweat and hard work of players on the field, as well as the feelings of the coach in the tactical room, are also subject to taxation by the state and federal governments in the United States. These two tax deductions in the U.S. have varying amounts of deductions.

That is why the tax regulations that haunt the contestants of the 2026 World Cup are akin to a lottery game. The tax deductions imposed will vary depending on the origin of the national team. This depends on two factors: the location of the match (state tax) and whether the country of the national team has a Double Taxation Avoidance Agreement with the US government (federal tax).

More than 50 states in the U.S. have different income tax deduction rules. In Florida, where the city of Miami is located, there is no income tax, meaning it is set at 0 percent. This is the reason why David Beckham established the MLS team, Inter Miami, and was willing to recruit the best player, Lionel Messi.

Different income tax cuts apply, for example in California, which will host matches in Los Angeles (Inglewood) and San Francisco, imposing an income tax of 13.3 percent on every match income in their cities.

For New Jersey, which will host nine games including the final at MetLife Stadium, there is an income tax for individuals and business entities of 10.75 percent.

Under this rule, bonuses and endorsement fees received by players and coaches from matches in US cities will receive different tax deductions. In contrast, they will receive their bonuses and earnings intact if they compete in three Mexican cities or two Canadian cities.

Meanwhile, the federal government of the United States also imposes income tax on any earnings obtained within their territory. To avoid this, the United States has a Double Taxation Avoidance Agreement (DTAA) that was first introduced in the late 1980s.

A total of 60 countries have signed the DTAA with the United States, including Indonesia, which has been effectively implementing it since February 1, 1997. Of that number, only 18 World Cup participants have governments that have signed the DTAA with the U.S. government.

This situation means that players and coaches from 18 participating countries with DTAA will not receive a reduction in U.S. federal taxes. They will only be subject to income tax from their own countries.

The number of countries with the Double Taxation Avoidance Agreement (DTAA) consists of 17 countries that have signed directly (including Canada and Mexico), as well as Uzbekistan, which is included in the DTAA due to its continued enforcement of the tax agreement with the Soviet Union that has been in effect since 1976.

This does not apply to 29 other countries, such as the two leading nations, Argentina and Brazil. Lionel Scaloni, the coach of Argentina, and Carlo Ancelotti, who manages Brazil, will receive tax reductions in accordance with the regulations in Argentina or Brazil, as well as state and federal income taxes in the United States.

As a note, professional football players and coaches fall into the category of high-income taxpayers in the United States. They receive tax deductions of up to 37 percent.

Not only players and coaches, but football federations that do not have a DTAA will also receive a tax deduction on the bonuses granted by FIFA for their participation in the 2026 World Cup.

The football federation falls into the corporate category with a tax deduction rate of 21 percent. Meanwhile, the bonuses from FIFA for participation in the 2026 World Cup are classified as grant funds for development.

Apart from the two football superpowers from South America, the debut duo, such as Curaçao and Cape Verde, will also experience three tax deductions in the United States. Players and coaches are subject to state and federal taxes, while the federation must endure a corporate tax deduction of up to 21 percent.

As a result, a player and coach from a non-DTAA country may be subject to tax deductions according to U.S. regulations, which can reach up to 50 percent of their income. This does not include tax deductions from their respective countries.

"Smaller teams will receive massive tax breaks from the US. Money that could be better allocated to developing their football industries is instead staying in the US," Oriana Morrison, a sports tax consultant who advises Portugal's FPF and Brazil's CBF, told The Guardian.

Daida Hadzic and Rob Fagan from KPMG US, a financial firm, in a journal titled “FIFA 2026 World Cup Blows the Whistle on Complex Tax Risks” (March 2026), stated that each team and federation must involve tax and legal experts to identify potential tax withholding risks before the tournament begins on June 11.

"The contracts for players and staff must be reviewed and updated to clearly address tax and social security responsibilities, including determining who will bear any additional costs that may arise from those (tax) regulations. Players, coaches, and team staff need to be made aware of their obligations and the steps necessary for compliance (with tax regulations)," the report stated.

Hadzic and Fagan also highlighted FIFA's crucial role. Not only does it provide navigation through the complexities of taxation in the US, but "FIFA also needs to continue negotiating with the US government to obtain special regulations aimed at simplifying tax compliance and reducing the administrative burden on teams and federations," they continued.

On the other hand, FIFA has been tax-exempt in the United States since 1994 due to its classification as a non-profit organization. This means that all funds from sponsorships, broadcasting rights, and other commercial activities during the 2026 World Cup will go entirely into FIFA's coffers.

To borrow a sentence from the US sports historian Tony Collins, who opened this article in his book *Sport in a Capitalist Society: A Short History* (2013), the phenomenon of the tax lottery for the 2026 World Cup is evidence that football has embraced capitalism. This embrace is becoming increasingly close in the heart of global capitalism, the United States.

1. Mexico (Host)
2. Canada (Host)
3. English
4. Spanish
5. France
6. German
7. Dutch
8. Portugal
9. Belgium
10. Australia
11. South Korea
12. Japan
13. Türkiye
14. Egypt
15. Morocco
16. South Africa
17. Norway
18. Uzbekistan