Yes, you must report betting winnings as income to the IRS
Betting winnings are taxable income in the United States, whether you won at a casino, racetrack, sportsbook, or online platform. The IRS treats all gambling winnings the same way: as ordinary income that must be reported on your tax return. This applies even if you won a small amount or won through casual betting with friends.
The tax obligation exists regardless of whether the sportsbook, casino, or betting platform sends you a tax form. You are responsible for reporting the winnings yourself if no form arrives. Many people assume that small wins don't need to be reported, but the IRS has no minimum threshold—any amount counts as taxable income.
Key Takeaways
- All gambling winnings must be reported as income on your federal tax return, with no minimum amount threshold.
- Casinos and sportsbooks issue Form W-2G when winnings reach certain amounts, but you must report all winnings even without a form.
- You can deduct gambling losses, but only up to the amount of your winnings, and only if you itemize deductions.
- State and local taxes on gambling winnings vary by location, and some states tax winnings at higher rates than federal income tax.
- Winnings from online betting platforms and apps are subject to the same federal tax rules as in-person gambling.
When casinos and sportsbooks send you a tax form
Sportsbooks and casinos are required to issue a Form W-2G when your winnings reach certain thresholds. For most types of gambling, this threshold is $1,200. For slot machines and bingo, the threshold is also $1,200. For keno, it is $1,500. For horse racing, the threshold is $2,500.
When a Form W-2G is issued, the sportsbook or casino sends a copy to you and files a copy with the IRS. This means the IRS already knows about that win before you file your return. You must report the amount shown on the W-2G on your tax return, even if you disagree with the amount or had losses that offset the win.
If your winnings fall below these thresholds, the sportsbook or casino will not issue a W-2G. However, you are still required to report the winnings on your return. The fact that no form was issued does not mean the winnings are not taxable.
Reporting winnings that fall below the W-2G threshold
Winnings under $1,200 (or the applicable threshold for your type of gambling) must still be reported on your tax return, but you report them yourself without receiving a form from the sportsbook or casino. You would list these winnings as "other income" on your federal return.
Online betting platforms, including sportsbooks and poker sites, may or may not issue W-2G forms depending on the amount won and the platform's policies. Some platforms issue forms at lower thresholds than the IRS requires. Check your account statements and any year-end tax documents the platform sends you.
Keeping your own records of all bets, wins, and losses is essential. Save receipts, account statements, and any documentation from the betting platform. If the IRS questions your return, you will need to show proof of the winnings you reported.
How to deduct gambling losses
You can deduct gambling losses, but the rules are strict. First, you can only deduct losses up to the amount of your winnings—you cannot claim a net loss to reduce your other income. Second, you can only claim the deduction if you itemize deductions on your tax return rather than taking the standard deduction.
To itemize, your total deductions (gambling losses plus mortgage interest, charitable donations, state taxes, and other may be able to access expenses) must exceed the standard deduction for your filing status. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly. Most taxpayers find that itemizing does not benefit them.
You must keep detailed records of every gambling loss you want to deduct: the date, location, type of bet, and amount lost. A diary or spreadsheet works, but receipts and account statements are stronger proof. The IRS can deny your entire loss deduction if your records are incomplete.
State and local taxes on gambling winnings
Many states tax gambling winnings in addition to federal income tax. State tax rates vary widely. Some states have no state income tax at all, while others tax gambling winnings at rates higher than ordinary income. Nevada, for example, has no state income tax, so you owe only federal tax on winnings there. New York taxes gambling winnings as ordinary income at rates up to 10.9 percent.
Some states impose a separate gambling tax on the sportsbook or casino rather than on the bettor. In those cases, the tax may already be withheld from your winnings before you receive them. Check your state's tax authority website or the tax documents sent by the sportsbook to understand what you owe.
If you won money while traveling or betting online from a different state, you may owe taxes to multiple states. The rules depend on where the bet was placed and where you live. This is especially complex for online betting, where the sportsbook may be located in one state and you in another.
Tax withholding on large wins
When a casino or sportsbook issues a Form W-2G, they may also withhold federal income tax from your winnings before paying you. The withholding rate is typically 24 percent for most gambling winnings, though it can be higher if your total income is very high. Some states also require withholding of state income tax.
Withholding is not the same as paying your full tax bill. If your actual tax rate is higher than 24 percent, you will owe more when you file your return. If your actual rate is lower, you may receive a refund. The amount withheld is credited against your total tax bill for the year.
You can request that the sportsbook or casino not withhold tax, but this is rarely granted. If you do not have tax withheld and owe a large amount when you file, you may face penalties and interest charges.
Reporting winnings from online betting and apps
Online sportsbooks, betting apps, and poker sites are subject to the same tax reporting rules as physical casinos. If your winnings reach the W-2G threshold, the platform should issue a Form W-2G. However, not all online platforms comply with this requirement, especially if they operate from outside the United States or in states where online betting is not regulated.
If you use an unregulated or offshore betting platform, you are still responsible for reporting your winnings to the IRS. The fact that the platform did not send you a tax form does not relieve you of the obligation. The IRS has been increasing enforcement against unreported gambling income from online sources.
Keep screenshots or downloads of your account history showing all transactions. If the platform closes or disappears, your own records will be your only proof of the winnings you reported.
Frequently Asked Questions
Do I have to report small wins like $50 or $100?
Yes. The IRS has no minimum threshold for reporting gambling winnings. Any amount, no matter how small, must be reported as income on your tax return. While the IRS is more likely to audit large wins, reporting all winnings is the correct approach and protects you from penalties.
What if I won money from betting with friends, not at a casino?
Winnings from informal bets with friends are also taxable income. However, the IRS is unlikely to know about these wins unless you report them or the amount is very large. You are still legally required to report them. Keeping records is harder in these situations, but the tax obligation remains.
Can I claim losses from years before if I didn't report them?
You can amend prior-year returns to report losses you did not claim before, but only going back three years. You would file an amended return (Form 1040-X) for each year. However, if you did not report winnings in those years either, amending to claim losses could trigger an audit. Consult a tax professional before amending old returns.
What happens if I don't report gambling winnings?
If the IRS discovers unreported winnings, you face penalties, interest, and potentially criminal charges for tax evasion if the amount is large or the omission was intentional. The IRS matches W-2G forms filed by casinos and sportsbooks against individual returns, so large wins are often caught. Smaller unreported wins are less likely to be detected, but the risk increases over time.
Do I owe taxes on winnings if I'm not a U.S. citizen?
Non-citizens who are U.S. residents for tax purposes must report gambling winnings the same way citizens do. Non-residents may face different rules and higher withholding rates. If you are not a U.S. citizen, consult a tax professional familiar with non-resident taxation before placing large bets.