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Find a locationKey takeaways
- Gambling and sports winnings are taxable as regular income.
- All types of gambling winnings are taxable, including casino winnings, pool-based winnings, speculation-based winnings, and non-cash prizes.
- IRS Form W-2G, Certain Gambling Winnings, is used by casinos and other gambling establishments to report winnings that reach a certain threshold.
- You must report all gambling winnings on your tax return, regardless of whether you get Form W-2G or not.
- If you receive Form 1099 instead of Form W-2G, it’s usually because of the platform you used to gamble or how you won.
- For tax year 2026, you can deduct 90% of your gambling losses for the year, up to, but not more than, the amount of your winnings, if you meet the IRS’s requirements.
- Keep a detailed log of your gambling wins and losses throughout the year, especially if you plan to deduct your losses.
- Report your gambling winnings on Schedule 1 of Form 1040, and your losses, if itemizing, on Schedule A of Form 1040.
- Most states tax gambling and sports betting winnings as regular income, but there are some exceptions.
Win or lose, it’s important to know how gambling can impact your tax situation. In this article, we cover which winnings are taxable, when you’ll get Form W-2G or 1099, when losses may be deductible, how to report wins and losses on your return, and more.
Are gambling and sports betting winnings taxable?
Yes, gambling and sports winnings are taxable, regardless of how big or small the winnings and type. Whether you won the lottery or a bet on a local game, the IRS sees your winnings as regular income and taxes them at your regular rate.
If your net winnings are greater than $5,000 from sweepstakes, wagering pools, or lotteries, the IRS requires the casino or other gambling establishment to withhold a flat 24% tax, which may not cover the full tax you owe. Additionally, if you do not have a Social Security number (SSN) or tax identification number (TIN), the gambling establishment must withhold that same 24% tax from your winnings.
There is some good news, though. The IRS also lets you deduct some of your losses.
What types of gambling winnings are taxable?
All types of gambling winnings are taxable as regular income, including:
- Casino winnings, such as electronic games and slot machines, traditional table games, like blackjack or roulette, and lounge games, like bingo or keno
- Pool-based winnings, such as lotteries, sweepstakes, raffles, and drawings
- Speculative-based winnings, like sports betting, horse race betting, fantasy leagues, and office pools
- Non-cash prizes or awards, like vacations, concert tickets, travel vouchers, appliances, and jewelry, as well as high-ticket items, such as real estate or vehicles
Are non-cash gambling prizes taxable?
Yes, non-cash gambling prizes are taxable as regular income. The tax you pay for non-cash gambling prizes is based on their fair market value, and you must declare it on the “other income” line of your tax return.
Are online gambling and sportsbook winnings taxable?
Yes, online gambling and sportsbook winnings are taxable as regular income. Regardless of where you win, be it online, at your local watering hole, or in Las Vegas, the IRS treats your winnings as taxable income.
What is Form W-2G and when will I receive one?
IRS Form W-2G, Certain Gambling Winnings, is used by casinos and other gambling establishments to report winnings that reach a certain threshold.
You will not receive Form W-2G for every small win. The IRS has different reporting thresholds for different types of winnings. Here’s how they break down:
| Winnings type | Reporting threshold |
|---|---|
| Slot machine or bingo | $2,000 |
| Keno | $2,000 (minus the original wager) |
| Poker tournaments | $5,000 (minus buy-in) |
| Lotteries, sweepstakes, or betting pools | $600 (if winnings are at least 300 times the wager amount) |
| Any winnings subject to automatic withholding | - |
Report your winnings from Form W-2G, as well as any other winnings for the year, on Schedule 1 of Form 1040, U.S. Individual Income Tax Return.
Do I have to report gambling winnings if I do not get a tax form?
Yes, you must report all gambling winnings on your tax return, regardless of whether you get Form W-2G or not.
That’s why it’s important to keep track of your gambling winnings yourself, rather than relying on the casino or other establishment to send you Form W-2G. That way, if your winnings do not reach the reporting threshold, you can still report them accurately on your return.
What if I receive a 1099 instead of a W-2G?
If you receive Form 1099 instead of Form W-2G, it’s usually because of the platform you used to gamble or how you won.
You may receive IRS Form 1099-MISC, Miscellaneous Information, if you play daily fantasy sports on a site like DraftKings or FanDuel, or if you receive referral bonuses, promotional site credits, or prizes from an online sportsbook.
You may receive IRS Form 1099-K, Payment Card and Third Party Network Transactions, if you receive payment for winnings on a third-party payment platform, like Venmo or PayPal.
Report the total from Form 1099-MISC and/or 1099-K on Schedule 1 on Form 1040.
Can I deduct gambling losses?
For tax year 2026, you can deduct 90% of your gambling losses for the year, up to, but not more than, the amount of your winnings. However, you must meet the IRS’s requirements to do so:
- You must itemize your deductions rather than taking the standard deduction when you file your tax return. If you choose to take the standard deduction, you cannot deduct your gambling losses.
- You must report all your gambling winnings on your tax return (the IRS requires that you do this, even if you aren’t deducting your gambling losses).
- You must claim your losses as a separate itemized deduction, not directly against your reported winnings. For example, if you won $5,000, but lost $4,500, you must still report your winnings as $5,000 (not $500) and deduct 90% of your loss separately.
Take note that if you decide to deduct your gambling losses, you must keep detailed records.
What records should I keep to report winnings and support losses?
Keep a detailed log of your gambling wins and losses throughout the year, especially if you plan to deduct your losses. If the IRS ever asks you to back up losses you’ve claimed, you’ll be glad to have good records to show them.
Make sure to take note of the:
- Dates
- Names and locations of the gambling establishments
- Amounts of your wins and losses
- Names of the people present (applicable for games you play with or against others, not solo games)
If the IRS audits you, and you do not have the records to back up the losses you’ve deducted, the IRS could reject your deduction, and you could end up facing penalties and interest for underpayment.
How to report gambling winnings and losses on taxes
Report your gambling winnings, including amounts from Form W-2G and/or 1099, as well as all other winnings, on Schedule 1 of Form 1040. Report your losses, if itemizing, on Schedule A of Form 1040.
Here’s an example: Let’s say you win $8,000 in 2026 and lose $6,000. Report the full $8,000 as other income on Schedule 1. Then, calculate your deduction amount, which is 90% of your losses. In this case, you will report your loss of $5,400 as an itemized deduction on Schedule A.
Do states tax gambling and sports betting winnings?
Most states tax gambling and sports betting winnings as regular income, but there are exceptions. Some states, like Washington and Texas, don’t tax any income, including gambling winnings, at all, and California does not tax California state lottery winnings but does tax other forms of gambling winnings.
States differ in how they handle gambling losses, too. Some states, like Missouri, treat losses like the IRS, allowing you to write some off on your return, but others, like Illinois and Kansas, don’t allow you to deduct any of your gambling losses but still tax your winnings.
Make sure to check your state’s official tax website, or consult your local Tax Pro, to learn how your state treats gambling wins and losses at tax time.
Whether you need help determining if you should itemize to take the gambling loss deduction, need guidance on what to keep track of, or just have questions or concerns, your local Jackson Hewitt Tax Pro is here all year and ready to help. Find tax services near you, then walk in or book now.
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About the Author
Sharon Brucker is a Senior Tax Research Analyst at Jackson Hewitt Tax Services who specializes in consumer income tax and estate and trust issues. A Certified Public Accountant (CPA) with a Master of Business Administration (MBA) and more than 35 years of experience, Sharon helps to ensure that the most current IRS tax information is distributed throughout Jackson Hewitt and its franchisees. She also simplifies complex tax laws for Tax Pros and clients alike.
*This content is for general informational purposes only. It is not intended to be comprehensive and should not be construed as professional tax or financial advice for any specific individual tax situation. Taxpayers should always consult a qualified professional for individual guidance. This information constitutes a solicitation under the Treasury Department's Circular 230. Most offices are independently owned and operated.
