How to Report Sports Betting Winnings on Your Tax Return

Whether you hit a big parlay on the NFL playoffs or cashed out a futures bet on the NBA Finals winner, understanding how to report sports betting winnings on your tax return is essential for every US bettor. This step-by-step guide walks you through the entire process, from gathering your records to filling out the correct forms, while helping you understand your obligations and avoid common mistakes.

Before you start panicking about owing the IRS money, take a breath. Reporting sports betting taxes is more straightforward than most people think. With the right information and our sports betting tax calculator, you can estimate what you might owe and file with confidence.

Note that tracking your betting activity is not just a tax requirement but also a core part of responsible gambling. Understanding your true wins and losses helps you maintain a healthy relationship with sports betting.

Quick Answer: Do You Have to Report Sports Betting Winnings?

Yes, you must report all sports betting winnings as taxable income, regardless of the amount and whether you received a tax form. This is the most important thing to understand about sports betting taxes in the US.

The IRS considers gambling winnings, including sports betting profits, to be taxable income. This applies whether you won $50 on a single NFL moneyline bet or $50,000 on a multi-leg parlay. There is no minimum threshold below which your winnings become tax-free.

Here is what you need to know upfront:

• All winnings are taxable: Every dollar you win from sports betting is considered income by the IRS
• Forms are not required for you to report: Just because you did not receive a W-2G or 1099 does not mean your winnings are tax-free
• Net vs gross matters: You report gross winnings, but you may be able to deduct losses if you itemize your deductions
• Federal and state apply: Most states with income tax also tax gambling winnings

Common Myth	The Reality
Winnings under $600 are tax-free	False. The $600 threshold only determines when sportsbooks must report to the IRS. You still owe tax on all winnings.
No form means no taxes owed	False. You must report all gambling income whether you receive a form or not.
Losses automatically offset winnings	Partially true. You can deduct losses, but only if you itemize deductions, and only up to the amount of your winnings.
DraftKings and FanDuel do not report small bets	Partially true for reporting to the IRS, but irrelevant for your tax obligation. You still owe taxes regardless of what the sportsbook reports.

Example scenarios:

• Scenario 1: You win $100 on a Super Bowl bet. No form is issued. You still owe federal income tax on that $100, reported as other income.
• Scenario 2: Throughout the year, you win $3,000 across multiple small bets but lose $4,000 total. You report the $3,000 in winnings as income. If you itemize, you can deduct up to $3,000 in losses (the amount of your winnings), but you cannot use the extra $1,000 in losses to reduce other income.

The bottom line: Do not assume that small wins or unreported wins are invisible to the IRS. Report everything and keep good records. For a complete overview of how sports betting taxes work in the US, see our complete sports betting tax guide.

Sports Betting Taxes in the US: The Big Picture

The IRS treats sports betting winnings the same as any other gambling income. This means your winnings are added to your total income for the year and taxed at your marginal tax rate.

There is no special sports betting tax rate. Instead, your gambling winnings are taxed as ordinary income, which means they are taxed at the same rates as your wages, salary, or freelance income. For most Americans, this means federal tax rates ranging from 10% to 37%, depending on your total taxable income and filing status.

Two layers of taxation apply:

1. Federal income tax: Applies to all US residents with gambling income
2. State income tax: Applies in most states that have an income tax (nine states have no state income tax)

When calculating how much you might owe, remember that gambling winnings push your income higher into your existing tax brackets. If you are already near the top of one bracket, a big win could push you into a higher bracket for that additional income.

For a deeper dive into federal and state tax obligations, how estimated taxes work, and strategies for managing your tax liability, read our sports betting taxes guide.

How to Report Sports Betting Winnings on Your Tax Return (Step-by-Step)

Reporting sports betting winnings on your federal tax return involves a few key steps. Follow this process to ensure you file correctly.

Step 1: Gather Your Records

Before you start your tax return, collect all documentation related to your sports betting activity:

• W-2G forms: For any winnings that triggered sportsbook reporting (typically $600+ at 300:1 or greater odds)
• 1099 forms: Some sportsbooks issue 1099-MISC or 1099-K forms
• Sportsbook account statements: Download your annual win/loss summary from each sportsbook you used
• Personal betting log: If you kept one, this helps verify your activity and supports any loss deductions

Most major sportsbooks like DraftKings, FanDuel, and BetMGM provide annual account statements showing your total wagered, total winnings, and net result. These are typically available in your account settings under tax documents by late January.

Step 2: Calculate Your Total Winnings

Add up all your gambling winnings for the tax year across every platform and every type of bet:

• Include wins from every sportsbook (DraftKings, FanDuel, BetMGM, Caesars, ESPN BET, etc.)
• Include in-person bets at retail sportsbooks
• Include all bet types: moneylines, spreads, totals, parlays, same-game parlays, futures, props
• Include promotional winnings from free bets or bonus bets (the profit portion is taxable)

Important note on promotional bets: If you receive a $100 free bet and win $150 (including the free bet amount), only the $50 profit is typically taxable. However, sportsbook reporting can vary, so check your statements carefully.

Step 3: Calculate Your Total Losses (If Itemizing)

If you plan to itemize deductions, add up your total gambling losses for the year. Remember:

• You can only deduct losses up to the amount of your winnings
• You need records to support your claimed losses
• Standard deduction filers cannot claim gambling loss deductions

Step 4: Report Winnings on Your Tax Return

Gambling winnings are reported on Schedule 1 (Additional Income and Adjustments to Income), which then flows to your Form 1040.

Step	Form	What You Do
1	Schedule 1, Line 8b	Enter your total gambling winnings (labeled as gambling income or other income depending on tax year)
2	Schedule 1, Line 10	Calculate total of Part I (total additional income)
3	Form 1040, Line 8	Transfer the Schedule 1 total to your 1040
4 (if itemizing)	Schedule A, Line 16	Enter gambling losses (up to winnings amount) as other itemized deduction

Note: Line numbers may vary slightly by tax year. Always refer to the current year instructions or use reputable tax software that handles this automatically.

Step 5: Handle State Tax Returns

If your state has income tax, you will likely need to report gambling winnings there as well. Most states follow federal rules, but some have important differences:

• Some states do not allow gambling loss deductions
• Some states have different reporting thresholds
• Non-resident winners may need to file in states where they placed bets

Check your specific state tax authority or consult a tax professional for state-specific guidance. See our section on state taxes below for more details.

Example walkthrough:

Say you are single, have $75,000 in wage income, and had $5,000 in sports betting winnings with $3,000 in documented losses. You plan to itemize deductions.

1. Report $5,000 in gambling winnings on Schedule 1
2. This brings your total income to $80,000
3. On Schedule A, deduct $3,000 in gambling losses (cannot exceed $5,000 winnings)
4. Your net additional taxable income from gambling is $2,000 ($5,000 - $3,000)
5. This $2,000 is taxed at your marginal federal rate

If you have any questions about complex scenarios like multi-state betting, significant promotional credits, or professional gambling status, consult a qualified tax professional.

Tax Forms You Might Receive: W-2G, 1099, and Sportsbook Statements

Understanding the tax forms related to sports betting helps you report correctly and avoid surprises. Here is what you might receive and when.

Form	When Issued	What It Reports
W-2G	Winnings of $600+ at 300:1 or greater odds, or $5,000+ winnings subject to withholding	Gross winnings, federal tax withheld, state tax withheld (if applicable)
1099-MISC	Sometimes issued for $600+ in gambling winnings when W-2G does not apply	Miscellaneous income including gambling
1099-K	Sometimes issued for payment processing above $600 threshold (rules vary by year)	Total payment volume processed
No form issued	Most sports bets under reporting thresholds	Nothing reported to IRS, but you still must report

The key point: Receiving a form means the IRS also received a copy. Not receiving a form does not change your tax obligation. You must report all gambling income regardless of whether a form was issued.

Most sports bettors will not receive a W-2G for typical bets because sports betting rarely triggers the 300:1 odds requirement. You are most likely to receive a W-2G for:

• High-odds parlay wins (10-leg parlays can exceed 300:1)
• Large futures bet wins with long odds
• Tournament pool winnings

For more details on how sportsbooks report to the IRS, see our guide on whether sportsbooks report to the IRS.

What Is Form W-2G for Sports Betting?

Form W-2G (Certain Gambling Winnings) is the tax form sportsbooks use to report significant gambling wins to both you and the IRS. If you receive one, the IRS already knows about that winning bet.

Key boxes on Form W-2G:

• Box 1: Gross winnings (the amount you won)
• Box 2: Date won
• Box 4: Federal income tax withheld (if any)
• Box 14: State winnings (if different from federal)
• Box 15: State income tax withheld

When you receive a W-2G, enter the information on your tax return and attach the form if filing by mail. If federal or state taxes were withheld, you will get credit for those amounts when calculating your final tax liability.

For a complete breakdown of Form W-2G, including box-by-box explanations and what to do when you receive one, see our Form W-2G sports betting guide.

What Is the $600 Rule, and Does It Make Small Bets Tax-Free?

No, the $600 rule does not make small bets tax-free. This is one of the most persistent myths in sports betting tax discussions.

The $600 threshold is a payer reporting requirement, not a taxpayer exemption. It determines when the sportsbook must send a W-2G to the IRS, but it does not change your obligation to report income.

Here is how it actually works:

• If you win $600 or more at odds of 300:1 or greater, the sportsbook issues a W-2G
• If you win $599 at 350:1 odds, no W-2G is issued
• In both cases, you owe tax on the full amount

Example: You hit a $10 long-shot parlay at 500:1 odds, winning $500. No W-2G is issued because the winnings are under $600. However, you still must report the $500 as gambling income on your tax return.

Think of the $600 rule like this: A restaurant does not issue a 1099 for every $10 tip they give a server, but the server still owes income tax on all their tips.

Can You Deduct Sports Betting Losses?

Yes, you can deduct sports betting losses, but there are important limitations that every bettor needs to understand.

The basic rules for deducting gambling losses:

1. You must itemize deductions: Gambling losses are only deductible if you itemize deductions on Schedule A instead of taking the standard deduction
2. Losses are limited to winnings: You can only deduct losses up to the amount of your gambling winnings for the year
3. You need documentation: Keep records of your losses to support your deduction
4. Losses cannot create a net loss: Excess losses cannot be used to reduce other income or carried forward to future years

Scenario	Winnings	Losses	Reportable Income	Deductible Losses	Net Tax Impact
More wins than losses	$5,000	$2,000	$5,000	$2,000	Tax on $3,000
Break even	$5,000	$5,000	$5,000	$5,000	Tax on $0
More losses than wins	$5,000	$8,000	$5,000	$5,000	Tax on $0 (excess $3,000 losses not deductible)
Standard deduction filer	$5,000	$4,000	$5,000	$0	Tax on $5,000

Important: Choosing between the standard deduction and itemizing requires comparing your total itemized deductions (including gambling losses) against the standard deduction amount. For tax year 2025, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly. Unless your total itemized deductions exceed these amounts, itemizing for gambling losses alone may not make sense.

For recreational bettors who take the standard deduction, this creates an asymmetric situation: you pay tax on your wins but get no tax benefit from your losses.

The session method: Some tax professionals discuss the session method, where you group bets into sessions and report the net result of each session. This is a complex area with specific IRS guidance and requirements. If you are considering this approach, consult a CPA or tax attorney familiar with gambling taxation. Do not attempt this without professional guidance.

For a comprehensive guide on deducting sports betting losses, including record-keeping requirements and strategies for maximizing your deduction, see our guide to deducting sports betting losses.

Do I Have to Itemize to Deduct Gambling Losses?

Yes, you must itemize deductions to claim gambling losses. This is a firm IRS requirement with no exceptions for recreational gamblers.

What this means in practice:

• If you take the standard deduction, you cannot deduct any gambling losses
• You must complete Schedule A (Itemized Deductions) to claim losses
• Gambling losses are reported on Schedule A, Line 16 (Other Itemized Deductions)
• Your total itemized deductions must exceed the standard deduction for itemizing to make sense

For many casual bettors, the math often does not work in favor of itemizing. If your mortgage interest, state taxes, charitable contributions, and gambling losses combined do not exceed the standard deduction, you are better off taking the standard deduction even though you cannot claim your betting losses.

This is why tracking your complete financial picture, not just your gambling activity, is important when planning for taxes. See our gambling loss deduction guide for more details on making this decision.

State Taxes on Sports Betting Winnings

Beyond federal taxes, most states with an income tax also tax gambling winnings, including sports betting profits. The rules vary significantly by state, and understanding your specific state situation is crucial for accurate tax planning.

General principles:

• States with income tax generally tax gambling winnings as ordinary income
• State tax rates range from about 2.5% to over 13% depending on the state and your income level
• Some states have flat tax rates while others have progressive brackets
• Withholding requirements vary by state
• Residency determines which state taxes your winnings, not where you placed the bet (with some exceptions)

States with no income tax (you only pay federal tax on gambling winnings):

The following nine states have no state income tax on gambling winnings:

• Alaska: No state income tax
• Florida: No state income tax
• Nevada: No state income tax (despite being a gambling hub)
• New Hampshire: No tax on gambling income (taxes only interest and dividends)
• South Dakota: No state income tax
• Tennessee: No tax on wage or gambling income (recently eliminated income tax)
• Texas: No state income tax
• Washington: No state income tax
• Wyoming: No state income tax

If you live in one of these states, you only need to worry about federal tax on your sports betting winnings. However, you may still need to file in other states if you won money while physically present there.

High-tax states for gamblers:

Some states have notably high tax rates that can significantly impact your after-tax gambling returns:

State	Top Marginal Rate	Loss Deduction Allowed	Additional Notes
California	13.3%	Yes	Highest state rate, but allows loss deductions
New York	10.9%	Yes	NYC residents may owe additional local tax
New Jersey	10.75%	Yes	High rate but popular legal sports betting market
Oregon	9.9%	Yes	No sales tax but high income tax
Minnesota	9.85%	Yes	Progressive brackets

Trap states for bettors (states that do not allow gambling loss deductions):

These states create a particularly difficult situation for bettors because you cannot offset your losses against your winnings at the state level, even if you itemize:

State	State Tax Rate (Top Marginal)	Allows Gambling Loss Deduction	Impact
Indiana	3.05%	No	Taxes gross winnings with no loss offset
Massachusetts	5.0%	No	Taxes gross winnings with no loss offset
Wisconsin	7.65%	No	Taxes gross winnings with no loss offset

Example of trap state impact: Say you live in Wisconsin and have $10,000 in gambling winnings and $10,000 in losses (breaking even). At the federal level, if you itemize, you can deduct the losses and owe $0 in additional federal tax on gambling. But in Wisconsin, you owe state tax on the full $10,000 in winnings with no offset for your losses. At 7.65%, that means you owe $765 in state tax even though you did not actually profit from gambling.

In these trap states, you pay state income tax on your total winnings even if you had offsetting losses. This can create situations where you pay state tax even though you broke even or lost money overall for the year. If you live in a trap state, factor this into your betting decisions and bankroll management.

Multi-state considerations:

If you travel and place bets in multiple states, or if you live in one state but bet in another, tax obligations can become complex:

• Online betting: Generally taxed in your state of residence, regardless of the sportsbook location
• In-person betting: If you physically travel to another state and place bets at a retail sportsbook, that state may require you to report winnings there
• Non-resident withholding: Some states withhold taxes from non-resident gambling winnings at casinos and sportsbooks
• Tax credits: If you pay tax to another state on gambling income, you may be able to claim a credit on your home state return

For example, if you live in New Jersey but travel to Pennsylvania to place bets at a retail sportsbook and win, you may need to file a non-resident Pennsylvania return for that income. You would then claim a credit on your New Jersey return for taxes paid to Pennsylvania to avoid double taxation.

Consult a tax professional if you bet across state lines or have complex multi-state situations. The rules can vary significantly and change over time.

For a complete state-by-state breakdown of sports betting tax rates and rules, check your state tax authority website or speak with a local CPA familiar with gambling taxation.

How to Use the Sports Betting Tax Calculator

Estimating your tax liability before you file helps you plan ahead and avoid surprises. Our sports betting tax calculator helps you understand roughly what you might owe on your gambling winnings.

How the Calculator Works

The sports betting tax calculator estimates your federal and state tax on gambling income based on:

• Your annual income (non-gambling)
• Your filing status (single, married filing jointly, etc.)
• Your state of residence
• Your total gambling winnings for the year
• Your total gambling losses (if itemizing)
• Whether you are itemizing deductions

The calculator also lets you compare current 2025 tax rules against the proposed 2026 OBBBA rules that would cap loss deductions at 90% of winnings.

Step-by-Step Calculator Guide

1. Select tax rules: Choose 2025 (current rules with 100% loss deduction) or 2026+ OBBBA (90% loss cap)
2. Enter your annual income: This is your non-gambling income (wages, salary, etc.)
3. Select filing status: Single, Married Filing Jointly, Married Filing Separately, or Head of Household
4. Choose your state: Select your state of residence for state tax estimates
5. Indicate if you itemize: Select yes if you will itemize deductions (required to deduct losses)
6. Enter gambling winnings: Your total gross winnings for the year
7. Enter gambling losses: Your total documented losses for the year

Example Calculations

Example 1: Casual bettor, break-even year

• Annual income: $60,000
• Filing status: Single
• State: Texas (no state income tax)
• Gambling winnings: $2,000
• Gambling losses: $2,000
• Itemizing: Yes

Result: If itemizing, your net taxable gambling income is $0, so additional tax is $0. However, you must still report the $2,000 in winnings and claim the $2,000 loss deduction separately.

Example 2: Winning year with losses

• Annual income: $75,000
• Filing status: Single
• State: New Jersey (10.75% top rate)
• Gambling winnings: $10,000
• Gambling losses: $6,000
• Itemizing: Yes

Result: Net taxable gambling income is $4,000. You will owe additional federal tax at your marginal rate (likely 22%) plus New Jersey state tax on the net amount.

Important disclaimer: This calculator provides estimates only. It is not a substitute for professional tax advice. Tax laws are complex, and individual circumstances vary. Always consult a qualified tax professional or use reputable tax software for actual filing.

Remember that sports betting carries risk. Use this calculator as part of understanding your true costs, including taxes, when evaluating your betting activity.

Professional vs Casual Sports Bettors: How Your Tax Rules Change

The IRS distinguishes between recreational (casual) gamblers and professional gamblers. This distinction significantly affects how you report income and what deductions you can claim.

Recreational (Casual) Bettor:

• Most sports bettors fall into this category
• Report winnings as other income on Schedule 1
• Deduct losses only if itemizing, and only up to winnings amount
• Cannot deduct business expenses related to gambling
• Cannot use losses to create a net loss against other income

Professional Gambler:

• Treats gambling as a trade or business
• Reports gambling income and expenses on Schedule C
• Can deduct ordinary and necessary business expenses
• Self-employment tax may apply
• Much higher IRS scrutiny and audit risk

Aspect	Casual Bettor	Professional Gambler
Income reported on	Schedule 1 (Other Income)	Schedule C (Business Income)
Loss deduction	Schedule A (must itemize), limited to winnings	Schedule C, can create net loss
Business expense deduction	No	Yes (data services, travel, equipment)
Self-employment tax	No	Yes
IRS scrutiny level	Lower	Much higher

Are you a professional gambler?

Qualifying as a professional gambler is rare and fact-specific. The IRS looks at factors including:

• Do you gamble regularly and continuously (not just occasionally)?
• Is gambling your primary source of income?
• Do you keep detailed business records?
• Do you pursue gambling with the intent to profit as a livelihood?
• Have you developed expertise and skills to consistently profit?

Most sports bettors, even very active ones, are recreational gamblers for tax purposes. Attempting to claim professional status without genuinely qualifying invites audits and penalties.

Bottom line: Do not assume you can file as a professional gambler to get better deductions. Unless gambling is truly your primary occupation conducted in a business-like manner, you are almost certainly a recreational bettor. If you think you might qualify as a professional, consult a tax attorney or CPA before filing.

For more on the distinction between professional and casual bettor tax treatment, see our professional gambler tax guide.

Future Changes: The One Big Beautiful Bill and 2026 Gambling Tax Rules

Tax laws change, and sports bettors should be aware of upcoming changes that could significantly impact how gambling income is taxed starting in 2026.

The One Big Beautiful Bill (OBBBA) Proposal

The One Big Beautiful Bill includes provisions that would change gambling loss deductions starting in tax year 2026:

• 90% loss deduction cap: Gamblers could only deduct 90% of their gambling losses, down from 100% currently
• Phantom income: This creates taxable income even when you break even or lose money

Scenario	Current Rules (2025)	OBBBA Rules (2026+)
$10,000 winnings, $10,000 losses (break even)	Deduct $10,000 losses, net taxable = $0	Deduct only $9,000 (90%), net taxable = $1,000
$10,000 winnings, $15,000 losses (net loss)	Deduct $10,000 losses (capped at winnings), net taxable = $0	Deduct only $9,000 (90% of winnings cap), net taxable = $1,000
$10,000 winnings, $5,000 losses (net profit)	Deduct $5,000 losses, net taxable = $5,000	Deduct $4,500 (90% of losses), net taxable = $5,500

What is phantom income?

Under the proposed 2026 rules, phantom income occurs when you cannot deduct all your actual losses. If you bet $50,000 and win $50,000 (breaking even in real money terms), you would have $5,000 in taxable phantom income because you can only deduct 90% of your losses.

This particularly affects high-volume bettors who churn significant amounts through sportsbooks even if their net profit is small or zero.

Important caveats:

• The final law may change before taking effect
• Implementation details may differ from current proposals
• Tax professionals are still analyzing implications
• OddsIndex will update this guide as the law evolves

Use our tax calculator to model how the 2026 rules might affect your specific situation by toggling between 2025 and 2026+ rules.

How the 90% Loss Cap Could Affect High-Volume Bettors

High-volume sports bettors face the biggest impact from the proposed OBBBA changes. If you bet frequently and have significant turnover even with modest net profits, the 90% cap creates taxable income from losses you actually incurred.

Example: A sharp bettor places $500,000 in total wagers during the year, wins $510,000 back, for a net profit of $10,000 (2% ROI). Under current rules, if they itemize, they owe tax on the $10,000 net profit. Under OBBBA rules, they can only deduct 90% of their $500,000 in losses ($450,000), creating $60,000 in taxable income despite only having $10,000 in actual profit.

If you are a high-volume bettor, consider:

• Starting to track your betting activity more carefully now
• Modeling your potential 2026 liability using our calculator
• Consulting with a tax professional about planning strategies
• Considering how this affects your overall betting approach

For more on professional betting tax considerations, see our professional gambler tax guide. For record-keeping best practices, see our sports betting record-keeping guide.

Sportsbook-Specific Reporting: DraftKings, FanDuel, BetMGM, and More

Each major US sportsbook provides tax documentation to help you report your gambling income. Here is how to find your tax forms and statements.

General process for most sportsbooks:

1. Log into your sportsbook account
2. Navigate to Account Settings or Profile
3. Look for Tax Documents, Tax Center, or Documents section
4. Download your W-2G forms (if any) and annual activity statement
5. Review the win/loss summary for accuracy

Where to find tax documents by sportsbook:

• DraftKings: Account menu, then Tax Documents or Statements
• FanDuel: Account menu, then Tax Information or Documents
• BetMGM: Account settings, then Tax Documents
• Caesars Sportsbook: Account menu, then Tax Center
• ESPN BET: Account settings, then Statements or Tax Documents
• bet365: Account menu, then History/Statements

Most sportsbooks make tax documents available by late January for the prior tax year. If you cannot find your documents, contact customer support.

Does DraftKings report to the IRS?

Yes, DraftKings and all legal US sportsbooks report certain gambling winnings to the IRS when required (typically W-2G situations). However, even when sportsbooks do not report smaller wins, you are still legally required to report all gambling income.

Important: Your year-end statement shows your activity from that sportsbook, but you may have accounts at multiple books. Make sure to gather documentation from every sportsbook you used during the year.

For more details on what sportsbooks report and when, see our guide on whether sportsbooks report to the IRS.

Record-Keeping and Responsible Gambling

Good record-keeping serves two important purposes: it helps you file accurate tax returns and supports healthy, responsible betting habits.

What to Track for Tax Season

The IRS expects gamblers to maintain records that can verify their reported income and losses. Keep track of:

• Date of each bet: When you placed the wager
• Sportsbook used: Which platform or retail location
• Type of bet: Moneyline, spread, parlay, futures, etc.
• Sport and event: NFL Week 1, NBA Finals Game 5, etc.
• Amount wagered: Your stake
• Odds: The odds you received
• Result: Win or loss
• Profit or loss amount: How much you won or lost

You can track this in a spreadsheet, a dedicated app, or a notebook. The key is consistency and contemporaneous records (tracking as you go, not reconstructing months later).

Promotional bets: Track free bets and bonus bets separately, noting the promotional value and actual profit.

For a detailed record-keeping template and best practices, see our sports betting record-keeping guide.

The Connection to Responsible Gambling

Tracking your betting activity is not just about taxes. It is a core practice of responsible gambling:

• Know your true results: Understanding whether you are winning or losing over time helps you make informed decisions
• Recognize patterns: Tracking can reveal if you are betting more than you intended
• Set and maintain limits: Records help you stick to your bankroll management plan
• Calculate true ROI: Factor in taxes to understand your actual return

Sports betting should be entertainment, not a source of financial stress. If you find that betting is no longer fun, or if you are chasing losses or betting more than you can afford, take a step back.

Resources for help:

• National Council on Problem Gambling: 1-800-522-4700
• Self-exclusion programs available at all legal sportsbooks
• Deposit limits, time limits, and cooling-off periods

Understanding taxes is part of understanding the true cost of betting. A winning bettor who ignores taxes may find their actual returns far lower than expected.

Frequently Asked Questions

Do I have to report all sports betting winnings?

Yes, you must report all sports betting winnings as taxable income, regardless of the amount. There is no minimum threshold below which winnings become tax-free. Even if you did not receive a W-2G or any other tax form, you are required to report your gambling income to the IRS.

What happens if I do not report gambling winnings?

Failing to report gambling winnings is tax evasion, which can result in penalties, interest on unpaid taxes, and in serious cases, criminal prosecution. If you received a W-2G, the IRS already has a record of that income and will likely flag a return that does not include it. For unreported income without forms, the IRS may discover discrepancies through audits or pattern matching.

How do I report sports betting on my tax return?

Report gambling winnings on Schedule 1, Line 8b (or the applicable other income line) of your federal tax return. The Schedule 1 total then flows to Form 1040. If you itemize deductions and want to claim gambling losses, report those on Schedule A, Line 16. The losses are limited to the amount of your gambling winnings.

Do you pay taxes on a $100 sports betting win?

Yes, a $100 sports betting win is taxable income. While the sportsbook likely will not issue a W-2G for this amount (typically only issued for $600+ at 300:1+ odds), you are still required to report the $100 as gambling income on your tax return.

What is a W-2G form for sports betting?

Form W-2G (Certain Gambling Winnings) is the tax form that sportsbooks issue when you have a significant win. For sports betting, this typically means winnings of $600 or more at odds of 300:1 or greater. The form reports your gross winnings and any taxes withheld. Both you and the IRS receive copies.

Can you deduct sports betting losses?

Yes, but only if you itemize deductions on Schedule A. Gambling losses can only be deducted up to the amount of your gambling winnings for the year. You cannot use excess losses to reduce other income or carry them forward to future years. You need documentation to support any losses you claim.

What states tax sports betting winnings?

Most states with an income tax also tax gambling winnings at ordinary income rates. Nine states have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Additionally, some states like Indiana, Massachusetts, and Wisconsin do not allow gambling loss deductions, meaning you pay state tax on gross winnings.

What is the One Big Beautiful Bill gambling tax change?

The One Big Beautiful Bill (OBBBA) is proposed legislation that would cap gambling loss deductions at 90% of winnings starting in 2026. Currently, you can deduct 100% of losses up to your winnings amount. Under OBBBA, the 10% you cannot deduct creates phantom income, potentially resulting in tax liability even if you broke even or lost money overall.

Responsible Gambling Notice

Sports betting should be entertaining, not a source of financial stress. Remember that:

• All gambling involves risk, and the house always has an edge over time
• Taxes reduce your actual returns, so factor them into your calculations
• Only bet what you can afford to lose
• Track your wins and losses to understand your true results
• Set limits on how much you bet and how much time you spend

If gambling is no longer fun, or if you find yourself betting more than you intended or chasing losses, resources are available to help. Contact the National Council on Problem Gambling at 1-800-522-4700, use self-exclusion tools at your sportsbook, or reach out to a mental health professional.