State Taxes on Sports Betting: Which States Tax Your Winnings

Most sports bettors know the IRS takes a cut of their winnings, but many overlook a second layer of taxation that can significantly increase the total bill: state income taxes. Depending on where you live and where you place your bets, state taxes on sports betting can add anywhere from zero to more than 13 percent on top of your federal obligation.

This guide breaks down state tax rates on gambling winnings across every state with legal sports betting, explains how multi-state betting works, and helps you understand what you actually owe when tax season arrives. For a broader overview of federal obligations, see our complete sports betting tax guide.

Important: This guide is for general educational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently, and individual circumstances vary. Always consult a qualified tax professional for advice specific to your situation. Your state revenue department is the authoritative source for current state tax rules.

How state taxes on sports betting work

When you win a sports bet in the United States, you potentially owe taxes to two entities: the federal government and your state government. The federal tax obligation is the same for everyone (gambling winnings are taxed at your ordinary income rate), but state taxes vary dramatically depending on where you live.

Most states that levy an income tax treat gambling winnings, including sports betting, as taxable income. Your winnings get added to your other income for the year, and you pay your state marginal rate on the total. A few states have flat tax rates, which simplifies the calculation.

State taxes on sports betting are separate from the tax that sportsbook operators pay to the state for their license to operate. The operator tax (sometimes called the gross gaming revenue tax) is paid by the company, not by you. Your obligation is personal income tax on your winnings.

Understanding your sports betting tax rate at both the federal and state level is essential for calculating your true cost of betting. A bettor in New York City faces a combined federal, state, and city tax rate that can exceed 50 percent on gambling winnings, while a bettor in Nevada or Texas owes only the federal portion.

States with no income tax on sports betting

Nine states do not levy a personal income tax, which means sports betting winnings are not taxed at the state level. If you live in one of these states, you only owe federal taxes on your gambling income.

State	State Income Tax	Legal Sports Betting?
Alaska	None	No
Florida	None	Yes
Nevada	None	Yes
New Hampshire	None (interest and dividends tax repealed 2025)	Yes
South Dakota	None	Yes
Tennessee	None (Hall income tax repealed 2021)	Yes
Texas	None	No (as of 2026)
Washington	None	Yes (tribal only)
Wyoming	None	Yes

Bettors in Florida, Nevada, New Hampshire, South Dakota, Tennessee, Washington, and Wyoming benefit from legal sports betting with no state income tax on winnings. This means a winning parlay in Las Vegas or a mobile bet in Tennessee is only subject to federal taxation.

Note that Washington state has legal sports betting through tribal casinos only, and online/mobile betting has limited availability. Check our state-specific legal guides for the latest on where and how you can bet in each state.

Complete state-by-state sports betting tax rates

The following table lists every state with legal sports betting and the applicable state income tax rate on gambling winnings. Rates shown are the top marginal rate unless noted as a flat rate. Your actual rate may be lower depending on your total taxable income.

State	Top State Tax Rate on Gambling Winnings	Tax Structure	Notes
Arizona	2.5%	Flat	Flat rate applies to all income including gambling
Arkansas	4.4%	Graduated	Top rate for income over $87,001
Colorado	4.4%	Flat	Flat rate on all taxable income
Connecticut	6.99%	Graduated	Top rate applies to income over $500,000
Delaware	6.6%	Graduated	Retail only; top rate for income over $60,000
Florida	0%	None	No state income tax
Illinois	4.95%	Flat	Flat rate on all income
Indiana	3.05%	Flat	Flat rate; some counties add local tax
Iowa	5.7%	Graduated	Top rate for income over $78,435
Kansas	5.7%	Graduated	Top rate for income over $30,000 (single)
Kentucky	4.0%	Flat	Flat rate on all taxable income
Louisiana	4.25%	Graduated	Top rate for income over $50,000
Maine	7.15%	Graduated	Top rate for income over $58,050 (single)
Maryland	5.75%	Graduated	Top rate; county taxes add 2.25-3.2%
Massachusetts	9.0%	Flat (with surtax)	5% base rate + 4% surtax on income over $1M
Michigan	4.25%	Flat	Flat rate; some cities add local income tax
Mississippi	4.7%	Graduated	Retail only; top rate for income over $10,000
Montana	5.9%	Graduated	Top rate for income over $20,500
Nebraska	5.84%	Graduated	Top rate for income over $35,730 (single)
Nevada	0%	None	No state income tax
New Hampshire	0%	None	No state income tax on gambling winnings
New Jersey	10.75%	Graduated	Top rate for income over $1M; 3% withholding on gambling wins over $10,000
New York	10.9%	Graduated	Top rate for income over $25M; NYC adds 3.876%
North Carolina	4.5%	Flat	Flat rate on all taxable income
Ohio	3.5%	Graduated	Top rate for income over $115,300; some cities add local tax
Oregon	9.9%	Graduated	Top rate for income over $125,000 (single)
Pennsylvania	3.07%	Flat	Flat rate; some localities add earned income tax
Rhode Island	5.99%	Graduated	Top rate for income over $166,950
South Dakota	0%	None	No state income tax
Tennessee	0%	None	No state income tax
Vermont	8.75%	Graduated	Top rate for income over $229,500 (single)
Virginia	5.75%	Graduated	Top rate for income over $17,001
Washington	0%	None	No state income tax; tribal sportsbooks only
West Virginia	5.12%	Graduated	Top rate for income over $60,000
Wisconsin	7.65%	Graduated	Top rate for income over $315,000 (single)
Wyoming	0%	None	No state income tax

Tax rates are subject to change. Check your state revenue department website for the most current rates and brackets. Several states have been reducing income tax rates in recent years, and more changes may be enacted.

States with the highest tax rates on betting winnings

If you live in a high-tax state, the combined federal and state burden on your sports betting winnings can be substantial. These states take the biggest bite out of your gambling profits:

New York leads the pack with a top state rate of 10.9 percent. Bettors in New York City face an additional city income tax of up to 3.876 percent, bringing the potential combined state and local rate above 14.7 percent before federal taxes.

New Jersey is close behind at 10.75 percent for top earners. New Jersey also withholds a flat 3 percent on gambling winnings over $10,000, which gets applied toward your final state tax bill.

Oregon charges up to 9.9 percent on income over $125,000. Since Oregon has no sales tax, income tax rates tend to run higher than the national average.

Massachusetts applies a 5 percent flat rate to most income, but voters approved a 4 percent surtax on income exceeding $1 million in 2022. A bettor who hits a massive jackpot pushing their total annual income above $1 million would face a 9 percent state rate on the excess.

Vermont and Wisconsin round out the high-tax group, with top rates of 8.75 percent and 7.65 percent respectively.

To illustrate the impact, consider a bettor who wins $10,000 in profit over the course of a year. Assuming a 22 percent federal marginal rate:

State	State Tax Rate	State Tax on $10,000	Federal Tax (22%)	Total Tax	Take-Home
New York (NYC)	~14.7%	$1,470	$2,200	$3,670	$6,330
New Jersey	10.75%	$1,075	$2,200	$3,275	$6,725
Oregon	9.9%	$990	$2,200	$3,190	$6,810
Pennsylvania	3.07%	$307	$2,200	$2,507	$7,493
Nevada	0%	$0	$2,200	$2,200	$7,800

The difference between a no-tax state and a high-tax state can amount to more than $1,400 in extra taxes on $10,000 in winnings. Over years of active betting, this adds up considerably.

States with the lowest tax rates on betting winnings

Outside of the no-income-tax states covered above, several states with legal sports betting have relatively low state tax rates that keep the overall tax burden more manageable:

Pennsylvania charges a flat 3.07 percent on all income, making it one of the most tax-friendly states for bettors that still levies an income tax. Combined with the large and competitive sportsbook market in the state, Pennsylvania is a favorable environment for sports bettors from a tax perspective.

Indiana applies a flat 3.05 percent rate, though some counties add a local income tax that can increase the total. Even with the county addition, Indiana remains well below the national average.

Arizona moved to a flat 2.5 percent rate, which is among the lowest in the country for states with an income tax. Combined with a growing sports betting market, Arizona offers favorable tax treatment for bettors.

Ohio tops out at 3.5 percent, and most bettors will fall into a lower bracket. Some Ohio municipalities levy their own income taxes, so the effective rate can vary by city.

North Carolina charges a flat 4.5 percent, which has been declining in recent years as the state phases in rate reductions.

Multi-state betting: where do you owe taxes?

Mobile sports betting has made it easy to place bets across state lines. If you travel for work, attend an out-of-state game, or live near a border, you may end up placing bets in more than one state. This raises an important question: which state gets to tax your winnings?

The general rules are:

Your home state taxes all your income. Most states tax residents on their worldwide income, including gambling winnings earned in other states. If you live in New York, your sports betting winnings are subject to New York state tax regardless of where you placed the bet.

The state where you placed the bet may also tax you. Some states require nonresidents to pay tax on income sourced within the state, including gambling winnings. If you visit New Jersey and win $5,000 on a bet placed while physically in the state, New Jersey may consider that income sourced to New Jersey.

Credits prevent double taxation (usually). Most states offer a credit for taxes paid to another state on the same income. If you pay New Jersey tax on winnings earned there, your home state typically allows a credit for that amount on your home state return. You generally end up paying the higher of the two rates, not both.

Mobile betting complicates things. When you use a mobile sportsbook, the bet is typically sourced to the state where you are physically located when you place it. Geolocation technology used by sportsbook apps determines this. If you live in Pennsylvania but place a bet while visiting Ohio, that bet may be sourced to Ohio for tax purposes.

In practice, most states focus enforcement on residents reporting their own income. If you are a casual bettor who occasionally bets in another state, the most important step is to accurately report all winnings on your home state return. Consult a tax professional if you have significant winnings across multiple states.

How to report state taxes on sports betting

Reporting gambling winnings on your state tax return generally follows these steps:

Step 1: Gather your records. Compile all W-2G forms, sportsbook account statements, and your own win/loss log for the tax year. Most online sportsbooks provide annual account summaries that show total deposits, withdrawals, and net results.

Step 2: Report winnings on your federal return first. Gambling winnings go on Schedule 1 (Form 1040) as other income. Your state return typically starts with your federal adjusted gross income, which already includes gambling winnings. For detailed instructions, see our guide on how to report sports betting winnings on your tax return.

Step 3: Complete your state income tax return. In most states, gambling winnings flow automatically from your federal AGI. Some states require you to list gambling income separately or make adjustments. Check your state tax form instructions for the specific line.

Step 4: Claim any applicable deductions. If you itemize deductions at the federal level, you can deduct gambling losses up to the amount of your winnings. Many states follow federal rules for loss deductions, but some do not allow them or have different limits. Verify your state rules before assuming losses are deductible.

Step 5: Claim credits for taxes paid to other states. If you paid tax on gambling winnings to another state, complete your home state credit form to avoid double taxation. You will need documentation of the tax paid to the other state.

Key deadlines: State tax returns are generally due on the same date as your federal return (April 15 for most filers). Some states have different deadlines, so check with your state revenue department.

If you want to estimate your combined federal and state tax burden before filing, our sports betting tax calculator can help you model different scenarios.

Can you deduct gambling losses on state taxes?

The ability to deduct gambling losses varies by state. At the federal level, you can deduct gambling losses up to the amount of your winnings if you itemize deductions on Schedule A. Many states follow this federal treatment, but not all.

States that generally follow federal loss deduction rules: Most states that use federal AGI or federal taxable income as the starting point for their state return implicitly allow gambling loss deductions if you itemize. This includes states like New York, New Jersey, Illinois, Michigan, and many others.

States that limit or disallow gambling loss deductions: A few states do not allow gambling losses as a deduction or have different rules. For example, some states start with federal AGI before itemized deductions, which means your gambling winnings are included but your losses may not be deductible in the same way.

The standard deduction trap: If you take the standard deduction on your federal return instead of itemizing, you cannot deduct gambling losses at the federal level. This means your gambling winnings are fully taxable with no offset. Most states follow the same logic for their standard vs. itemized deduction choice.

Maintaining detailed records of your wins and losses is essential, regardless of your state. Sportsbook account statements, bet histories, and a personal gambling log all serve as documentation if your deductions are questioned.

Frequently asked questions

Do I have to pay state taxes on sports betting winnings?

In most states, yes. If your state levies a personal income tax, your sports betting winnings are generally taxable as ordinary income. Nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) do not have a state income tax, so residents of those states only owe federal taxes. Every other state with legal sports betting treats gambling winnings as taxable income subject to state tax.

What if I live in a state with no income tax?

If you reside in a no-income-tax state like Florida, Nevada, Tennessee, or Wyoming, you do not owe state taxes on your sports betting winnings. You still owe federal income tax on all gambling winnings, which is taxed at your ordinary income rate (10 to 37 percent depending on your total income). Living in a no-income-tax state can save you thousands of dollars per year compared to high-tax states like New York or New Jersey.

Do I owe taxes to the state where I placed the bet or where I live?

Generally, you owe taxes to your home state on all income, including gambling winnings earned in other states. Some states also tax nonresidents on income sourced within their borders. If both your home state and the state where you bet claim the right to tax, your home state typically provides a credit for taxes paid to the other state, preventing double taxation. In practice, the combined rate you pay equals the higher of the two state rates.

Can I deduct sports betting losses on my state taxes?

Many states follow the federal rules, which allow you to deduct gambling losses up to the amount of your winnings if you itemize deductions. However, some states do not allow this deduction or have modified rules. If you take the standard deduction instead of itemizing, you cannot deduct gambling losses at either the federal or state level. Check your specific state tax form instructions or consult a tax professional to confirm whether loss deductions are available in your state.

What happens if I bet in multiple states?

If you place bets in multiple states, your winnings may be subject to tax in each state where you bet (as nonresident income) and in your home state (as part of your total income). Most states provide credits for taxes paid to other states, so you generally pay the higher rate rather than both rates combined. Mobile betting apps use geolocation to determine which state you are in when you place a bet, which establishes the source state for tax purposes. Keep records of where you were when you placed significant winning bets.

How much are state taxes on sports betting winnings?

State tax rates on gambling winnings range from 0 percent (in no-income-tax states) to over 13 percent (in New York City when combining state and city taxes). Most states with legal sports betting charge between 3 and 7 percent. Your actual rate depends on your total taxable income and your state tax bracket. The state tax is in addition to your federal tax obligation, which ranges from 10 to 37 percent depending on income.

Do I need to file a state tax return just for sports betting winnings?

If you are already required to file a state tax return based on your regular income, your gambling winnings are simply included. If you live in a state with no income tax, no state filing is needed for gambling income. In some cases, nonresidents who win significant amounts in a state may need to file a nonresident return in that state, even if they do not normally file there. Check the filing threshold requirements for any state where you had substantial gambling winnings.