Online Casino & Gambling Taxes – Overview of How Winnings Are Taxed in the US

In most cases, all income must be reported to the IRS in the United States. That includes gambling winnings, whether won online or in person. We recommend that gamblers keep a careful log of how much they gamble away and how much they win to accurately report the figures come tax day. The last thing you want to do is gamble on whether or not the IRS will come after you.

DISCLAIMER: No one on the Bonus.com team is a tax professional. Instead, we are gambling experts who have had to pay tax on casino winnings ourselves. This is a general guide to get you up to speed, but gambling taxes vary by state, income level, and several other factors. Consult with a certified accountant or other tax preparation professional to ensure compliance with tax law.

Table of Contents

• Tax Documents to Know
• State-By-State Info
• Tips on Gambling Taxes

Gambling Tax Documents

At legal US online casinos, gambling winnings of $600 or more will trigger an automatic W2-G or 1099 form to help a player report the winnings to the IRS. However, all gambling winnings must be reported, whether they have triggered an IRS form or not.

The two most common tax documents you’ll come across when reporting gambling winnings are the W2-G and the Form 1099. In most cases, you’ll receive a W2-G; however, some operators do issue 1099 forms in certain situations.

Form W2-G For Big Wins

If you hit a big win, most gambling establishments will automatically give you a W2-G tax form. The threshold for receiving a Form W2-G varies based on the type of gambling and the amount you won. Here are the thresholds:

• Sports betting and fantasy sports (DFS included): $600
• Bingo and slot machines: $1,200
• Keno: $1,500
• Poker tournaments: $5,000

Table games (blackjack, craps, sic bo, baccarat, etc.) are exempt from Form W2-G rules. You still need to report your winnings, but you won’t receive a special form.

Lottery winnings are absent from this list because the tax codes surrounding Powerball or other big lotto prizes can get more complex. If you win big on a lottery game, it’s best to get in touch with an accountant or tax service to assist you.

Online Sports Betting Wins: Form 1099

Sports bettors may receive the IRS Form 1099. When you win more than $600 on a sportsbook site, the operator is required to send you a Form 1099-MISC. If you cash out those winnings with PayPal, you’ll get a Form 1099-K instead. Either way, this form helps you easily include your winnings with your yearly tax return. While W2-G forms are most commonly issued for gambling winnings, 1099 forms may also cover tax requirements as they are essentially utilized for “miscellaneous income.”

Once again, remember that you’re still obligated to report your winnings even if you don’t receive a form from the sportsbook where you won money. They are only required to send you the form if you win more than $600. Winnings below that are still taxable; you just need to report them on your own.

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