Gambling Tax Calculator and Guide 2025

How Gambling Winnings Are Taxed in the USA

The IRS treats all gambling winnings as taxable income, regardless of the game or platform. This includes but is not limited to:

• Lotteries and raffles – State lotteries, sweepstakes, charity raffles;
• Casino games – Slots, table games (blackjack, roulette, craps, baccarat);
• Poker – Both cash games and tournaments;
• Sports betting and horse racing – Traditional sportsbooks, pari-mutuel wagering, and daily fantasy sports;
• Online gambling – Internet poker, online casinos, and sports betting apps are taxed the same as in-person gambling.

What counts as gambling winnings:

• Cash winnings: From slot machines, poker, blackjack, horse racing, and sportsbooks;
• Non-cash prizes: Such as cars, trips, or electronics, taxed at their fair market value;
• Online vs. in-person gambling: Both are taxed the same way, with reporting requirements applying regardless of the source.

Generally speaking, if you win $600 or more in gambling winnings, the payer must issue you a Form W-2G. For winnings over $5,000, the payer may also be required to withhold 28% for federal income tax. If you don’t provide your Social Security number, the withholding rate can increase to 31%.

Federal Gambling Tax

The IRS requires a 24% withholding on certain gambling winnings that exceed thresholds. However, this is not the final tax liability – your actual rate depends on your total annual income.

When is tax automatically withheld?

Casinos and operators are legally required to issue a W-2G form and withhold federal tax when winnings meet or exceed specific thresholds:

• $600 or more from sports betting, horse racing, or other wagers and the payout is at least 300 times the wager
• $1,200 or more from slot machines or bingo
• $1,500 or more from keno (after wagers)
• $5,000 or more from poker tournaments.

Self-reporting requirement

Even if tax is not withheld at the source, you must report all gambling winnings as income on your tax return. Failure to do so can result in penalties or interest charges. Our gambling tax calculator helps you estimate your potential tax liability, by giving you a clear picture of what you might owe.

Required IRS Forms and Documentation

• Form W-2G – Issued by the payer if your winnings meet thresholds. A copy goes to you and to the IRS. Includes information about the Payer (operator), including their name, address, TIN number and contact information. The bigger portion of the document requires information about you (the winner), including reportable winnings, date won, type of wager, as well as your personal and contact information.
• Form 1040 – Used to file an annual income tax return.
• Form 1040 Schedule 1 - Used to report “Additional Income,” including gambling winnings, prize or award money.
• Form 1040-SR – Uses the same schedules and instructions as From 1040, but refers to taxpayers who are 65 years of age or older.
• Schedule A (Itemized Deductions) – This form should be attached to Form 1040 or 1040-SR. Using Schedule A (Itemized Deductions), you can deduct gambling losses, but only up to the amount of winnings reported on your return. To do so, complete the “Other Itemized Deductions” section (line 16) and ensure you have kept proper records of both your winnings and losses.
• Records required – Keep tickets, receipts, statements, or logs to substantiate both winnings and losses.

U.S. States by Income Tax Type – Progressive, Flat or No Tax

The table below classifies every U.S. state into one of three categories: states with progressive income tax, states with flat income tax, and states with no income tax.

*Notes: Massachusetts imposes a 5% base tax plus a 4% surtax over $1M, so it could be treated as progressive as well. Washington has no wage income tax but does levy a capital-gains tax on certain investment gains; gambling winnings aren’t subject to a state income tax.

The federal rules apply to all, but the majority of the states introduce an additional layer. Most states tax gambling income just like wages or income from investments. Some states keep it simple and impose a single rate that is flat, like Michigan for example, others employ a progressive system whose rate increases the higher your income is, like New Jersey.

There are outliers too: states such as Nevada, Texas and Florida do not tax income at any level, so our gambling winnings tax calculator applies only federal tax and evades state-level tax there. At the other extreme, jurisdictions that tax progressively – New York or New Jersey – are taxing those winnings just like the rest of their income.

In a few jurisdictions, cities or counties add their own layer of taxation. For instance, New York City and Yonkers impose an additional personal income tax that includes gambling winnings.

Gambling Loss Deductions

Taxpayers may deduct gambling losses – but only up to the amount of gambling winnings for that year. Losses in excess of winnings cannot be deducted.

• Critical limitation: You cannot claim a net loss from gambling.
• Standard vs. itemized deductions: Loss deductions require filing Schedule A and itemizing, rather than taking the standard deduction.
• Record-keeping: Keep detailed logs and supporting documents (tickets, receipts, win/loss statements, bank withdrawals). IRS expects: date, type of gambling, location, amounts won/lost. Win/loss statements from casinos alone may not be sufficient without your own records.
• Professional vs. casual gamblers: Even professional gamblers cannot deduct more than they win, though they may claim additional business expenses.
• State differences: Some states follow federal rules, while others disallow or limit gambling loss deductions.

Resident vs. Non-Resident Filing Rules

Residents must report all gambling winnings, regardless of where they were earned. Non-residents are typically taxed only on US-sourced gambling winnings but must comply with IRS rules and possibly file Form 1040-NR.

• Non-Resident & International Players: Non-US citizens may face a flat 30% withholding unless a tax treaty applies. Not all gambling winnings for nonresidents are subject to withholding (e.g., certain slot/blackjack/poker winnings may not trigger withholding, though they’re taxable). W-2G is issued depending on thresholds (e.g., $1,200 for slots, $1,500 for keno, $5,000 for poker tournaments).
• Professional Gamblers: Must report winnings and losses on Schedule C, subject to self-employment tax.
• Group Wins & Lottery Pools: Each participant must report their share of winnings individually (Form 5754 is used when claiming).
• Local Taxes: Certain cities (e.g., New York City, Yonkers) impose additional gambling-related taxes.

References

• IRS Publication 525 – Taxable and Nontaxable Income (Covers gambling winnings and how they’re reported)
• IRS Publication 529 – Miscellaneous Deductions (Explains gambling loss deductions and itemizing rules)
• IRS Publication 505 – Tax Withholding and Estimated Tax (Details on federal withholding requirements and estimated tax obligations)
• IRS Publication 519 – U.S. Tax Guide for Aliens (Rules for nonresident aliens, including gambling income and treaty provisions)
• IRS Form W-2G Instructions (Reporting rules for gambling winnings and withholdings)
• IRS Form 1040 Schedule A Instructions (How to claim gambling losses when itemizing)
• IRS Form 1040-ES – Estimated Tax for Individuals (2025)
• IRS Form 1040-NR Instructions (For nonresidents with U.S. gambling winnings).