how are casino winnings taxed
How Are Casino Winnings Taxed? A Complete Guide
Understanding the Basics of Casino Taxation
Taxed are casino winnings in the U.S.? Yes, they are. The IRS treats gambling income as taxable, regardless of the source—whether from slots, poker, sports betting, or lottery wins.
Reported must be all winnings on your federal tax return. Failing to do so can result in penalties, even if you didn’t receive a tax form from the casino.
When Do Casinos Issue Tax Forms?
Issued are tax forms by casinos for certain winnings. The most common is Form W-2G, which is given for:
- Slot machine winnings of $1,200 or more
- Bingo, keno, or slot machine winnings of $1,500 or more
- Poker tournament winnings of $5,000 or more
- Horse racing winnings of $600 or more (with a 300-1 odds requirement)
Not issued are forms for smaller wins, but reported must they still be on your tax return.
How Are Different Types of Winnings Taxed?
Taxed differently are various gambling winnings. Here’s a breakdown:
| Type of Winnings | Tax Rate | Deductions Allowed |
|---|---|---|
| Casino games (slots, blackjack, etc.) | Up to 37% (federal tax bracket) | Yes (losses can offset winnings) |
| Poker tournaments | Up to 37% | Yes (expenses like buy-ins, travel) |
| Sports betting | Up to 37% | No (only losses from same activity) |
| Lottery & sweepstakes | Up to 37% | No (unless structured as an annuity) |
Deducted from winnings are federal taxes in some cases, but state taxes may apply separately.
Can You Deduct Gambling Losses?
Deducted can be gambling losses, but only up to the amount of winnings. For example, if you won $5,000 but lost $6,000, you can only deduct $5,000.
Kept must be detailed records, including:
- Receipts, tickets, or statements
- Bank or credit card records
- A diary of gambling activity (dates, types, amounts)
Claimed cannot be losses without proper documentation.
State Taxes on Casino Winnings
Taxed are winnings at the state level in some states. For example:
- California: No state tax on gambling winnings (but federal tax applies)
- New York: Taxed are winnings at the state rate (up to 8.82%)
- Nevada: No state tax on winnings (but casinos may withhold for non-residents)
Checked should be your state’s tax laws, as rules vary widely.
FAQ: Common Questions About Casino Taxes
Do I have to pay taxes if I lose more than I win?
No, you do not. Only taxed are net winnings (winnings minus losses).
What if I win a non-cash prize (like a car or trip)?
Taxed is the fair market value of the prize. The casino will issue a W-2G form.
Can I avoid taxes by not cashing out my winnings?
No, you must report all winnings, even if left in the casino account.
What happens if I don’t report my winnings?
Faced could be penalties, interest, and even audits by the IRS.
Are online casino winnings taxed the same way?
Yes, the IRS treats online and in-person winnings the same.