Gambling and Taxes in the US: What Every Player Needs to Know

Nobody sits down at a blackjack table thinking about the IRS. That is entirely understandable. The IRS is not known for its entertainment value, and the last thing most people want when they hit a jackpot is to immediately start thinking about how much of it they have to hand back. Unfortunately, the IRS does not share that sentiment.

The United States taxes gambling winnings. All of them. It does not matter whether you won $500 on a slot machine in Vegas, cleaned up at a poker tournament in Atlantic City, or had a spectacular weekend on the sports betting apps. If money came in, the federal government considers it income, and income gets taxed. Most states take a cut too.

The good news is that the rules, while not exactly exciting, are not as complicated as they might seem once you break them down. Knowing how they work means you will not be caught off guard at tax time, you will know what records to keep, and you will understand exactly what deductions you are entitled to claim. 

For international visitors, there is a whole separate layer of rules around withholding and refunds that is worth understanding before your next trip stateside. We’ll get into that.

This guide covers everything a recreational gambler needs to know about US gambling taxes: what gets reported, when it gets reported, what you can deduct, and how state taxes fit into the picture. It also covers some significant rule changes introduced in 2025 that take effect from January 1, 2026, which every regular gambler should be aware of.

One important note before we go any further: this guide is intended as general information only. Tax laws are complex, individual circumstances vary, and nothing here constitutes professional tax advice. If you have specific questions about your own situation, a qualified tax professional is always your best resource.

Let's start with the foundational principle, because it catches a surprising number of people off guard. Also, I am sorry in advance, but this bit is going to be dry. I am trying to make this as light and interesting as I can, I promise. But it’s tax information, and I am but human. Anyway…

In the eyes of the IRS, gambling winnings are ordinary income, exactly the same as wages from a job or interest from a savings account. There is no minimum threshold below which winnings become tax-free. There is no "it was just a small win" exemption. Every dollar you win gambling is, in theory, a taxable dollar.

That applies across the board. Casino slots, table games, poker tournaments, sports betting, horse racing, keno, bingo, lottery tickets, even raffles. All of it counts. If you win a car in a casino promotion, the fair market value of that car is taxable income. Win a vacation package? Same deal. The IRS is thorough like that.

It is also worth clearing up a common misconception right away: the fact that a casino did not give you a tax form does not mean your winnings are not taxable. The reporting forms that casinos issue (more on those in the next section) exist to help the IRS track larger payouts, but they do not define what is and is not taxable. You are responsible for reporting all gambling winnings on your federal tax return regardless of whether any paperwork was generated at the time of the win.

Gambling income is reported on Schedule 1 of Form 1040, under "Other Income." It gets added to your total income for the year and taxed at whatever federal income tax rate applies to your overall earnings. 

The federal withholding rate of 24% applies to certain larger payouts at the time they are made, meaning the casino holds back that percentage before handing over your winnings. But 24% is not necessarily your final tax rate. Depending on your total income for the year, you could owe more when you file, or you might get some of it back. The withholding is essentially a down payment on whatever you ultimately owe.

When you win above certain amounts at a casino or other gambling establishment, the payer is required by law to issue you a Form W-2G, entitled Certain Gambling Winnings. Think of it as the casino's way of telling the IRS that money changed hands. You get a copy, the IRS gets a copy, and everyone is on the same page.

The thresholds that trigger a W-2G vary depending on the type of game, which can be a little confusing. Here is how they break down as of 2026:

One important note for anyone filing their 2025 tax return: the slots and bingo threshold that applied during 2025 was $1,200, not $2,000. The updated figure took effect on January 1, 2026 as part of the One Big Beautiful Bill Act, signed into law on July 4, 2025. It was the first change to that threshold since 1977. If your win happened before January 1, 2026, the old figure is the one that applies to your filing.

A couple of things in that table are worth dwelling on. First, notice that table games like blackjack, craps, and roulette do not trigger a W-2G at all, regardless of how much you win. That does not mean those winnings are tax-free, they absolutely are not, it just means the casino has no formal obligation to report them to the IRS on your behalf. The responsibility for reporting falls entirely on you.

Second, the 300 times the wager rule for sports betting catches a lot of people out. It means that a $600 win on a $100 bet, which is only six times your stake, does not trigger a W-2G even though it clears the dollar threshold, because it falls well short of the 300x multiplier. On the other hand, a $620 win on a $2 bet would trigger one because it clears both hurdles. For most standard sports bets, the 300x rule means W-2G forms are actually pretty rare even on decent-sized wins.

When a W-2G is issued, the casino may also withhold federal income tax at a flat rate of 24% before paying out your winnings. This is known as regular gambling withholding, and it applies when net winnings exceed $5,000 on lotteries, sweepstakes, and certain other qualifying games. 

For US citizens and residents, slots, bingo, and keno are exempt from automatic withholding regardless of the amount — you receive the full payout and settle up at filing time. Non-resident aliens face different rules entirely, which we cover in full in the international visitors section.

Reporting gambling winnings on your federal tax return is more straightforward than most people expect. All gambling income goes on Schedule 1 of Form 1040, on the line for "Other Income." It gets added to your total income for the year and taxed accordingly. That is it.

If you received a W-2G, the amount shown in Box 1 is the figure you report as income. Simple enough. Box 4 is a separate matter. It shows how much federal tax was already withheld from your payout at the time you received it. That withheld amount gets credited against your total tax bill when you file your return. Think of it as a prepayment. Depending on your overall income for the year, it might cover everything you owe on those winnings, leave you with a small balance due, or even result in a partial refund.

If you did not receive a W-2G, your winnings are still fully taxable and still need to be reported. This catches a lot of people out. The absence of a form does not create an absence of obligation. You are responsible for tracking your own winnings throughout the year and reporting the total accurately, whether or not a casino ever handed you a piece of paper.

Most online sportsbooks and casino platforms provide year-end statements showing your total activity for the year, which can be a useful starting point. For in-person gambling, your player's club card generates a win/loss statement that most casinos will provide on request. Neither of these documents replaces proper record-keeping, but both are helpful when it comes to pulling your numbers together at tax time.

If federal tax was already withheld from your winnings at the time of payout, do not forget to account for it. That money has already gone to the IRS on your behalf. It should not be counted twice, no matter how much the IRS might want you to. 

Here is the part that most gamblers are very interested in hearing about. Yes, you can deduct your gambling losses. Before you get too excited, however, there are some fairly significant strings attached.

If you itemize your deductions on your federal tax return, you can deduct gambling losses up to the total amount of gambling winnings you reported for the year. That is a genuinely useful provision, and one that a lot of recreational gamblers do not take full advantage of simply because they do not know it exists. 

Let’s break that down a little even more. When you file your US tax return, you have two options for deductions. You can take the standard deduction (a flat amount the IRS gives everyone automatically, no receipts required) or you can itemize, listing your actual deductible expenses individually. Most Americans take the standard deduction because it is simpler and usually larger. 

The problem for gamblers is that loss deductions only exist in the itemizing world. Take the standard deduction and your winnings still count as income. Your losses, as far as the IRS is concerned, never happened.

Here is how it all plays out in practice:

A few important rules sit behind that table and are worth spelling out clearly.

You can only deduct losses up to the amount of your winnings. If you won $5,000 and lost $9,000, you can deduct $5,000, not $9,000. The remaining $4,000 in losses simply disappears into the void, undeductible and unlamented by the IRS, which has never been particularly sympathetic to the concept of a bad run.

You can also only claim the deduction if you itemize. The standard deduction, which the vast majority of Americans take because it is simpler and often larger, does not allow for gambling loss deductions. If you take the standard deduction, your losses are not deductible, full stop. Given that the standard deduction for 2025 is $15,000 for single filers and $30,000 for married couples filing jointly, most casual gamblers will find that itemizing does not make financial sense unless they have significant other deductions to stack alongside their gambling losses.

Important: You cannot net your winnings and losses before reporting. This is one of the most common mistakes recreational gamblers make. You cannot simply add up everything you won, subtract everything you lost, and report the difference as income. The IRS requires you to report your total winnings in full and then claim your losses separately as an itemized deduction. The practical consequence is that even if you broke even on the year, you could still have a tax bill if you are not itemizing.

Now for the big new development that every regular gambler needs to know about. 

From January 1, 2026, the One Big Beautiful Bill Act introduces a 90% cap on gambling loss deductions. Previously, a break-even gambler could deduct 100% of losses up to their winnings and owe nothing. From 2026 onward, only 90% of losses are deductible, meaning 10% is permanently off the table regardless of your circumstances. 

Tax professionals have taken to calling the resulting liability "phantom income", an appropriately haunting term for money the IRS wants a slice of despite the fact that it no longer exists in your wallet. Here is what that looks like in real numbers:

And yes, you are reading that right. If you break even now in a gambling year, you owe taxes on money you never received. 

If there is one piece of advice in this entire guide that will make the biggest practical difference to your tax situation, it is this: keep records. Detailed, consistent, contemporaneous records of every gambling session. 

Not because it is fun (it is not, and if you are the kind of person who thinks it is we may not get along) but because without them, the IRS can disallow your loss deductions entirely, leaving you paying tax on your gross winnings with nothing to offset them.

The IRS expects gamblers to maintain a gambling diary or log that captures, for each session, the date and type of gambling, the name and location of the casino or establishment, the amount won or lost, and the names of anyone else present if relevant. You should also hold onto supporting documentation wherever possible, such as W-2G forms, betting app statements, casino win/loss statements, ATM receipts, bank records, and anything else that corroborates your log.

A few practical tips worth knowing:

• Most casinos will provide a win/loss statement at the end of the year if you have been playing on a rewards card, which gives you a useful starting point
• Online sportsbooks and casino platforms typically provide year-end tax summaries in your account
• A simple spreadsheet is perfectly adequate as a gambling log, the IRS does not require a specific format
• Your log needs to be kept at the time, not reconstructed from memory months later. The IRS has seen every version of the "I am pretty sure I lost about that much" argument and is not impressed by any of them
• Neither a casino win/loss statement nor a sportsbook summary replaces your own records, but both are valuable supporting evidence if you are ever questioned

Federal tax is only part of the story. Most states also tax gambling winnings, and the rules vary considerably depending on where you live and where you won. Some states are generous. Others are decidedly not.

The simplest situation is if you live in one of the nine states with no personal income tax. In those states, gambling winnings are not taxed at the state level at all. That means you only have the federal bill to worry about. 

Those states are:

• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

It is probably not a coincidence that Nevada, home to Las Vegas, sits on that list. Ah Nevada. What would we do without you?

Most other states treat gambling winnings as ordinary income and tax them at whatever rate applies to your total earnings for the year. A handful of states are notably punishing about it, taxing gross winnings with no mechanism to offset losses at all. That means that even if you lost money overall, you still owe state tax on every dollar you won. Here is a snapshot of how selected states handle it:

A couple of things stand out in that table. New Jersey is genuinely the most gambler-friendly income tax state in the country. It allows full netting of wins and losses without requiring you to itemize, which is a significant advantage over the federal system. 

California, on the other hand, combines the highest state income tax rate in the US with a gambling winnings rule that offers no special treatment whatsoever.

One other wrinkle worth knowing: if you win in a state you do not live in, you may owe tax in both the state where you won and your home state. Most states offer a credit for taxes paid to other states to prevent pure double taxation, but the mechanics can get complicated. 

If you are a New York resident who hits a jackpot in New Jersey, for example, it is worth understanding how both states treat the win before you file.

The rapid expansion of legal sports betting across the US (now available in 38 states and Washington DC) has brought a whole new wave of recreational gamblers into territory they have never had to think about from a tax perspective before. 

The rules, reassuringly, are exactly the same as for any other form of gambling. Winnings are taxable income, losses are potentially deductible if you itemize, and the same reporting obligations apply.

A few specifics worth knowing for online and sports betting players:

• All winnings from online sportsbooks and casino platforms are taxable regardless of whether they are paid out or left sitting in your account balance. The moment you win, it is income.
• Most major platforms (DraftKings, FanDuel, BetMGM, Caesars, and others) provide year-end tax documents and account summaries that break down your total activity. Find these in your account settings before tax season rather than scrambling for them in April.
• The W-2G threshold for sports betting is $600 or more, but only if the payout is also at least 300 times the wager. As we covered earlier, this means most sports bets never trigger a form even on reasonably sized wins. That does not change your reporting obligation one bit.
• Some states tax online and retail gambling winnings at different rates. Always check your specific state rules rather than assuming the federal framework tells the whole story.

If you are visiting the United States from another country and you hit a significant win at a casino, the tax rules that apply to you are quite different from those that apply to American players. This section is particularly relevant for the millions of international visitors who travel to Las Vegas, Atlantic City, and other US gambling destinations every year, and who are often completely unaware that the IRS has an interest in their good fortune.

The starting point is this: as a non-resident alien, any gambling winnings you receive in the United States are subject to a flat 30% federal withholding tax. The casino takes 30% off the top before handing over your payout, reports the transaction to the IRS on a Form 1042-S rather than the W-2G used for domestic players, and you walk away with 70% of what you won. 

That has happened to me before. It was neither fun nor ideal, but it wasn’t the end of the story either. Because, depending on where you are from, you, like me, may be entitled to get all or most of that 30% back.

There is also an important game-specific exemption worth knowing about. Non-resident aliens are completely exempt from the 30% withholding on winnings from blackjack, baccarat, craps, roulette, and big-6 wheel. No withholding, no form, no paperwork. 

Walk up to a roulette table in Vegas, win big, and the casino hands over the full amount. Hit a slot machine jackpot under the same roof on the same day, and 30% disappears before you see a cent of it. It is a quirk of US tax law that catches a lot of international visitors by surprise, and one that is worth factoring into your game selection if you are visiting from abroad.

The 30% Withholding: Can You Get It Back?

Whether you can reclaim that 30% depends primarily on whether your home country has a tax treaty with the United States that covers gambling income. A surprising number of countries do, including many of the most common origins of US casino visitors. 

The following countries are among those whose residents can claim a full exemption or refund on US gambling winnings:

Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Poland, Portugal, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, the United Kingdom.

Notable countries that do not have a qualifying treaty exemption for gambling winnings include:

Canada, Australia, New Zealand, China, India, Brazil, Mexico. 

Residents of those countries generally cannot reclaim the 30% withholding, although they may be able to offset some of it with documented gambling losses incurred during the same US trip.

It is also worth noting that having a treaty exemption does not mean the casino automatically skips the withholding. In most cases you need to proactively present the right documentation at the time of the win to prevent withholding from being applied in the first place. That documentation is a Form W-8BEN, and it requires a US taxpayer identification number. That brings us to the all-important ITIN, which is a potentially incredibly valuable piece of paper to have when you travel to the US to gamble. 

What Is an ITIN and Do You Need One?

ITIN stands for Individual Taxpayer Identification Number. It is a tax processing number issued by the IRS to individuals who are not eligible for a Social Security Number but have a US tax obligation or need to file a US tax return. For international casino visitors, it is the key that unlocks treaty benefits and makes it possible to reclaim withheld tax.

If you are from a treaty country and you want to either prevent 30% withholding at the point of a win or file a US tax return to claim a refund afterward, you will need an ITIN. Without one, even residents of fully exempt treaty countries may find themselves having tax withheld and facing a bureaucratic obstacle course to get it back.

There are two ways to obtain an ITIN as a gambling visitor:

The first is through the casino at the time of the win. Many larger casinos, particularly in Las Vegas, have gaming officials who are authorized by the IRS to act as ITIN Acceptance Agents. If you hit a reportable jackpot and do not already have an ITIN, the casino can apply for one on your behalf on an expedited basis, which may allow them to pay out your full winnings without withholding. This is only possible on business days when the IRS is processing applications, so timing matters.

I would not recommend relying on it, though. I have personal experience of that. My partner won a handpay at Excalibur, which is an MGM property, and they did all of his paperwork for him, paid him the full amount, and a few weeks later an ITIN arrived in the UK post. Lovely. 

However, I won one at a Downtown Las Vegas property, they withheld 30%, and sent me on my way to sort it all out myself, which was a bit of a faff. Which leads us too… 

The second way is by filing a US non-resident tax return after the fact. If tax was withheld from your winnings and you are entitled to a refund under a treaty, you file Form 1040-NR along with a Form W-7 ITIN application and your Form 1042-S from the casino. The ITIN is issued and the refund processed together, typically within six to eleven weeks, though peak filing season can extend that timeline.

The process for obtaining an ITIN in summary:

• Complete Form W-7, Application for IRS Individual Taxpayer Identification Number
• Provide proof of identity and foreign status: a valid passport is the most straightforward document
• Attach your Form 1042-S or other evidence of US gambling income
• Submit through a casino Acceptance Agent at the time of the win, or mail together with your Form 1040-NR after the tax year ends
• Allow six to eleven weeks for processing

Once you have an ITIN it does not expire through use, though ITINs that have not been used on a federal return for three consecutive years are deactivated and would need to be renewed before filing again.

What Happens If You Do Not Have an ITIN and Do Not Get One?

If you hit a taxable jackpot as a non-resident alien, do not have an ITIN, and do not provide one to the casino, the casino is required to withhold 30% regardless of your treaty status. That money sits with the IRS. 

You are not legally obligated to file a US return to claim it back, but if you are from a treaty country and you do not, you are simply leaving that money on the table. Given that a 30% withholding on a $10,000 jackpot represents $3,000, it is usually well worth the paperwork.

Legal Disclaimer

The information contained in this guide is intended for general informational purposes only and does not constitute legal, financial, or tax advice. While every effort has been made to ensure accuracy at the time of writing, tax laws change frequently and individual circumstances vary considerably. The rules described in this guide reflect US federal and state tax law as understood in April 2026, including changes introduced by the One Big Beautiful Bill Act signed into law on July 4, 2025.

Nothing in this guide should be relied upon as a substitute for professional tax advice tailored to your specific situation. If you have questions about your own tax obligations in relation to gambling winnings — whether as a US citizen, resident, or international visitor — you should consult a qualified tax professional or certified public accountant who is familiar with the relevant federal and state rules that apply to you.

International visitors should be aware that tax treaty provisions, ITIN requirements, and refund processes involve a degree of complexity that is best navigated with professional assistance, particularly for larger sums. The list of treaty countries included in this guide is provided as general guidance only and should be verified against current IRS publications before any action is taken.