Sports betting is a form of gambling where you wager money on the outcome of a sporting event, such as which team will win a game or how a player will perform.
Sports betting winnings are taxed like ordinary income by the IRS. Whether you place a bet online, through a sportsbook app, or at a casino, any money you win generally needs to be reported on your federal tax return. Even if you don’t receive a tax form for your winnings, you’re still responsible for reporting them when you file.
How does the IRS tax sports betting winnings?
The IRS considers sports betting winnings taxable income. They are generally included in your total taxable income for the year and taxed at your regular federal income tax rate.
If your winnings exceed $5,000, some of that payout should be withheld for taxes. Typically, betting establishments withhold a standard 24%.
Gambling losses may be deductible if you itemize deductions, but they must be reported separately and generally can’t be more than your gambling winnings.
How is sports betting taxed on your state return?
As of 2026, sports betting is legal in some form in 39 states and Washington, D.C., but the rules do vary by state. Some states allow online betting through apps, while others only allow sports betting at licensed casinos or sportsbooks.
The way you report your winnings for tax purposes can depend on where you live and where you placed the wager. States may have different rules for taxing gambling winnings, withholding tax, filing nonresident returns, and deducting gambling losses. New York, for example, taxes gambling winnings as part of your state taxable income.
Check the rules for your state of residence and any state where you placed a winning wager.
Will I receive Form W-2G for sports betting winnings?
You might receive Form W-2G for your winnings on your sports bet. Form W-2G is a tax form used to report certain gambling winnings and any federal income tax withheld from those winnings. If your sports betting winnings meet specific IRS reporting thresholds, the sportsbook may send you a Form W-2G and file a copy with the IRS.
For sports wagers paid in 2026, you may receive Form W-2G when your winnings are at least $2,000 and at least 300 times the amount of your wager.
If you don’t get a Form W-2G, it doesn’t mean your winnings are tax-free. You’re still required to report all gambling income on your federal tax return, whether or not you receive a tax form.
Can I deduct sports betting losses?
Yes, sports betting losses may be deductible, but only if you itemize deductions on your tax return.
For tax years through 2025: If you itemize, you can generally deduct gambling losses up to the amount of your gambling winnings.
Beginning in 2026: The deduction is limited to 90% of your wagering losses and cannot be more than your betting gains for the year.
To claim the deduction, you’ll report your losses as an itemized deduction on Schedule A. It’s important to report your winnings and losses separately. Don’t simply subtract your losses from your winnings and report the difference.
You’ll also need to keep your own records. Sportsbooks may provide account statements that show your betting activity, but it’s your responsibility to maintain documentation of your wagers, winnings, and losses. Keeping detailed records throughout the year can help support your deduction if the IRS ever asks for proof.
Do sports betting taxes vary by league?
The IRS taxes sports betting winnings the same way regardless of the sport or league involved. Whether your winnings come from the NFL, NBA, MLB, college sports, fantasy sports, or an international sporting event, they’re typically treated as gambling income and must be reported on your tax return.
No matter which sport or league you bet on, the key tax rules remain the same: report all gambling winnings, keep records of your wagers and losses, and hold on to any tax forms you receive related to your activities.
How to report sports betting winnings and losses on your tax return
To report your winnings, you’ll typically need records showing the amount you won, the date of the wager, and the sportsbook or gambling establishment involved. A Form W-2G can help, but you should also keep your own records throughout the year.
When you’re reporting your winnings, you shouldn’t reduce your taxable winnings by the amount of your wager. In other words, if you place a $50 bet and win $250, you’ll need to report the full $250 as income – not just the $200 profit.
If you plan to deduct betting losses, you’ll need to itemize your deductions on Schedule A and keep a record of your losses (for example: betting statements, receipts, tickets, etc.). You aren’t required to report losses if you’re not claiming a deduction, but keeping accurate records can be helpful if you decide to itemize. Sports betting losses must be reported separately from winnings and generally can’t be more than the amount of gambling income you report.
The easiest way to avoid surprises at tax time is to keep detailed records of all your sports betting activity throughout the year, including winnings, losses, and any tax forms you receive.
