How Are Gambling Winnings Taxed?

Income and Investments

Most people don’t think about taxes on their way to the casino. But what might seem like nothing more than a fun night in Las Vegas actually carries significant tax consequences if you win. As is often the case, the federal and state governments single out casino winnings for unique taxes of their own. Failure to properly report your haul can result in serious penalties and headaches you just don’t want.

Follow these rules to stay on the safe side:

How Much You Win Matters


Gamblers are lucky in that casino taxes are not progressive like income taxes are. That is, you will owe the same percentage to the IRS on a $100,000 jackpot as a $10,000 one. Yet it’s important to know the thresholds that require reporting. As explains, winnings in the following amounts must be reported:

  • $600 or more at a horse track (if that is 300 times your bet)
  • $1,200 or more at a slow machine or bingo game
  • $1,500 or more in keno winnings
  • $5,000 or more in poker tournament winnings
All of these require giving the payer your Social Security number, as well as filling out IRS Form W2-G to report the full amount won. In most cases, the casino will take 25 percent off your winnings for the IRS before even paying you. Don’t get any crafty ideas about cutting Uncle Sam out of the transaction, either. According to Bankrate, this entitles the casino to withhold up to 28 percent of your winnings.

Games exempt From Form W2-G

Not all gambling winnings in the amounts above are subject to IRS Form W2-G. According to
“W2-Gs are not required for winnings from table games such as blackjack, craps, pai gow, baccarat, and roulette, regardless of the amount.”
Note that this does not mean you are exempt from paying taxes or reporting the winnings. Any and all gambling winnings must be reported to the IRS (discussed in more detail below). It only means that you do not have to fill out Form W2-G for these particular table-based games. No reason is given; that is simply the decision the IRS made.

Reporting Smaller Winnings


Even if you do not win as much as the amounts above, you are still legally obligated to report. This is done on Line 21 (“Other Income”) of Form 1040. This is also where you would report any awards or prize money you won during the year in question. Yes, even if you only win $10 you still technically have to report it (even if the casino didn’t). Gambling income plus your job income (and any other income) equals your total income.
Fortunately, you do not necessarily have to pay taxes on all your winnings. Instead, if you itemize, you can offset taxes owed on your winnings by reporting any losses you incurred as well. This would be done on Line 28 (“Other Miscellaneous Deductions”) on your Schedule A. You are allowed to claim as much as the total amount won that appears on 1040, which would eliminate your taxable gambling income. Just be sure any deductions taken this way (in combination with other itemizations) are higher than the standard amount. Otherwise it would make more sense not to itemize, even if it meant foregoing your gambling loss deductions.

What if You Win the Money at an Indian casino?


Gamblers often inquire about taxes on money won at an Indian casino. Some assume that because Indian reservations have unique tax arrangements with the federal government, this somehow must extend to gamblers on their property. Sadly, that is not so. The IRS does not care if you won the money on Indian land, the Las Vegas strip, or anywhere in between.
If the casino hands you a W2-6 or 1099, the IRS got one too. Technically, this applies even at an illegal gambling hideout in someone’s basement. You are legally obligated to report income from illegal activities as taxable income. While we doubt any of our readers are deriving illegal gambling profits, it does illustrate how pervasive and all-encompassing gambling taxes are.

What About State Taxes?


You didn’t think you were getting off that easily, did you? In addition to federal taxes payable to the IRS, many state governments tax gambling income as well. Unfortunately, states have their own unique formulas and rules for gambling income. Some levy no gambling taxes at all. Others charge a flat percentage, while still others ramp up the percentage owed depending on how much you won.
When in doubt, refer to your own state’s policies before gambling.

Comments (397) Leave your comment

  1. Hi I live in no I won 25000 on a scratcher in ca they sent me a check after withholding 6250 in taxes I earn about 21000 a year I am head of household with 2 dependent will I receive money back or will be paying back

  2. My grandmother won 5000 dollars this year! and then won another $5000 today will she have to pay taxes on that $5000 she won today? Jjoey

  3. I am keeping track of poker table cash winnings at a casino in another state north of here. I live in Kentucky. I am currently up $1600 since I started honestly attempting to gain additional income this way. My main source of income is approx $67k/yr as a single parent of two kids.

    The casino does not report any of my winnings and I do not put any of these winnings in my bank so should I claim these? Will the government even find these winnings? What are my chances of getting caught?

  4. I am 100 percent disabled and I get my monthly check from SS, on 10/31/2014, I went with family to the casino for my birthday and was playing slots on one machine I won $1,293.00 and on another machine $1,217.22 I am confused because I never have filed income tax while on disability due to that being my only income. So should I file a tax return because of these two wins? On the W-2G’s it says there was no income tax withheld on either one. Please help me to understand so that I don’t get in any trouble with the IRS…
    April Schultz

  5. I won a BINGO game on the Cash Ball. Are these two cash amounts to be combined on one W-2G or are they considered two separate payouts?

  6. James, I live in a community property state (Texas). Are gambling winnings community income or do they belong to the individual. I want ti file married, separately, and need to know where they go.

  7. Hi my name is Chris I don’t feel it fair tax system.As am a single parent and make around $70 k a yr I love to play the horse part time,I do play 4 days a week after work so I should be considered a professional gambler ,,I win about $25 k a year but give most of it back,I can’t get to the $9100 thresh hold so the always lump it on to my gross and tax me to the fullest.Even though I have win/loss showing am not making any money,Why cant we get a break and just call it even?

  8. I won $ 750 in a slot machine in NY. I claimed the money on my federal form. Do I also have to file a state form to claim this money. I never have to file a claim a state form because my pension is federal.

    1. Laura, the filing requirements at the NY Department of Revenue website include:

      You must file a New York State resident return if you meet any of
      the following conditions:
      • You have to file a federal return.
      • You did not have to file a federal return but your federal
      adjusted gross income for 2014 plus New York additions (see
      page 15) was more than $4,000 ($3,100 if you are single and
      can be claimed as a dependent on another taxpayer’s federal

      You did not tell us why you filed a Federal return. Unless you post more information, I can only guess you filed to get back your withholding on W2g for the $750 slot machine win, or that your pension is taxable on your Federal return.

      That said, am I right to say that your Federal AGI was $750?

      If yes, then I believe we can fit your situation into the NY criteria above:

      1) You were not required to file a Federal return. (You did only to get back your withholding on the slot win.)

      2) Your Federal AGI, plus NY additions, was less than $4000. (I believe you are all clear on the NY additions thing.)

      Answer: Probably Not Required To File – Too little information given by Laura

      Otherwise, if you were required to file a Federal return, then the NY instructions state that you have to file a NY State return.

      I believe a phone call to the NY Department of Revenue at
      will get you the definitive answer.

      New York Extended Income Tax Call Center hours through April 15 (518-457-5181):

      Monday – Friday: 8:30 a.m. – 7:30 p.m.

      Saturday: 8:30 a.m. – 3:00 p.m.

      April 15: 8:30 a.m. – 8:00 p.m.


    1. Dear Walter,

      Need to know your total taxable income in order to know at what rate the $2500 will be taxed.

      California has a maximum tax rate for single persons of 12.3% for 2014.

      The maximum Federal tax rate for single persons is 39.6 % for 2014.

  9. I am a resident of New York. I won and was paid out a prize of just over 10000 in a Pennsylvania casino. I received a 1099-MISC from the casino’s parent company in Nevada. How do I enter this correctly in TurboTax to calculate the correct state(s) taxes?

    1. Consider calling TurboTax support, and asking them how to file both a New York tax return and a Pennsylvania tax return.

      According to the PA Department of Revenue site, you are required to file a PA state return, because you had more than $33 in gross Pennsylvania-taxable income:

      “The following taxpayers must file a Pennsylvania personal income tax return-
      A. Every resident, part-year resident or nonresident individual earning,
      receiving and realizing more than $33 in gross Pennsylvania-taxable income for their taxable year beginning on or after Jan. 1, 2004 ($35 for taxable years beginning on or after Jan. 1, 1993 and ending Dec. 31, 2003), even if no tax is due (e.g., when an employee receives compensation where tax is withheld
      ). Refer to Pennsylvania Personal Income Tax (PA PIT) Guide, Chapter 7, Gross Compensation. ”

      Gambling or Lottery Winnings:
      Pennsylvania taxes
      nonresidents on gambling and lottery winnings by reason of a wager
      placed in this Commonwealth, the conduct of a game of chance or other gambling
      activity located in this Commonwealth or the redemption of a lottery prize from a lottery conducted in this Commonwealth, other than prizes of the Pennsylvania State Lottery.

      More from the PA Department of Revenue site:

      PA Schedule T
      Line 8 – Gambling and Lottery Winnings

      PA Law imposes its income tax on nonresidents on all gambling and lottery winnings from PA sources, except prizes from playing the Pennsylvania State Lottery.

      Gambling and lottery winnings include cash, the value of property (automobiles, jewelry, electronic devices, appliances, clothes, etc.), the value of the use of property (trips, vacations, airline tickets, cruise, etc.), and other items of value. You may only deduct your costs of gambling, wagering, betting, and playing lotteries from your winnings. You may not deduct any expenses (programs, tip sheets, travel, meals, lodging, etc.) that you incurred to take part in gambling, wagering, betting, and lottery activities.

      IMPORTANT: You may not deduct the cost of PA State Lottery tickets from other PA taxable gambling and lottery winnings.



  10. I am a resident of New York. I was paid out a prize of just over 10000 in a Pennsylvania casino. I received a 1099-MISC from the casino’s parent company in Nevada. How do I enter/pay pay the correct state taxes in TurboTax?

  11. Hello,
    I live in Maryland and I am a full time college student. I do not have a job but I won the lottery twice for $5000 totaling $10,000. How do I file that $10K if I am unemployed and don’t have no employment income to file. I don’t pay for college at all ,scholarships paid for my education.

    1. Hi Pam.

      First item to consider is whether your parents or someone else is claiming you as a dependent on their tax return. Then you should probably coordinate with them on filing your own tax return. This comes up often for full-time college students.

      You don’t want to claim your own personal exemption if someone is declaring you as a dependent on their tax return.

      I am going to assume that you are on your own. You should have one or two Form W2gs from the lottery, showing that you won a total of $10,000.

      The software will have a place to enter the W2g information. The total of $10,000 should then appear on Line 21 of your Federal Form 1040 as Gambling Winnings.

      Note that if this is your only source of taxable income for the year, then you shouldn’t owe any Federal income tax. However, you might owe Maryland state income tax. (I don’t have the time to look this up for you this week.)


      1. Thanks James for getting back to me and my parents do file me on their taxes, so I am not independent. We didn’t know that you can file income taxes if your only source of income was lottery winnings. So should I still file taxes or is there another way to report my lottery winnings. Thanks

      2. Pam, probably the main reason to file a tax return is to get back the withholding tax withheld by the lottery on your W2g….if there is withholding tax for your lottery wins. And Maryland may require you to file a state income tax return for these lottery winnings.

  12. How do gambling-related expenses factor in? For example, if I fly from NYC to Las Vegas and win $5,000 that I then report as additional income, would I also be able to deduct the travel & lodging expenses? That’s what I do for any of my business trips so this seems like it should be treated the same way.

    1. Hi LJ,
      Unfortunately you can not deduct travel & lodging expenses related to gambling. You may be able to deduct your losses up to your winnings if you itemize your tax deductions. TurboTax will guide you through deducting your losses.
      Thank you,
      Lisa Greene-Lewis

  13. I’m a tourist from Europe.Come to US once a year.I remember,about 12-14 years ago,i used to win $6000-$7000 a night from blackjack.(Not every night,relax…:-) ) Both, in Atlantic City and Vegas.Never had any problems cashing the chips out.Never heard about taxes on my winning money.Never filled up any forms.Maybe (don’t remember),the cashier asked me for my id,which was my passport,but i guess,that was just the standard procedure.But other than that – nada!……Now,i understand a lot of things changed since then…for bad……………My (and tons of other tourists,who play) questions are : 1.Do i need to have any AMERICAN id today,to be able to GET THE WINNING MONEY? (Nobody is gonna ask me any questions,while i’m putting my money on the blackjack table,i’m sure). 2.From the above article,i understood that blackjack is NOT considered taxable?Or i got it wrong? 3.If “yes”,from which winning amount (and up)? 4. Am i going to need to fill some forms in case of winning,despite my tourist status? (What about millions of japanese tourists,who adore casinos?What about our friends from South America,who barely have ANY status?Are they allowed to get their winning money?)…Or i can simply and calmly take the casinos out of my schedule today,in 2015..? Thanks for the response.

    1. 1) If you stay under the reporting threshold, then you should be able to cash out your Blackjack winnings at the window in Las Vegas or Atlantic City without having to fill out any paperwork or show ID. You can request to meet with the appropriate casino manager in order to have them explain the casino’s rules for withholding of taxes for their different games for US citizens, and foreign tourists. Note that the casino manager is not going to give you any tax advice, and is trained not to do so.

      2) In some countries, Blackjack winnings are not taxable. You didn’t tell us what country you are from. That is a key component of giving you a better answer. Your country may have a tax treaty with the United States that makes it easier for you to avoid withholding taxes on your winnings at a US casino.

      a. A US citizen must declare all Blackjack winnings on his tax return from each winning session of Blackjack.
      b. A foreign tourist may not owe US income tax on his US casino Blackjack winnings.

      3) This is our tax season. I don’t have time to look this up. Please ask the casino manager.

      4) Here is just a general answer. Your situation usually requires a tax person knowledgeable in this very specific area .

      Each type of casino game has its own threshold for withholding of part of the winnings for US Federal or state income tax. If you hit the threshold for that game, then you will have to fill out a tax form, and the casino will withhold part of your winnings. For foreign tourists, the figure seems to be 30% of the win.

      Depending on what country you live in, there are ways for you to fill out paperwork, or US tax forms, and get the whole 30% back. For example, Canada has firms that specialize in getting this 30% back for a fee.

      If your country has a treaty with the US, then you may be able to fill out paperwork at the US casino that then allows the casino to give you 100% of your win right on the spot.

      5) Before you take the casinos off of your schedule, consider making them work for you in order to get your business. Simply contact the casino you are going to visit, and ask the management to give you all of the information that they provide concerning income withholding for a person visiting from your country. Tell them you do not wish to have the 30% withheld from any reportable winnings, and what procedure do they have in place for you to legally do this.

  14. I received W2-G’s from two different states. I live in a state with no income tax. Do I need to file returns in those two states because I won there?

    My losses offset my winnings on my Federal Return.

    1. Depends on what the two states are. Even though you live in a state with no income tax, sometimes you do have to file state returns with other states.

      Some states charge a flat tax on gambling winnings, and some do not allow one to deduct gambling losses from gambling winnings on the state return.

  15. I’m married and filed jointly with two dependents. We made $90k income, won about $30k in slot and our win/loss statements show a losses of $32k. My question is how much taxes will we owed? Thank you

    1. Christine, for a more accurate answer, you would need to please share a lot more information, including information about the dependents. When there is little information in a question, I will sometimes run the numbers to get a very rough estimate.

      Married Filing Jointly with two dependents. Income 90k ( Assuming that the 32k in gambling losses will hold up on audit, and that the 90k goes on Line 7 of Form 1040.) Here goes:

      FORM 1040:

      Line 7: $90,000
      Line 38: $90,000
      Line 40, Standard Deduct. $12,400
      Line 42, four exemptions: $15,800
      Line 43, Taxable Income: $61,800

      Line 44: Tax…………………$8,359

      Hope this helps,



  16. I won$20.000 on a scratcher ticket in California I got $ 15.000 this is the only income that came in this year am I going have to file on it still an I going have to pay more or will I get any of that back on the w2g on federal

    1. You are required to file a Federal return because the income is more than the general filing requirement of $10,150 for a single person.

      Federal income tax from the tax table should be $1,020.

      California generally does not tax California Lottery winnings for California residents. Don’t know about out-of-state residents. Also do not know if you are required to file a California state return.

  17. for I got my money. And now I have my w-2g form from them. And my question is is their any one out there knows petty much of what I might get back on it it’s only $4999 on the federal 

    1. Total Income Line 21 of the Form 1040………………………..$20,000

      Standard Deduction………………………………………………….. -6200

      Personal Exemption………………………………………………….. -3950

      Total Taxable Income…………………………………………………$ 9,850

      Tax Due from 2014 Tax Table……………………………………..$ 1,028

      Amount withheld on W2-G………………………………………….. -4999

      Refund Due Taxpayer……………………………$ 3,971

      1. Do I get any of that back I wasn’t going to file on it cuz I didn’t know that I could some one told me that I could do that why I put that on here to find out that would be all my income for that year

  18. I have only been going to a casino since Sept. 2014 and on slot machines I have won a little over $27.000 by end of Dec. No taxes were taken out. I live in Maine, a heavy tax state. My AGI is form$40,000. I have all the W-6 forms to complete and file with my return. I do not understand how to read the win/loss statement. If Fed. tax is %25 and Maine tax is about same will I owe half of all winnings? How much will I need to have lost to offset major tax bill? Thanks in advance for any information.

  19. Why doesn’t the IRS allow you to claim gambling losses on the short form? I’m retired, own my own home, have no medical issues and file the short form. Long form people get a break here.

    1. Hi Kim O.

      Yes, provided that you are required to file a tax return, and I recommend that you do, you will report the $3700 as income on Line 21 of Form 1040.

  20. The major downside of gambling at all when you break even, is that if you win large jackpots and have a corresponding loss (so, you essentially break even), you taxable income is considered to include your winnings only (not your losses figured in). So, there are major tax implications of winning lots and then breaking even because your taxable income is much higher. This affects your ability to qualify for other deductions such as rental property losses, education, etc. I found this out the hard way.

    1. Steve, the two places in your post where you use the term “taxable income,” I believe you meant to say Adjusted Gross Income (AGI).

      On Form 1040, gambling winnings are totaled on Line 21, and that amount can increase total AGI, reported on Line 37, and again reported on Line 38.

      It is the increase in AGI that can negatively affect many tax credits and tax deductions.

      Taxable Income is determined on page 2 of the 1040, where we are able to deduct the large gambling losses by itemizing them on Schedule A. (Provided we have an acceptable gambling diary detailing wins and losses for the year.)

      We arrive at Taxable Income on Line 43 of Form 1040. And we have to watch out for the Alternative Minimum Tax on Line 45.

  21. HI–My taxable income for the year in MA was 43000. My spouse was 800. The Federal withheld for mine was 3638. I also have approx 16k in gambling winnings according to WG form. Will I have to owe money or get a refund? I also have 1 dependent.

    1. Dianna, would like to know all the information about the dependent for a more accurate answer. Also, do not know your definition of taxable income. TurboTax should get you to the exact answer after you enter all of your information.

      I will give you a very rough answer, so that you have an idea of the maximum in Federal income tax that you will owe. NOTE! I cannot figure your MA state income tax at this time.

      Married Filing Jointly with one dependent. Income 43k wife, and $800 husband, for a total of $43,800. Gambling winnings of 16k. Here goes:

      FORM 1040:

      Line 7: Wages, sal., tips, etc..$43,800
      Line 21, Gambling winnings: $16,000
      Line 38, AGI: ………………….. $59,800
      Line 40, Standard Deduct. – $12,400
      Line 42, three exemptions: – $11,850

      Line 43, Taxable Income: $35,550

      Line 44: Tax…………………. $4,429

      Hope this helps,


  22. I am a poker player and won a drawing for $4700 while playing poker. This was the only significant win inside of drawings, jackpots, etc. for the year. Since, it’s poker, does this fall under the $5000 threshold? And will I need to report this?

    1. Joe, the threshold for a drawing is $600. You should receive a 1099 from the casino soon for the $4700. You are required to report the $4700.

      In addition, you are required to report all gambling winnings, whether or not they meet a threshold. The thresholds are for entities such as casinos, racetracks, bingo halls, etc., guiding them on what they are required to report about a player’s win, and how much they are required to withhold from each type of win.

      Prizes received with no wager (Drawings, Promotions, Bad Beat, Poker, etc.) have a $600 threshold for reporting. See the Gaming Withholding and Reporting Threshold chart in IRS Publication 3908 for an idea of gambling withholding.

    1. Kellie, the answer depends on your overall tax rate.

      If the entity that awarded you the system does not send you a W2-G, then you can manually enter the $2000 on Line 21 of your Form 1040 in TurboTax, and see how much that increases your tax.

      Depending on your total income, you could owe anywhere from $0 to about $800 in Federal income tax.

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