How Your College & Pro Sports Bets Affect Your Taxes

If you’ve placed any sports bets this year, you’ll need to report your winnings on your tax return. Whether you’ve bet on the NFL, CFB, or MLB, winnings for these games are considered taxable income.

Americans have spent over $10 billion in sports betting between January and August 2025 alone¹. With the rise of sports betting in recent years, sports betting taxes have become a hot topic that many taxpayers are new to navigating. Simplify your tax prep by using this sports betting tax guide.

Key takeaways

• You have to report all sports betting winnings, even if you lost money over the course of the year
• Sports betting winnings are taxed as ordinary income
• You’ll have to pay federal and state taxes on your sports betting winnings
• Tax rates vary by state, with some states having no taxes on sports betting 
• You can write off your gambling losses up to the amount of your winnings
• Starting in 2026, you will only be able to deduct 90% of your losses

Do you have to pay taxes on sports betting?

Yes, you have to pay taxes on sports betting winnings. All gambling winnings, including successful sports wagers, must be reported on your tax return, regardless of whether you receive a W2-G or 1099 form or not.

How is sports betting taxed?

Your winnings are taxed as ordinary income, so your tax rate will depend on your tax bracket. Sports betting is taxed at both the federal and state levels.

When you file your federal taxes, you can use Schedule 1 (Form 1040) to report your gambling income, which includes sports betting and other forms of gambling.

What are the tax rates for sports betting by state?

Sports betting taxes on your state return can vary since each state has their own tax rules. Sports betting is currently legal in 38 states and Washington D.C. Use this table to see how sports betting and taxes vary from state to state²:

State:	Tax rate:
Arizona	8% for retail wagering 10% for online wagering
Arkansas	13% on the first $150M in revenue 20% on revenue above $150M
Colorado	10%
Connecticut	13.75% for sports betting operators
D.C.	10%-30% for private sports betting operators
Delaware	50%
Florida	N/A
Illinois	20% on sports betting receipts up to $30M 25% on receipts more than $30M but less than $50M 30% on receipts more than $50M but less than $100M 25% on receipts more than $100M but less than $200M 40% on receipts more than $200M
Indiana	9.5%
Iowa	6.75%
Kansas	10%
Kentucky	9.75% on retail wagering 14.25% on online
Louisiana	10% on retail wagering 21.5% on online
Maine	10%
Maryland	20%
Massachusetts	15% for retail wagering 20% for online
Michigan	8.4% for retail wagering
Mississippi	8% 3%-4% local tax
Montana	Based on state income tax rate (6.9% withheld on $5,000+)
Nebraska	20%
Nevada	6.75%
New Hampshire	50% for retail wagering 51% for online
New Jersey	9.75% for retail wagering 19.75% for online
New Mexico	6%
New York	51%
North Carolina	18%
North Dakota	Based on state income tax rate (up to 2.5%)
Ohio	20%
Oregon	State collects revenue minus expenses
Pennsylvania	36%
Rhode Island	51%
South Dakota	9%
Tennessee	20%
Vermont	DraftKings: 31% Fanatics: 31% FanDuel: 33%
Virginia	15% of adjusted gross gaming revenue
Washington	N/A
West Virginia	10%
Wyoming	10%

Source: National Conference of State Legislatures

Can you deduct sports betting losses on your taxes?

You can write off your gambling losses in some cases, but there are limitations. For tax year 2025, you can write off losses up to the amount of your winnings. Let’s say you win $4,500 and lose $5,000; your net result is a loss of $500. Even if your losses exceed your winnings, your deduction is capped at the total amount won ($4,500). If you itemize your deductions, you will not owe any tax on the $4,500 of winnings because you can deduct the full $4,500 against your winnings, resulting in $0 gambling income.

Starting on January 1, 2026, the One Big Beautiful Bill Act (OBBBA) changes the rules on the deduction of losses. Starting with tax year 2026, you can only deduct 90% of your total winnings. Using the previous example, if you win $4,500 and lose $5,000, you can only deduct $4,050 (90% x $4,500).

One thing to keep in mind is that you can only write off your sports betting losses if you itemize your deductions. You can deduct your gambling losses on line 16 of Schedule A (Form 1040), but you’re not eligible to deduct those losses if you claim the standard deduction.

Are there league-specific considerations for taxes on sports betting?

Whether you’re betting on college football, March Madness, or the Super Bowl, betting on different sports can impact your winnings and how you document them.

NFL sports betting

The NFL is the most-watched pro sports league in the US, so many people bet on NFL games, which often results in larger payouts. Single-game bets and prop bets are popular among NFL bettors. Aside from the larger payouts, NFL betting tax reporting is the same as any other league.

College sports betting

College sports, including NCAA football and NCAA basketball, are more restricted in many states when it comes to betting. Many states restrict bets on college sports to retail only, but your tax obligations remain the same. If you win a wager, you’re responsible for reporting college sports betting winnings on your tax return.

NBA, NHL, MLB, and other professional leagues

The tax rules don’t change by league, which means your winnings are taxable whether you’re betting on NFL or NBA games.

Placing different types of bets, such as futures, can impact your odds and how you document sports betting winnings.

Are international sports bets taxed differently?

The rules are the same for international sports bets and offshore platforms. You’re required to report any winnings when you file your tax return.

International sports betting can be a bit more complex if you’re using an offshore platform, due to factors like:

• Transfer tracking
• Currency conversion
• Potential cross-border issues

If you’re betting on overseas leagues using a standard sportsbook, you typically don’t have to worry about these obstacles.

What are some examples of how taxes on sports betting winnings work?

Here are some real-world scenarios to help you understand how taxes on sports betting work IRL:

Example 1: NFL single-game bet, and you won money

Let’s say you’re placing a single-game bet on an NFL game in Iowa. Your bet wins, and the payout is $4,000. Now, let’s say your total income is $60,000, including that $4,000 win; how much would you owe in taxes for your winnings?

Your total income of $60,000 would make your federal tax rate 22%, so you would owe $880 in federal taxes on your $4,000 win. For this exercise, let’s say you live in Iowa. With the 3.8% Iowa state tax rate, you would owe another $152 in state taxes for a total of $1,032.

Example 2: College single-game bet, and you lost money

Losing a single-game bet has a different impact on your taxes. If you place a $2,000 single-game bet on a college football game and that bet loses, you don’t owe any taxes. But you also cannot deduct the loss.

Example 3: Multiple smaller best placed for both pro and college games

Let’s say you win $800 on a mix of NFL and CFB bets, but you lose $500 on an NHL game.

You owe NFL and CFB betting taxes on your winnings, which means you would report the full $800 on your taxes. If you itemize, you can deduct the $500 in NHL losses to reduce your taxable gambling income to $300.

You’ll then pay federal and state income taxes on the $300 in winnings. Let’s stick with the 22% federal tax rate we used in the NFL single-bet example. That would result in $66 in federal taxes for your sports betting winnings. For your state taxes, let’s stick with Iowa’s 3.8% for this example; with $300 in winnings, you’d owe $11.40 on your state income tax return for your sports betting winnings.

Why has there been a rise in sports betting in recent years?

The rise in sports betting kicked into gear with the 2018 repeal of PASPA, which gave states the authority to regulate sports betting. From 2020 to 2024, regulated sports betting revenue has increased from less than $2 billion annually to nearly $14 billion⁵.

What is the tax outlook on sports betting?

As sports betting grows in popularity, the tax on sports betting winnings is also changing. Many states, including Ohio, Illinois, and Massachusetts, have proposed an increase in sports betting tax rates².

Prior to Super Bowl LIX, the American Gaming Association (AGA) predicted a record $1.39 billion in wagers on the Super Bowl alone⁶, and that number is expected to increase in 2026.

Keep taxes in mind when you receive sports betting winnings

If you’re betting on sports, you need to keep taxes in mind and keep detailed records to make sure you’re prepared for tax season. Understanding state tax rates and regulations can help you avoid unexpected taxes.

If you have questions about reporting sports betting winnings and losses on your tax return, a tax professional can help. One of our tax experts can make sure you’re ready when tax season arrives.

FAQs about sports betting taxes

Do I owe taxes on every sports bet I win?

Yes, you owe taxes on all sports gambling winnings. Gambling winnings must be reported even if you don’t receive a W-2G or 1099.

Are the rules for sports betting winnings different if I live in a state with no income tax?

You don’t have to pay state taxes on winnings in some states with no income tax, but some states have a separate gambling tax. Your sportsbook winnings will also be taxed as ordinary income at the federal level.

What if I lose money on my bets? Can I deduct that?

If you lose money on a bet, you can deduct losses up to the amount of your winnings. You can only deduct sports betting losses if you itemize.  Starting in 2026, you will only be able to deduct 90% of your losses.

Will sportsbooks withhold tax for me?

Sportsbooks will withhold taxes for you on winnings that exceed a certain amount. For smaller payouts, you may need to make estimated tax payments to pay the taxes due and keep detailed records for tax season.

Are there special tax rules for sports betting apps and mobile bets?

Some states tax retail sports betting and online/mobile sports betting at different rates, but online and retail bets are taxed at the same rate federally.

Sources

1. American Gaming Association. (2025, October 17). Commercial Gaming Revenue Tracker. https://www.americangaming.org/resources/commercial-gaming-revenue-tracker/ 
2. National Conference of State Legislatures. (2025, March 21). Seven years of sports betting: Did states get it right? https://www.ncsl.org/fiscal/seven-years-of-sports-betting-did-states-get-it-right 
3. U.S. Congress. (2025, July 4). H.R. 1 – One Big Beautiful Bill Act (119th Congress). https://www.congress.gov/bill/119th-congress/house-bill/1/text 
4. American Gaming Association. (2025, May 13). State of the States 2025. https://www.americangaming.org/resources/state-of-the-states-2025/ 
5. ESPN. (2025, February 4). Americans expected to bet $1.39 B legally on Super Bowl LIX. https://www.espn.com/nfl/story/_/id/43691763/americans-expected-bet-139b-legally-super-bowl-lix