You Do Have to File Taxes for Sports Betting: Here’s How
Did you pull in some mad cash from betting on games this season? Congrats! Not to rain on your parade, but before you go spending all of your winnings or reinvesting it, be sure to set some aside for the tax man. Because you do, in fact, need to file taxes for sports betting.
Your future self will thank you for knowing how it works come tax time in the spring. We have the details.
Do you have to file taxes for sports betting?
Yes, you have to file taxes on winnings from DraftKings, FanDuel or any other sports betting apps. Don’t be fooled into thinking the authorities won’t notice – the IRS does care about sports betting winnings.
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Can my sports betting losses offset my winnings?
You might have read that you’re only taxed on your profits rather than your winnings – but that’s not quite true as an individual taxpayer. Janet Berry-Johnson, CPA at Firefly Financial Organizing, notes that while you can technically itemize your sports betting losses, it’s hard for most people to beat the standard deduction.
The standard deduction is quite high. For the 2026 tax year, the standard deduction is:
- Single or Married Filing Separately: $16,100
- Married Filing Jointly or Qualifying Surviving Spouse: $32,200
- Head of Household: $24,150
Starting with the 2026 tax year, you can only deduct up to 90% of your wagering losses, and that amount can’t exceed your gambling winnings. So even if you reported winning $10,000 and also losing $10,000 in the same year, you could only deduct $9,000 and only if you itemize your deductions.
Also note that state laws vary on sports betting, including some that do not allow itemized deductions for gambling losses.
What triggers W-2G paperwork for sports betting?
When you earn enough through sports betting, the casino (or app) will issue a W-2G. This paperwork is akin to the W-2 you might be used to receiving every January from your 9-to-5 job. But this is explicitly made for gambling winnings. The app should send this paperwork to you. The IRS will receive a copy, too, so don’t think about trying to skip out on reporting your winnings. They’ll know.
Beginning in 2026, W-2G reporting is triggered when you win either $2,000 and 300 times the amount wagered. If you meet this threshold, Berry-Johnson says the app will typically ask you to fill out a W-9 so they have all the information they need to get your W-2G paperwork in order. Then they’ll release your winnings.
Depending on the type of platform you used, you may receive a 1099-MISC form instead of Form W-2G.
Regardless of whether you receive a form, the IRS requires you to report all gambling winnings. If you’ve won smaller amounts throughout the year, be sure to include them on your 1040 – even if they’re not included on your W-2G or 1099.
How much should I set aside for taxes for sports betting?
If you win more than $5,000, the IRS requires your sports betting app to withhold a flat 24% tax of your winnings (note that you may end up owing more). However, if you’re in a situation where you have winnings but you’re not issued a W-2G, saving a portion of that money to pay the IRS during tax season falls on your shoulders.
Berry-Johnson says setting aside 24% to 25% is a good guiding rule, but the amount you’ll need varies depending on your personal tax situation.
“If you’re a college student and have little to no other income, you might not owe anything when you file your tax return. On the other hand, if you have a lot of other income from investments, a full-time job, or a business, you might be in a higher tax bracket and need to set aside more.”
She recommends putting this money in a deposit account separate from your everyday checking. That way, it’ll be harder to spend throughout the year. You want to ensure you actually have that savings at the ready when your tax bill comes due in the spring.
Where do I put gambling winnings on my 1040?
When filing taxes, include the amounts from Form W-2G and 1099, plus all other winnings, on Schedule 1 of your 1040. You’ll need to report your gross gambling winnings — do not subtract losses, but you can subtract your wager. Look for the line on Schedule 1 on Form 1040 that says “Other Income”. That’s where you’ll put your total winnings from your sports betting endeavors throughout the year.
Are taxes different for professional gamblers?
Yes. Professional gamblers can file their wins and losses as business profit and losses on a Schedule C. Berry-Johnson says the IRS doesn’t have hard-and-fast rules around who qualifies as a professional gambler, but they will examine your claims to make sure you’re not cheating the system just so you can deduct your losses dollar-for-dollar. Generally speaking, they’re looking to see if you:
- Have a high level of expertise.
- Put time and effort into improving your skills.
- Make all or most of your income from gambling and treat it like a business.
Berry-Johnson currently lives and works in Omaha, Nebraska, but she grew up and started her accounting career in Nevada. Her father was a casino cage manager in Las Vegas. She recounts some sage advice he gave her one night when she was young.
“We were looking out over the Las Vegas Strip with all of its lavish towers, lights and fountains. [He told me,] ‘Casinos don’t make all their money because their customers are winning.’”
As you’re coming off the high of a big win, you might think you could do this professionally. But before you sell the family farm to become a “professional gambler” for tax purposes, it’s important to remember that the house always wins.
Editor’s Note: If you or someone you know is struggling with a gambling problem, you can connect with Gamblers Anonymous by visiting their official website at gamblersanonymous.org to find local meetings, resources and support groups.
Pittsburgh-based writer Brynne Conroy is the founder of the Femme Frugality blog, DISABILIFINANCE and the author of “The Feminist Financial Handbook.” She is a regular contributor to The Penny Hoarder. Senior managing editor Tiffany Wendeln Connors updated this post for 2026.
