How Much Tax Do You Pay on Gambling Winnings?

The tax on gambling winnings is ordinary federal income tax at your marginal rate, which for the 2026 tax year runs from 10% to 37%.¹ For many large payouts, the casino, sportsbook, or lottery pulls a flat 24% before you ever touch the money, but that withholding is a prepayment, not the final bill. Every dollar you win is reportable, whether or not you receive a tax form.²

How Your Winnings Get Taxed

Gambling income has no special rate. It stacks on top of your wages, interest, and everything else, then gets taxed under the regular brackets. Winnings from casinos, lotteries, raffles, sports betting, horse races, poker tournaments, bingo, keno, slots, and fantasy sports all count. Non-cash prizes — a car, a vacation, electronics — are taxable at fair market value on the day you receive them.³ Whether the wager was legal or not makes no difference, and crypto payouts are taxed at their fair market value when received.²

For a single filer in 2026, the brackets look like this:¹

10% on taxable income up to $12,400
12% from $12,401 to $50,400
22% from $50,401 to $105,700
24% from $105,701 to $201,775
32% from $201,776 to $256,225
35% from $256,226 to $640,600
37% above $640,600

Married couples filing jointly get wider brackets; the 24% rate, for instance, doesn’t start until $211,400 of taxable income.¹ So a $10,000 slot jackpot lands very differently on someone already earning $90,000 than on someone earning $30,000.

The 24% Withheld at the Window

On certain large payouts, the payer withholds 24% federal tax before paying you.⁴ It kicks in when winnings exceed $5,000 from:⁵

Sweepstakes, wagering pools, and lotteries, with no minimum odds requirement
Poker tournaments, on net winnings above $5,000 after the buy-in
Other wagers where the payout is more than $5,000 and at least 300 times the amount bet

Bingo, keno, and slot winnings are specifically exempt from this automatic withholding, no matter how large.⁵ Exempt from withholding, not exempt from tax — you still owe the money when you file. Backup withholding at 24% also applies to any game if you don’t give the payer a valid Social Security number or ITIN.⁴

Either way, treat the 24% like paycheck withholding: it counts toward your final tax. If your marginal rate is higher, you owe the difference in April. If it’s lower, you get a refund. Separately, payers file Form W-2G to report winnings to the IRS; for 2026 the reporting threshold rose to $2,000 across most game types, indexed for inflation going forward.⁶ Not getting a W-2G does not mean the winnings aren’t taxable.

The AGI Side Effect Most People Miss

Your gross winnings go on your return as income even if you also lost money that year, because losses are handled separately (more on that below). That inflates your adjusted gross income. A higher AGI can phase you out of the Child Tax Credit, education credits, and the premium tax credit for health insurance, and can pull more of your Social Security benefits into taxable territory. The lost credits sometimes cost more than the income tax on the winnings themselves.

Can You Deduct Your Losses?

Federal law lets you deduct gambling losses, but only up to the amount of gambling winnings you report for the year.⁷ Win $8,000 and lose $12,000, and you can deduct $8,000. The extra $4,000 in losses is gone. You can’t carry it forward, and you can’t use it against wages or investment income.

The bigger catch: losses only help if you itemize on Schedule A instead of taking the standard deduction.² For 2026 the standard deduction is $16,100 for single filers and $32,200 for joint filers.¹ Add your gambling losses to your mortgage interest, state and local taxes, charitable contributions, and other itemizable expenses. If the total doesn’t clear the standard deduction, the losses give you nothing, and you’ll pay tax on the full winnings with no offset at all.

Where the Numbers Go on Your Return

Report your total winnings on Schedule 1 (Form 1040), line 8b, under Other Income.⁸ That figure flows to your Form 1040. Include all winnings, not just what appears on W-2G forms. If you’re deducting losses, list them on Schedule A as Other Itemized Deductions; the deducted amount cannot exceed the winnings you reported.² Federal tax already withheld appears in Box 4 of each W-2G and gets credited on your return like paycheck withholding.

Records You Need If You Claim Losses

The IRS wants a contemporaneous log, not a memory exercise done in April.⁹ Each entry should note:

The date and type of game
The name and address of the casino, track, or platform
Amounts won and lost in that session
Who was with you

Keep supporting documents too: W-2Gs, wagering tickets, payment receipts, and bank or credit records showing deposits and withdrawals.² Casino win/loss statements from a player’s card are useful backup, but they don’t replace a personal log; the IRS has successfully challenged returns built on casino statements alone, because those statements only capture tracked play. For online sportsbooks and mobile apps, pull your transaction history before year-end. Platforms sometimes purge older data.

After a Big Win: Estimated Tax

A large win partway through the year can leave you badly short at filing time, especially on games like bingo, keno, and slots where nothing is withheld at the window. Federal tax is pay-as-you-go, and the IRS charges an underpayment penalty if you don’t keep up.

You generally need to make estimated payments if you’ll owe at least $1,000 after withholding and credits. To dodge the penalty, your total withholding plus estimated payments must equal the lesser of 90% of this year’s tax or 100% of last year’s tax; that safe harbor climbs to 110% if your prior-year AGI topped $150,000.⁴ Quarterly payments go in with Form 1040-ES. Hit a jackpot in September, and you’d make an estimated payment for that quarter rather than waiting for April. A gambling windfall by itself doesn’t qualify you for a penalty waiver.¹⁰ If you’d rather skip the quarterly paperwork, file a new Form W-4 with your employer to increase paycheck withholding, which counts the same.

State Tax Is Separate

Federal tax is only one layer. Most states also tax gambling winnings, and some withhold state tax on large payouts on top of the federal 24%. Rates run from 0% in states with no income tax up to roughly 10.9%, with most in the 3% to 7% range. If you gambled in a state other than the one you live in, you may owe both, though states generally offer a credit that prevents full double taxation. Check your home state’s rules; the specifics vary a lot.

If You’re Not a U.S. Resident

Different rules apply to nonresident aliens gambling in the United States. Winnings are generally subject to 30% federal withholding — not 24% — and are reported on Form 1042-S instead of W-2G. Winnings from blackjack, baccarat, craps, roulette, and big-6 wheel are not subject to that withholding or reporting.¹¹ A tax treaty between the U.S. and your country of residence may lower or eliminate the 30% rate. Nonresident aliens generally cannot deduct gambling losses against U.S. gambling income unless a treaty allows it.

1
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
2
Internal Revenue Service. Topic No. 419, Gambling Income and Losses
3
Internal Revenue Service. Publication 525 (2025), Taxable and Nontaxable Income
4
Internal Revenue Service. Publication 505 (2025), Tax Withholding and Estimated Tax
5
Office of the Law Revision Counsel. 26 USC 3402 – Income Tax Collected at Source
6
Internal Revenue Service. Instructions for Forms W-2G and 5754 (Rev. January 2026)
7
Office of the Law Revision Counsel. 26 USC 165 – Losses
8
Internal Revenue Service. 2025 Schedule 1 (Form 1040)
9
Internal Revenue Service. Publication 529 (12/2020), Miscellaneous Deductions
10
Internal Revenue Service. Penalty for Underpayment of Estimated Tax
11
Internal Revenue Service. Instructions for Forms W-2G and 5754 (01/2026)