If your weekend plans include dropping a bet on the Super Bowl, don’t forget that Uncle Sam wants a piece of anything you win.
Americans are expected to wager about $6.8 billion on Sunday night’s matchup between the Kansas City Chiefs and San Francisco 49ers in Miami. And no matter where you place your bet — whether at a casino, online, through a pool or fantasy league, or at your neighbor’s annual bash — the IRS expects you come to clean at tax time.
“Most people don’t realize they have to report any kind of winnings from gambling activities,” said Oscar Vives Ortiz, a CPA who serves on the American Institute of CPAs’ personal financial specialist committee.
Fans celebrate after making bets through FanDuel Sportsbook during Super Bowl LIII in East Rutherford, New Jersey, on Feb. 3, 2019.
Eduardo Munoz | Reuters
“Whether you win $10 or … a large amount, everything should be reported to the IRS,” he said.
Roughly 26 million people are expected to bet on the Super Bowl, according to the American Gaming Association. Of those bettors, 4 million will wager in person at a sportsbook and 5 million will do it — legally or illegally — through an online or mobile platform.
The remainder — roughly 16 million — will bet with a bookie, in a pool or squares contest, or casually with family or friends.
Since the Supreme Court overturned a federal law in May 2018 that had banned sports betting in most places, more than $17 billion has been wagered legally, according to the gaming group. There are 14 states that now offer regulated sports betting, with six more and the District of Columbia expected to soon.
While you might be less likely to tell the IRS about money you win outside of regulated channels, just be aware that it is considered taxable income.
“The risk of not reporting it is that if you get audited, and they find it, you’d owe back taxes and penalties,” Vives Ortiz said.
For casual gamblers placing wagers through regulated sports betting in states that allow it, the IRS makes it a bit easier for you by placing reporting requirements on the payor (i.e., the casino), as well.
Generally speaking, if you win more than $600 for a sports wager and the amount is 300 times the original bet, the payor is required to withhold 24% of your winnings for federal taxes, Vives Ortiz said.
There’s also a Form W-2G that you might receive from the payor, depending on how much you win. Fantasy sports players who win more than $600 should receive a 1099-MISC.
Remember, those forms also go to the IRS. And if you fail to report the income, you can pretty much count on hearing from the agency.
“If you skip it on your return, the IRS has a copy and you’ll immediately be flagged in their system,” Vives Ortiz said.
Also be aware that your final tax bill could be higher or lower than the amount withheld by the casino or other payor, depending on your other income and a variety of other factors. And even if no tax is withheld, you’re not off the hook for claiming the income on your tax return.
One way to reduce what you owe on your winnings is to write off your gambling losses. Be aware, though, that you’d need to be able to back up your claims with documentation if the IRS were to ask for proof.
“If you get audited, the burden of proof is on the taxpayer,” Vives Ortiz said. “There have been situations where losses get disallowed because gambling diaries weren’t kept properly.”
Additionally, you can only take a deduction for gambling losses if you itemize on your tax return. The majority of taxpayers are not itemizers because they’re financially better off with the standard deduction, which was nearly doubled under new tax law in effect from 2018 through 2025.
And, even if you do itemize, you cannot claim losses in excess of your actual winnings, Vives Ortiz said.
Professional gamblers, meanwhile, face some separate rules. When they deduct their expenses (i.e., traveling to and from a casino), they must add them to their gambling losses when calculating the value of the deduction instead of writing them off separately as a business expense.