Don't Get Fooled! Casino Taxes by State 2024

Gambling taxes overview – What to expect, and the general concepts

Overview of taxing gambling

Gambling income will always be taxable income. This is because it is considered fair market value for the income you receive. For those states that allow gambling, gambling taxes by the state include but are not limited to Casino games, Slot machines, Keno, Poker tournaments, Lotteries, Sweepstakes, Raffles, Betting pools, Gameshows, Horse racing, track betting, and bingo. With that covering almost all forms of online gambling: how do I pay gambling taxes by the state?

Gambling winnings

Do casino payouts by state tend to differ? Generally, all gambling winnings are subject to a 24% flat rate. You pay this yearly, in April at the end of every tax return year. However, if your winnings are over $5,000, you may have to do more work. In addition, some states that allow casinos will charge a higher tax rate on winnings than other forms of gambling.

You’d have to submit a form called the W-2G. The form W-2G for Certain Gambling Winnings calculates how much tax you will have to pay on big gambling winnings, and the state will withhold the tax they deem necessary for the winnings.

Gambling losses

The first upside to all these casino taxes by state, though, is your gambling losses. Finally, they may serve some purpose as a tax relief of sorts. You’ll have to report both gambling losses and winnings separately, but your losses can offset the number of gambling winnings state taxes.

Gambling records

Presenting the W-2G to the state in your tax returns means retaining records of your gambling activity. Receipts, payment slips, statements, and the name of the gambling event or the establishment you would gamble at.

Gambling professionally

However, if you are a professional gambler, you can save a lot of hassle with gambling taxes by state. If you gamble for a living, the state will officially recognize gambling as your occupation. So, you’ll just be taxed at your normal income tax rate.

Current casino taxes by state in the USA

Western states

Southwest

Midwest

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Southeast

Northeast

We provided the basic overview, and obviously, we have not included states where gambling is illegal, but always remember that laws at a state level are constantly changing in terms of gambling. Some states that have just legalized gambling, like Nebraska, may decide to lower or raise their gambling tax based on how many people are gambling, the number of earnings, etc.

It’s always important to note that while this information is accurate as of 2021, that the law is an ever-changing beast. Be cautious that your state laws could be liable to be changed at any time based on any gambling factors within your state.

Conclusion – A wide range of taxes, but a wider range of opportunities

To wrap up, the federal tax rate isn’t the standard one you should go by when taxing your gambling winnings. It completely changes casino taxes by state to state, and you may be leaving with more winnings in some states rather than others.

For example, the Northern states such as New Jersey, Pennsylvania, and Indiana would be subject to lower gambling winnings state taxes. However, southern states such as Louisiana, Florida, and South Carolina are subject to much higher taxes. But, now you have a necessary leg up that all gamblers would love to have.

Check out which type of online gambling your state allows!

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