Gambling winnings are taxable income under US federal law — and how much you keep depends on your state and how you were paid.
All gambling winnings are taxable income under US federal law and must be reported, no matter where you play or how small the amount. Regulated US operators issue a Form W-2G above certain thresholds (for example $1,200 on slots, $600 at 300:1 odds), and may withhold 24% for the IRS on large wins. You can deduct gambling losses, but only up to the amount of your winnings and only if you itemize.
Offshore operators — the casinos and sportsbooks reviewed on this site — do not issue a W-2G or 1099 and don't report to the IRS on your behalf. That does not make the winnings tax-free. It means the reporting responsibility is entirely yours: keep your own records of deposits, withdrawals, wins and losses.
If you play in cryptocurrency, there are two separate tax events. First, the gambling winnings are income. Second, when you later sell or convert that crypto, any change in its value between receiving and disposing of it is a capital gain or loss, reported separately. Track the USD value of crypto at the moment you receive it — that's your cost basis.
On top of federal tax, most states tax gambling winnings as income. A few have no state income tax at all.
| State | State tax on winnings |
|---|---|
| Texas | 0% — no state income tax |
| Florida | 0% — no state income tax |
| Tennessee | 0% — no state income tax |
| Ohio | 2.75% flat (no loss deduction on state return) |
| North Carolina | 4.25% flat |
| Georgia | 5.39% flat |
| California | Up to 12.3% (13.3% over $1M) |
See our state casino guides for local detail: Texas, California, Florida, Georgia, North Carolina, Ohio, Tennessee.
Yes. Gambling winnings are taxable income under US federal law regardless of where the operator is based. Offshore casinos don't issue a W-2G or report to the IRS, so you are responsible for tracking and reporting the winnings yourself. Consult a tax professional.
No. Offshore operators do not send you or the IRS a W-2G or 1099. That does not make winnings tax-free — it shifts the record-keeping and reporting responsibility entirely to you.
There are two events: the winnings are income when you receive them, and any change in the crypto's value before you convert it to dollars is a separate capital gain or loss. Record the USD value at the moment you receive the crypto.
Under federal rules you can deduct losses up to the amount of your winnings, but only if you itemize deductions. Some states (Ohio, for example) do not allow a loss deduction on the state return.