How gambling winnings are taxed
In the US, gambling and sports betting winnings are ordinary income. You report the full amount on your federal return. Payers withhold a flat 24% federal tax on winnings over $5,000 (from wagers), but that is just withholding: your final bill depends on your tax bracket, which runs from 10% to 37%. Big wins can push you into a higher bracket.
Your state takes a second bite
Most states tax gambling winnings as ordinary income at your marginal rate. Nine states charge nothing: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. At the other end, New York taxes top earners at 10.9%, New Jersey and DC at 10.75%, Oregon at 9.9%, Minnesota at 9.85%, and California up to 13.3%. Several states, including California, Connecticut, Illinois, and Pennsylvania, do not let you deduct gambling losses at the state level at all, so break-even gamblers still owe state tax on gross winnings.
The 2026 federal loss-deduction cap
Starting in 2026, the One Big Beautiful Bill Act caps the gambling loss deduction at 90% of winnings. If you win $100,000 and lose $100,000, you can only deduct $90,000, leaving $10,000 of taxable phantom income even though you broke even. Track every session: date, location, amounts won and lost.
Worked example: $10,000 win
- Florida: $2,400 federal estimate + $0 state = $2,400 total, you keep about $7,600.
- New York: $2,400 federal estimate + about $1,090 state (10.9%) = $3,490 total, you keep about $6,510.
The same win costs nearly $1,100 more in tax in New York than in Florida, before any bracket effects.
Where sports betting is legal
Sports betting is legal in 39 states plus Washington, DC, with statewide online betting in 31 of them. Winnings are taxable wherever you win them, and your home state generally taxes out-of-state winnings too (usually with a credit for tax paid elsewhere).
More 2026 tax calculators
The same 2025 tax law (OBBBA) changed more than sports betting taxes. Try the Gambling Losses Tax Calculator 2026 for the federal 90% loss-deduction cap, the No Tax on Tips Calculator 2026 for tipped workers, and the Senior Bonus Deduction Calculator 2026 for filers 65 and older.
This calculator is an estimate, not tax advice. State rates shown are top marginal rates applied to gambling income; your actual rate depends on your total income. Consult a tax professional for your situation. If gambling stops being fun, call or text 1-800-GAMBLER (US) for free, confidential help, 24/7.