Quick answer: in the US, all gambling winnings are taxable income, including online casino and sports betting wins, even when you get no tax form. They are taxed at your normal federal rate of 10% to 37%, plus state tax in most states. From 2026 you can deduct only 90% of your losses, and only if you itemize. In the UK and, for casual players, in Canada, gambling winnings are not taxed. Use the calculator below to estimate the tax on your win, or to compare a lottery lump sum with the annuity.
This is an estimate, not tax advice. It uses the 2026 federal brackets and a flat state rate you enter, and skips credits, local taxes and the alternative minimum tax. Check your own figures with a tax professional.
The calculator runs in your browser and doesn’t store anything you type.
How much tax do you pay on gambling winnings?
In the US, a gambling win is added to the rest of your income for the year and taxed at your normal federal income tax rates. According to the IRS and Kiplinger, that applies to every kind of win: casinos, online casinos, sports betting, lotteries, raffles and horse racing. You must report it even when the casino or sportsbook sends no form.
Because the win sits on top of your other income, part or all of it is taxed at your highest rate. These are the 2026 federal rates, from the IRS and CPA Practice Advisor:
| Federal rate | Single: taxable income over | Married filing jointly: over |
|---|---|---|
| 10% | $0 | $0 |
| 12% | $12,400 | $24,800 |
| 22% | $50,400 | $100,800 |
| 24% | $105,700 | $211,400 |
| 32% | $201,775 | $403,550 |
| 35% | $256,225 | $512,450 |
| 37% | $640,600 | $768,700 |
The 2026 standard deduction is $16,100 if you are single and $32,200 for a married couple filing jointly. Our example: a single player with $60,000 of other income wins $10,000 on a slot. Their taxable income goes from $43,900 to $53,900, so the win adds $1,550 of federal tax. With a 5% state tax, they keep about $7,950.
Gambling winnings tax calculator
The calculator above has four modes:
- US: tax on a gambling win. Enter the win, the type of game, your filing status, your other income, any gambling losses and your state tax rate. It shows the federal and state tax, what you keep, and whether 24% is likely to be withheld when you are paid.
- US lottery: lump sum vs annuity. Enter the advertised jackpot and the cash option, and it compares the two after tax. See the lump sum vs annuity section below.
- UK and Canada show the rules for casual players there.
It uses the 2026 federal brackets and a single state rate that you enter. It leaves out tax credits, local taxes, the alternative minimum tax and other special cases, so treat the result as an estimate and not as tax advice. If you play the lottery, our lottery odds calculator shows your real chance of winning before you think about the tax.
When do you get a W-2G?
A casino, sportsbook or lottery sends you Form W-2G when a win passes a set amount. From 1 January 2026 those amounts went up to $2,000, according to the IRS and EY:
| Type of win | Before 2026 | From 2026 |
|---|---|---|
| Slots and bingo | $1,200 | $2,000 |
| Keno (after the stake) | $1,500 | $2,000 |
| Sports betting, horse racing, lotteries and other bets | $600 and at least 300x the stake | $2,000 and at least 300x the stake |
| Poker tournaments (after the buy-in) | $5,000 | $5,000 or $2,000 (sources differ) |
For poker tournaments, EY says the threshold stays at $5,000, while Kiplinger says it is now $2,000. The IRS rules for this change are still proposed, and the amounts will rise with inflation from 2027. Remember that the W-2G is only a reporting rule: a win below the threshold is still taxable.
Can you deduct gambling losses? The 90% rule from 2026
Yes, but with new limits. From the 2026 tax year, you can deduct only 90% of your gambling losses, and never more than your winnings, according to EY and KPMG. You also have to itemize your deductions on Schedule A, so the losses only help if your itemized total is bigger than the standard deduction (IRS, Kiplinger).
This means you can now pay tax even when you broke even or lost. KPMG’s example: you win $10,000 and lose $8,000. You can deduct only $7,200, so you are taxed on $2,800 although you only came out $2,000 ahead. At a 24% rate that is $672 of federal tax, and the calculator gives the same figure.
A bill to bring back the full 100% deduction was approved by the House Ways and Means Committee on 16 September 2026, according to Rep. Dina Titus’s office and Hoodline. It still needs votes in the full House and the Senate, so the 90% rule applies for now. We will update this page if it changes.
Federal withholding vs what you actually owe
For lotteries, sweepstakes, betting pools and bets that pay at least 300 times the stake, the payer withholds 24% for federal tax when the win, minus the stake, is over $5,000. Slots, bingo and keno wins have no regular withholding. That $5,000 trigger did not change in 2026. Sources: IRS W-2G instructions, Kiplinger and Wipfli. If you don’t give the payer your Social Security number, 24% backup withholding can apply instead (IRS Publication 505, EY).
The 24% is only a down payment. A big win can push you into the 32%, 35% or 37% bracket, so you may owe more when you file, as NBC and MagnifyMoney point out. Our example: a single player with $60,000 of other income wins $1,000,000 on the lottery. About $240,000 is withheld, but the federal tax on the win is about $337,180, so roughly $97,000 more is due with the tax return.
State tax on gambling winnings
Most states tax gambling winnings as income. Your home state taxes you, and a state where you win may also tax the win and withhold tax, though you usually get a credit for tax paid to the other state (Kiplinger, Pennsylvania Department of Revenue).
- No state income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, according to TaxAct. The Tax Foundation lists eight, leaving out Washington because it taxes some capital gains.
- California doesn’t tax California Lottery prizes, including Powerball and Mega Millions, but it does tax other gambling winnings (California Franchise Tax Board, NBC).
- Delaware does tax its lottery prizes: “All winning Delaware Lottery tickets are subject to Delaware Income Tax” (Delaware Lottery, LegalClarity).
Rates and rules change, so check your state tax agency’s website and enter its rate in the calculator. Use 0% if your state doesn’t tax the win.
Lump sum vs annuity: which lottery payout is better?
If you win the Powerball or Mega Millions jackpot, you choose between the cash option (a lump sum) and the annuity. The annuity is one payment straight away and then 29 yearly payments, each 5% bigger than the last (Powerball, Mega Millions, MagnifyMoney). The advertised jackpot is the total of those 30 payments.
The cash option is much smaller. The record $1.817 billion Powerball jackpot of 24 December 2025 had a cash value of $834.9 million, about 46% (Powerball, Axios). The share moves with interest rates, and recent jackpots have offered roughly 44% to 46% as cash.
Lump sum vs annuity after tax: an example
Our example uses the calculator’s default figures: a $100 million jackpot with a $45 million cash option, a single winner with $60,000 of other income, and 5% state tax.
| Lump sum | Annuity | |
|---|---|---|
| Before tax | $45,000,000 now | $1,505,144 rising to $6,195,375 a year |
| After federal and state tax | About $26.2 million now | About $60.1 million over 29 years |
| First year after tax | $26.2 million | About $943,000 |
The annuity pays far more in total, but most of it arrives years from now. In this example, the lump sum only comes out ahead if you can earn more than about 5.3% a year after tax on the money. That is the “break-even return” the calculator shows.
Which should you choose?
- The lump sum gives you control and the full amount at once. It suits winners who have a plan and good advice for investing it.
- The annuity pays more in total and protects you from spending everything at once. Each payment is 5% bigger than the one before.
- Taxes: lotteries withhold 24% federal tax up front, but a jackpot is mostly taxed at the 37% top rate, so expect a bigger bill when you file. The $834.9 million Arkansas winner had 24% federal and 3.9% state tax withheld (Powerball, Delaware Lottery).
Check the deadline too. The choice follows the rules of the lottery that sold the ticket. In Illinois, for example, you must claim within 60 days of the draw to take the cash option, after which only the annuity is available (Illinois Lottery, CNBC).
Gambling winnings tax in the UK
In the UK, players don’t pay Income Tax or Capital Gains Tax on gambling winnings, and that includes National Lottery wins (GOV.UK Income Tax, GOV.UK Capital Gains Tax). HMRC’s view is that betting and gambling on their own are not a trade, even for most professional gamblers (HMRC manual BIM22015, Taxfix). The operators pay betting and gaming duties instead.
Gambling winnings tax in Canada
In Canada, lottery winnings of any amount are not reported or taxed, according to the Canada Revenue Agency. Casino and bingo wins are also tax-free for casual players (H&R Block Canada, Knowledge Bureau). The exception is someone who gambles as a business, whose winnings are taxed as business income, but the CRA treats very few players that way.
Keep a gambling log
To deduct US gambling losses, you need records. The IRS and Kiplinger say you should keep a diary showing:
- the date and type of each bet or gambling session
- the name and address of the casino, site or venue
- who was with you
- how much you won and lost
Keep your W-2G forms, betting slips, lottery tickets, bank and card statements and casino win/loss statements too. Our free gambling tracker makes the diary easy, and our gambling budget calculator helps you set a limit before you play. For the rules on playing online where you live, see our online gambling laws guide.
How we checked this
- 2026 brackets and standard deduction: IRS and CPA Practice Advisor.
- W-2G thresholds from 2026: IRS Internal Revenue Bulletin 2026-19, IRS W-2G instructions, EY and Kiplinger.
- The 90% loss rule: EY, KPMG and Kiplinger. Withholding: IRS, Kiplinger and Wipfli.
- Annuity structure and cash values: Powerball, Mega Millions, MagnifyMoney and Axios.
- The worked examples, the after-tax lump sum and annuity figures and the break-even return are our own maths, using the same formulas as the calculator.
Last checked: 23 October 2026, when we tested the calculator against the 2026 IRS tax brackets and the published loss examples from KPMG ($10,000 won, $8,000 lost: $7,200 deductible) and Kiplinger ($400 won, $300 lost: $270 deductible), and every figure matched. This page is general information, not tax advice. Gambling is for adults (18+) only. If it stops being fun, see our responsible gambling guide.
Gambling winnings tax FAQs
Are gambling winnings taxable?
In the US, yes: all gambling winnings are taxable income, at your normal federal rate of 10% to 37%, plus state tax in most states. In the UK they are not taxed, and in Canada they are tax-free for casual players.
How much tax is taken out of a casino win?
For slots, bingo and keno, usually nothing is withheld, though you still owe the tax. For lotteries and bets paying at least 300 times the stake, 24% is withheld when the win, minus the stake, is over $5,000. The tax you actually owe depends on your bracket.
Do I pay tax on online casino winnings?
Yes, in the US. Online casino and sports betting winnings are taxed the same way as wins in a land casino, and you must report them even if the site sends you no form.
Can I deduct gambling losses?
Yes, if you itemize. From 2026 you can deduct 90% of your losses, up to the amount you won. You need records, such as a gambling diary and casino statements, to back it up.
Do I have to report winnings under the W-2G threshold?
Yes. The $2,000 W-2G threshold only decides when the casino or sportsbook sends a form. Every win is taxable income and goes on your tax return.
Are sports betting winnings taxed the same?
Yes. Sports betting winnings are taxed as ordinary income, just like casino wins. A W-2G is issued when a win is at least $2,000 and at least 300 times your stake.
Is it better to take the lump sum or the annuity?
It depends on you. The annuity pays more in total over 29 years, while the lump sum gives you less money now that you control. In our $100 million example, the lump sum only comes out ahead if you can earn more than about 5.3% a year after tax.
