Sports Betting Taxes

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Sports betting is an excellent pastime and sometimes even a great way to make a buck. Often overlooked, however, is that there are sports betting taxes on all winnings, big or small. That’s because these winnings are regarded as taxable earnings. So, if you stay on the right side of Uncle Sam, read our PA sports betting taxes guide. And before you bet, make sure you know how to bet on sports.

sports betting taxes

Are Sports Betting Taxes a Thing?

When it comes to sports betting taxes, the state of Pennsylvania belongs to those with a higher percentage. In other words, if you want to claim ceratin winnings from betting in PA you will have to pay a 24% gambling winnings tax to the government. Not paying tax on bet winnings is illegal. 

In addition, when a bettor decides to take the bet winnings, the casino or sportsbook should provide a W-2G Form. Even if that doesn’t happen, the gambling tax law on betting winnings will still apply to the reported gambling winnings. With a form or without it, any bettor is obliged to pay the sports betting taxes for reported gambling winnings to the IRS. 

Reporting Gambling Winnings for Sports Betting Taxes

When the tax day comes you are obliged to submit all your income reports to the federal government. Keep in mind that you should include your PA online sports betting winnings on your tax return, too. As a matter of fact, it is illegal not to include them in your annual filing according to the IRS. 

Moreover, not paying your sports betting taxes can lead to different financial penalties. All the reported gambling winnings will be available to the IRS to compare it with your own reports. If you don’t want to pay fines you might as well pay your taxes on time. Avoiding to report your winnings as a part of your income can get you in some trouble. So, be wary of gambling winnings tax. 

Track Your Bet Winnings for Sports Betting Tax Time

First of all, rookie bettors should be aware of the importance of winnings management. If you are planning to bet on sports events there is a possibility that you win or lose. Having a proper bankroll strategy is an essential part of sports betting. 

Secondly, the reason behind all of this is to avoid getting out of control and spending more than you initially planned. Another good reason to keep track of your winnings is to know how much you will need to pay for sports betting taxes. Once you realize that winnings management is a priority, you will be a responsible bettor. 

If you failed to start tracking your winnings from the start, don’t worry. You will probably be able to see it at the operator’s website or request a report at the casino. Usually, most of the sports betting brands will keep the user’s transactions data for a long time. You will need it to calculate your bet winnings tax.

Bet Winnings Tracking Methods

In fact, there are so many ways you could do this from writing it down on a piece of paper, a word processor document, etc. In essence, the only important thing is to keep track of your funds regardless of the method. 

So, if you are interested in the proper management of your transactions you can opt for Excel spreadsheets. This way you will be able to enter data manually on a regular basis. Another option is to use an online tool made to help you control your winnings. You can visit some popular sports betting forums and get a few tips from the bettors around the world. 

Using some of the best PA sportsbook apps such as SugarHouse will facilitate your winnings tracking, so when choosing one choose carefully. Remember, you should include the following in your bet winnings tax spreadsheets. 

  • Date and time of the bet 
  • Name and location 
  • Bettor and operator name 
  • The amount won/lost
  • Betting tickets
  • Payment records

Changes to Gambling Tax Laws

There have been some important changes in the sports betting bill in Pennsylvania over the last couple of years. The government passed legislation which made sports betting legal in 2017. However, the government also introduced too high of a fee for both casinos and bettors. But, it seems that the betting enthusiasts in PA somehow managed to keep the sports betting alive. 

Additionally, the bettors will notice some recent changes when they begin their annual filing for gambling winnings tax. There have been some changes in The Tax Cuts and Jobs Act. In short, some of the deductions that used to be a  2% floor of adjusted gross income will be eliminated. Anyhow, this is not the case when a deduction for gambling losses is concerned.

Professional Bookie? Register Your Bet Winnings Job

As we already stated, sports betting can be recreational but there are wagerers take this activity rather seriously. Professional bettors are usually regarding the sports betting winnings as their main source of income. In that case, there is a special protocol which includes a special kind of gambling tax and which makes this type of earning legal.

Correspondingly, all the bettors taking gambling to this level will have to apply as a registered business. This includes filing with a Schedule C form as which will affect their expenses and change the type of sports betting taxes. Keep in mind that avoiding to file for gambling winnings tax as a business owner can result in you being charged with a fine. The same goes for neglecting your gambling tax as a professional sports bettor in PA. 

Prepare Your Sports Betting Taxes Ahead of Time

With so many changes happening in the sports betting market, all the newbie bettors should be prepared for anything. If you are one of them, the best advice is to start filing for your annual betting taxes. Once again, make sure that you don’t miss any of the winnings from your previously tracked records to avoid getting penalized. 

Another great advice for rookies in sports betting is to keep as many documents and proof of their transactions and winnings. When it comes to tax return all the wagerers need to have all the legal proof they can use in case anything unexpected happens. 

Let’s not forget to mention that you should put a certain amount of money aside as you will need it to pay the taxes. Not being able to pay your sports betting winning taxes in time can lead to some unexpected expenses for underpayment interest or fines. Plus, it is much easier to manage your budget in time and set aside a smaller amount of money each month. 


There are a lot of sports betting obligations and responsibilities you need to keep in the back of your mind. Learning how to read odds, and how to bet on sports is not the only important part of sports betting.

Paying sports betting taxes for your reported gambling winnings is important, as the fines for failing to comply with these regulations will be high. So, keep a record of your winnings, stay informed of the law changes and pay your bet winnings tax.

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