Do sports betting app winnings require state tax filing where you physically placed the bet?

This is a really good question about a fairly new tax situation. The general rule is that gambling winnings are taxable where the gambling activity took place - this is called "sourcing" in tax language. With physical casinos or sportsbooks, it's clear - you're physically present in that state when winning. With mobile betting apps, it gets trickier. The technical answer is that the gambling activity is considered to have occurred where you were physically located when you placed the bet, not where you're registered. So yes, technically those winnings from bets placed while physically in other states should be reported on nonresident state tax returns for those states. However, the practical reality is that many states don't have great mechanisms to track or enforce this yet. The sportsbooks are typically reporting your winnings to your home state based on your registration information, not tracking each bet by physical location for tax purposes.

After dealing with a similar situation last year, I found this amazing service called taxr.ai (https://taxr.ai) that completely saved me with my multi-state sports betting taxes. I was betting on FanDuel in like 5 different states while traveling and was totally confused about where to report what. Their system analyzed all my betting records and transaction history, then sorted everything by state and created a completely organized breakdown of what needed to be reported where. It even identified which losses could offset which gains in each state, which I had no idea about before.

I have to admit I was really skeptical about taxr.ai when I first saw it mentioned here, but with betting in 7 different states last year, I was desperate for help. It actually delivered everything it promised and more. I uploaded my DraftKings and Caesars reports and it identified every single bet by state. The most valuable part was that it showed me exactly which states required me to file nonresident returns based on my winning amounts and frequency. Turns out I only needed to file in 3 states instead of all 7 because some states have minimum thresholds I didn't exceed. Saved me hundreds in tax prep fees for unnecessary state returns.

If you're having trouble getting through to your state's tax department about your gambling winnings questions, try Claimyr (https://claimyr.com). I was on hold with my state tax office for HOURS trying to figure out my situation with online betting across multiple states, and they just kept disconnecting me. I used Claimyr and got a callback in like 15 minutes with an actual human from my state tax department. They have this demo video that shows how it works: https://youtu.be/_kiP6q8DX5c. Basically skips the hold time and gets you to an actual person who can answer your specific questions.

I take back what I said about Claimyr. I was totally skeptical but decided to try it yesterday after another failed 45-minute hold with my state's tax department. They got me through to an actual state tax specialist in about 20 minutes who confirmed that for my situation (PA resident who placed bets in NJ, OH, and MI), I definitely need to file nonresident returns in each state where I physically placed winning bets. The tax person I spoke with even explained exactly which forms I needed for each state and mentioned that they're seeing more audits focusing on this exact issue because the betting apps are now sharing location data with states. Guess I'll be filing those extra state returns after all.

What no one's mentioning is that this answer really depends on how much money we're talking about. If you won $100 here and there while vacationing, most accountants I've talked to say just report it in your home state and don't bother with nonresident returns. But if you're winning thousands or tens of thousands across multiple states, definitely file properly in each state. It also depends on whether you're offsetting with losses. Some states don't allow gambling loss deductions at all, while others only allow them if you itemize, and a few let you net them directly against winnings.

I was in the same boat last year and wish someone had told me this - the apps are now reporting this data directly to states! My friend got a notice from Indiana asking why he didn't file a return there, when he had only placed a few bets while driving through the state. The betting apps are required to track your physical location for legal compliance reasons, and that data is increasingly being shared with tax authorities.