How do you pay taxes on gambling winnings? Options for casinos, apps, and filing methods

Do you need to keep receipts for the losses? Like if I lose $50 playing poker, should I be asking for some sort of receipt?

Yes, documentation is crucial. For casino gambling, you should keep items like ATM receipts, casino credit records, and win/loss statements (most casinos can provide these if you use a player's card). For poker specifically, keeping a gambling log is essential - date, location, type of game, amount won or lost per session. If you play through apps, take screenshots of your betting history and maintain a spreadsheet tracking all activity. The more detailed your records, the better position you'll be in if questions arise. Many serious gamblers keep a daily diary of all gambling activities for this exact reason.

Does it actually work with all the different betting apps? I use like 3 different ones plus I go to the casino sometimes.

I'm skeptical about these tax tools. Seems like you could just keep track of everything yourself in a spreadsheet. What makes this better than just DIY tracking?

It works with pretty much all the major betting platforms - DraftKings, FanDuel, BetMGM, Caesars, and more. You can either upload statements or connect accounts directly. It pulls everything into one place so you don't have to manually combine data from different sources. The main advantage over DIY spreadsheets is that it automatically applies the correct tax rules. For example, it knows which losses can offset which types of winnings, flags when you might need to file estimated payments, and creates the proper documentation format that the IRS expects. It saved me hours of work and probably prevented me from making some costly mistakes on my taxes.

Wait, how does this actually work? They just wait on hold for you? Seems weird that would be allowed.

This sounds like BS honestly. Why would the IRS talk to some third party service about your tax situation? I'm calling shenanigans on this one.

They don't talk to the IRS for you - that's not how it works. The service basically waits in the phone queue on your behalf, and when they detect a human agent is about to pick up, they immediately connect you to the call. You're the one who talks directly to the IRS agent, not any third party. They use technology to monitor hold patterns and agent availability. Nothing sketchy about it - it's just a way to avoid personally sitting on hold for hours. When the IRS agent comes on the line, it's you and only you talking to them about your tax situation. The service just handles the hold time so you're not chained to your phone all day.

Does this mean if I take the standard deduction, I can't deduct my gambling losses at all? Even if I have proof?

That's exactly right. If you take the standard deduction, you cannot deduct gambling losses at all, regardless of how well-documented they are. This is why gambling taxes can hit casual gamblers especially hard. You have to itemize deductions on Schedule A to claim gambling losses, and for many people, their total itemized deductions (including gambling losses, mortgage interest, certain state taxes, etc.) need to exceed the standard deduction ($13,850 for single filers in 2023) to make itemizing worthwhile. This creates a situation where someone with modest gambling wins but equal losses could still end up paying tax on those winnings.

Technically, comps like free meals, hotel rooms, and show tickets are considered taxable gambling income according to the IRS. However, in practice, casinos rarely issue W-2Gs for these items unless they're extremely high value (like a luxury car or vacation package). For typical comps, the casino absorbs the tax reporting as a business expense. That said, if you're receiving substantial comps (think thousands of dollars worth), you should technically report them as "Other Income" on your tax return to be fully compliant.

This is really helpful advice, Douglas. I'm curious - when you got audited, how far back did they want to see records? I've only been seriously gambling for about 6 months but I'm worried I haven't been detailed enough with my tracking from the beginning. Should I be going back and trying to reconstruct my early activity from bank statements and app histories while I still can?

@Javier Hernandez - They wanted three years of records, which is the standard lookback period for most audits. Since you ve'only been gambling for 6 months, you re'in a much better position than I was! I d'definitely recommend going back and reconstructing what you can from your bank statements and app histories. Most betting apps keep detailed transaction histories that you can export, and your bank statements will show the transfers. It s'way easier to do this now while the activity is recent than to scramble during an audit. The key is creating a consistent system going forward. I now use a simple spreadsheet with columns for date, location/app, game type, amount wagered, amount won/lost, and any supporting documentation. Takes maybe 5 minutes after each gambling session but could save you major headaches later. Pro tip: If you have a players club card at casinos, contact them now to get your historical win/loss statements. Most will provide these for free and they re'excellent documentation for tax purposes.

This is really smart advice about adjusting W-4 withholding! I never thought about using my regular job to cover gambling taxes. Do you know if there's a limit to how much extra you can have withheld? I'm worried about having too much taken out and then waiting months for a refund. Also, does it matter which quarter your gambling winnings come from if you're having extra withheld from paychecks throughout the year?

@Amara Chukwu - There s'no specific limit on how much extra you can have withheld through your W-4, but you re'right to be cautious about overwithholding. The IRS treats all withholding as if it was paid evenly throughout the year for penalty purposes, so it doesn t'matter which quarter your gambling winnings actually come from - as long as your total withholding covers your tax liability, you should be fine. I d'suggest being conservative with the extra withholding amount and maybe doing a mid-year check to see how your gambling income is tracking. You can always adjust your W-4 again if needed. The withholding calculator on the IRS website is pretty good at helping you find the right balance between covering your taxes and not giving the government an interest-free loan with a huge refund. One advantage of this approach over estimated payments is that if you end up having less gambling income than expected, you ll'just get a refund instead of being stuck with missed estimated payment deadlines.

This is such an important point that often gets overlooked! I actually got caught in a similar situation when I had some big wins at a casino in Pennsylvania while living in New Jersey. Both states wanted their cut and it was a nightmare to sort out. One thing that helped me was keeping track of which state each gambling session occurred in, not just the wins and losses. Some states allow you to claim a credit for taxes paid to other states, but you need documentation showing where the income was actually earned. Also found out that some states have minimum thresholds before they require withholding, which are different from the federal thresholds. If anyone's dealing with multi-state gambling, definitely worth talking to a tax professional who understands both states' rules. The cost of getting expert advice upfront is way less than trying to fix mistakes later!

This is a really important distinction that I think catches a lot of casual gamblers off guard! The "constructive receipt" concept is particularly tricky. I'm wondering about app-based gambling - if I have winnings sitting in my DraftKings or FanDuel account that I haven't withdrawn to my bank yet, does that count as "constructively received" for the current tax year? Or is it only when I actually transfer it to my bank account? I tend to leave money in the apps to keep betting with, but if that creates a tax timing issue I should probably change my approach.

@Chloe Robinson - Great question! For app-based gambling like DraftKings and FanDuel, the winnings are generally considered constructively "received as" soon as they re'credited to your account, even if you don t'withdraw them to your bank. The key factor is whether you have unrestricted access to the funds - and since you can withdraw from these apps at any time subject (to normal processing ,)the IRS would likely consider that income received when it hits your app balance. This is different from something like a casino marker situation where there might be restrictions. With betting apps, you have full control over when to withdraw, so leaving the money there is essentially your choice to reinvest rather than a limitation on access. So unfortunately, you can t'defer the tax timing by just leaving winnings in your app accounts. You ll'need to report those winnings in the year they were credited, regardless of when or (if you) actually withdraw them. Definitely something to factor into your record-keeping and estimated payment planning!

This is really valuable information about the professional vs. recreational distinction! I'm definitely nowhere near professional status - this is just side income from occasional casino visits and app betting. But I'm curious about the record-keeping requirements. You mentioned professional gamblers can deduct travel expenses to casinos - does that mean recreational gamblers can't deduct any gambling-related expenses at all, even if they're well-documented? Like if I drive 2 hours to a casino, can I at least deduct the mileage or is that completely off-limits for us casual players?

@Ruby Garcia - Unfortunately, recreational gamblers generally cannot deduct gambling-related expenses like travel, meals, or lodging as business expenses. The IRS is pretty strict about this - if you re'not a professional gambler meeting their specific criteria, these expenses are considered personal expenses rather than deductible business costs. The only gambling-related deduction available to recreational players is the ability to deduct gambling losses up to the amount of gambling winnings, and only if you itemize deductions on Schedule A. So no mileage deductions for your 2-hour drive to the casino, even if you keep perfect records. This is one of the reasons why the professional vs. recreational distinction can be so important for serious players. Professional gamblers get to treat their gambling as a business with all the associated deductions, while recreational players are much more limited. The trade-off is that professional gamblers also have to pay self-employment tax on their winnings and meet much stricter documentation and consistency requirements. For most casual players like yourself, it s'better to just focus on accurately tracking wins and losses rather than trying to stretch for business expense deductions that likely won t'be allowed.