Yes, you have to pay taxes on your sports betting winnings. Both the IRS and Ohio Department of Taxation consider gambling winnings taxable income. The good news? It's not as complicated as it sounds—and you can deduct your losses.
This guide covers everything Ohio bettors need to know about reporting gambling income, from the basic tax rates to exactly which forms you'll need.
⚠️ Important Disclaimer
This guide provides general information about gambling taxes. It's not tax advice. Every situation is different. Consult a qualified tax professional for guidance specific to your circumstances.
THE TAX RATES YOU'LL PAY
Gambling winnings are taxed at both the federal and state level:
Tax Rates on Ohio Gambling Winnings
Federal Tax
Ohio State Tax
Here's how it works:
- Federal: Gambling winnings are taxed as ordinary income at your marginal tax rate (10-37%). For large wins, sportsbooks withhold 24% automatically.
- Ohio: The state tax rate ranges from 0% to 3.75% depending on your total income. Gambling winnings are added to your regular income.
WHAT COUNTS AS "WINNINGS"?
This is where it gets a bit nuanced. The IRS considers your "gross winnings" to be taxable—not your net profit.
Example: Session-Based Reporting
A Day of Betting
In this example, you won $40 on the day. But technically, you have $240 in gross winnings (from Bets 1 and 3) and $200 in losses (from Bets 2 and 4).
The IRS expects you to report the $240 in winnings as income. You can then deduct the $200 in losses—but only if you itemize deductions (more on this below).
💡 The Practical Reality
Most recreational bettors report their net winnings for the year rather than tracking every individual bet. The IRS primarily focuses on large wins that generate W-2G forms. But technically, all winnings are taxable—even if no form is issued.
WHEN DO SPORTSBOOKS REPORT YOUR WINNINGS?
Sportsbooks are required to report certain wins to the IRS and withhold taxes automatically. Here are the thresholds:
| Bet Type | Reporting Threshold | Form Issued |
|---|---|---|
| Sports Betting (standard) | $600+ AND 300x the wager | W-2G |
| Slot Machines | $1,200+ | W-2G |
| Poker Tournaments | $5,000+ | W-2G |
| Keno | $1,500+ | W-2G |
| Any gambling win | $5,000+ (withholding) | 24% withheld |
For sports betting specifically, the "300x the wager" requirement is key. A $10 bet that wins $600 meets the threshold (60x, not 300x). But a $100 bet that wins $600 doesn't (only 6x the wager).
What About Wins Under the Threshold?
Just because the sportsbook doesn't report it doesn't mean it's not taxable. The IRS expects you to report all gambling income regardless of whether you receive a W-2G.
That said, the IRS has limited resources and focuses enforcement on large, documented wins. Many recreational bettors with small net profits report their overall results for the year without tracking every individual win.
THE FORMS YOU'LL NEED
Tax Forms for Gambling Income
W-2G (Certain Gambling Winnings)
Issued by the sportsbook for large wins. Shows the amount won and any taxes withheld. You'll receive a copy; the IRS gets one too.
1040 Schedule 1 (Line 8b)
Where you report gambling winnings on your federal return. Even if you don't receive a W-2G, report your winnings here.
Schedule A (Itemized Deductions)
Where you deduct gambling losses. You can only claim losses if you itemize, and losses can't exceed winnings.
Ohio IT 1040
Ohio state tax return. Gambling winnings are included in your Ohio adjusted gross income.
DEDUCTING YOUR LOSSES
The IRS allows you to deduct gambling losses—but there are important limitations:
- You must itemize deductions. If you take the standard deduction ($14,600 for single filers in 2024), you can't deduct gambling losses.
- Losses can't exceed winnings. If you won $5,000 and lost $8,000, you can only deduct $5,000.
- You need documentation. Keep records of your bets, wins, and losses.
🎯 Should You Itemize?
For most people, the standard deduction is higher than their total itemized deductions (including gambling losses). Only itemize if your mortgage interest, state/local taxes, charitable donations, AND gambling losses combined exceed the standard deduction.
What Records Should You Keep?
The IRS recommends keeping a gambling diary that includes:
- Date and type of each bet
- Name of sportsbook or casino
- Amount wagered and amount won or lost
- Running total of winnings and losses
Most sportsbook apps provide downloadable transaction histories that cover this. Download your full betting history at the end of each year for your records.
OHIO-SPECIFIC TAX RULES
Ohio has some specific rules worth knowing:
Ohio Income Tax Brackets (2024)
Ohio uses a graduated income tax system:
- $0 - $26,050: 0%
- $26,050 - $100,000: 2.75%
- $100,000+: 3.75%
Your gambling winnings are added to your regular income, so they're taxed at your marginal rate. If you earn $50,000 from your job and win $5,000 betting, that $5,000 is taxed at 2.75%.
Local Taxes
Some Ohio cities and school districts have local income taxes that may apply to gambling winnings. Check with your local tax authority or a tax professional.
IMPORTANT TAX DEADLINES
W-2G Forms Issued
Sportsbooks must send W-2G forms for reportable wins by this date.
Tax Filing Deadline
Federal and Ohio state tax returns are due (unless you file for an extension).
Estimated Tax Payments
If you have significant gambling income, you may need to make quarterly estimated tax payments to avoid penalties.
COMMON QUESTIONS
Technically, yes. All gambling income is taxable regardless of amount. Practically speaking, the IRS focuses on large wins documented by W-2G forms. Most recreational bettors report their net annual results.
If your total losses exceed your total winnings for the year, you don't owe taxes on gambling. However, you can't use gambling losses to offset other income—they can only offset gambling winnings.
The bonus bet itself isn't taxable income. However, any winnings from a bonus bet ARE taxable. If you use a $200 bonus bet and win $400, the $400 profit is taxable.
Yes, for tax reporting purposes, your "winnings" are your net profit on a bet—not the total payout. If you bet $100 and receive $250 back, your taxable winning is $150.
As an Ohio resident, you owe Ohio tax on all gambling income regardless of where you won it. You may also owe taxes to the state where you placed the bet. Ohio provides credits for taxes paid to other states to avoid double taxation.
TIPS FOR TAX SEASON
- Download your betting history from each sportsbook app at year end. Most provide detailed transaction reports.
- Track wins and losses separately for cleaner reporting. A simple spreadsheet works fine.
- Don't forget about bonus bets—the winnings are taxable even though the "stake" was free.
- Consider a tax professional if you have significant gambling income or complex situations.
- Make estimated payments if you have big wins mid-year to avoid penalties.
✅ The Bottom Line
Most recreational Ohio bettors won't owe much in gambling taxes—especially if you follow the 1% rule and bet responsibly. Keep basic records, report any W-2G income, and you'll be fine. For complex situations or large wins, consult a tax professional.
KEY TAKEAWAYS
- All gambling winnings are taxable—even if you don't receive a W-2G
- Federal rate: Your marginal rate (24% withheld on large wins)
- Ohio rate: 0-3.75% depending on total income
- You can deduct losses—but only if you itemize and only up to the amount of your winnings
- Keep records—download your betting history from each app yearly
📊 Track Your Bets for Tax Season
Good record-keeping makes tax time easier. Check out our bet tracking guide to set up a system that works for both performance analysis and tax documentation.