Super Bowl LX Gambling 2026: Expert Explains Tax Rules Every Winner Must Know
Written by
Martin Dasko
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Cory Dudak
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It was noted that since the U.S. Supreme Court decided in 2018 to allow states to determine whether to legalize sports betting, 38 states and Washington, D.C. started to allow some form of sports betting. The American Gaming Association (AGA) noted 75% of Americans support legal sports betting in their home state, and 90% viewed it as an acceptable type of entertainment.
Prior to 2025’s Super Bowl LIX, the American Gaming Association (AGA) estimated Americans would legally bet $1.39 billion on the game. In the summer of 2025, the AGA estimated Americans would wager a record $30 billion during the season through legal U.S. sportsbooks.
Here’s what you need to know about the tax implications of winning pools and prizes from sports betting.
Income From Gambling Is Taxable
Since the IRS treats sports betting as gambling, income earned through it is taxable. An article on Kiplinger pointed out it doesn’t matter how you earn money from gambling since the IRS expects you to report all income on your federal tax return. This can include online sports betting, casino play or lottery winnings.
Here’s what’s considered to be taxable in terms of gambling, according to the IRS: “Gambling income includes but isn’t limited to winnings from lotteries, raffles, horse races and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips.”
The payer (casino, online sportsbook or state lottery) is required to issue you an IRS Form W-2G. If you don’t receive a Form W2-G from the payer, the IRS expects you to report your income from winnings as “other income” with a Form 1040. If the winnings exceed a certain amount, the payer may withhold 24% for tax purposes.
Asher Rubinstein, a tax attorney and partner at Gallet Dreyer & Berkey, noted all gambling winnings are considered “other income” and reportable to the IRS on Form 1040, Schedule 1. You have to report both cash winnings and non-cash prizes.
The IRS Expects You To Declare All Earnings From Gambling
Rubinstein explained that even the income from winning a sports bet among friends should be reported to the IRS.
“There’s no minimum threshold below which winnings are not reportable,” he explained. “However, practically speaking, if we are talking about cash bets between friends, it would be difficult for the IRS to know about [it].”
Here are some additional scenarios that could pop up with sports betting and taxes:
1. The Office Pool
Similar to the bet between friends, you’re technically required to report winning the office pool to the IRS. Rubinstein acknowledged again, however, that it would be difficult for the IRS to learn about the office pool.
2. Casino or Sports Betting Website
Rubinstein emphasized you must report these winnings because the casino or website will report them to the IRS.
“You will get a Form W-2G or 1099-Misc, which the IRS also gets, so the IRS will already know you’ve won,” he elaborated. “You have to put it on your tax returns and tell the IRS about it, even though the IRS already knows about it.” Therefore, if you don’t report the winnings, there could be penalties and interest.
3. Payer Withholds Taxes
Rubinstein noted that if the winnings exceed $5,000, the casino or sportsbook will withhold 24%. He warned that the issue here is if you’re a high-income taxpayer, your tax bracket could be 37%, in which case you would owe even more than what was withheld. You should save some of the winnings for future taxes.
4. Winnings in Digital Currency
Another common scenario involves your sports winnings from a pool being delivered via an anonymous digital asset, such as cryptocurrency. Rubinstein noted that the winnings remain reportable and taxable, even when received in crypto.
“Digital asset trading platforms and exchanges, payment processors and hosted wallet providers report crypto transactions to the IRS and issue Form 1099-DA to their clients, so the IRS will have that information already,” he warned. “The IRS has successfully gone after exchanges, including Kraken and Coinbase, for information about users whom the IRS suspects may not have reported crypto income.”
States Have Different Approaches to Gambling Earnings
It’s important to point out that while the IRS expects you to claim your earnings on your federal tax return, every state has its own set of guidelines. Kiplinger noted states like Nevada and Florida don’t tax your gambling earnings because they don’t have a state income tax. However, New York takes a 10.9% cut of lottery winnings. Your taxes from gambling will depend on the state you live in.
What if You Lose Money Betting on Sports?
Many people will likely wonder whether they can “write off” losses from sports betting. Where that is concerned, Rubinstein said that you can itemize your deductions.
“You used to be able to offset your gambling losses against gambling winnings, but under the new tax law enacted in 2025, now you can only offset 90% of losses against gambling winnings,” he clarified. You also can’t apply gambling losses to non-gambling income.
Kiplinger advised keeping good records so you can show the IRS the amount of winnings you had, your losses, dates, places and payers connected to your gambling. As always, it’s advisable to consult with a tax professional if you’re confused about your tax situation due to gambling, since you don’t want to be stuck with hefty penalties and fines.
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