Sports Betting Taxes By State 2025: Updated US Gambling Taxes Guide By Experts

Arizona state tax on gambling winnings is based on your total annual winnings. This means that the gambling tax rates by state here can be:

• 2.59% at the lowest end (0 – $26,501).
• 4.50% at the highest end ($159,000+).

So, all you need to do is add your winnings to your expected income and pay the percentage that would typically apply.

According to the state’s Gaming Association, Arkansas state tax on gambling winnings here is also based on a person’s annual taxable income. This means you can be charged:

• • 2.0% at the lowest end ($5 000 – $9,999).

• 5.5% at the highest end ($84,500+).
  

California state tax on gambling winnings is no different from many other gambling tax rates by state in that it is considered a part of your income taxes. You can be charged:

• 1.0% at the lowest end (0 – $8,809).

• 13.3% at the highest end ($1,000 000+).
  

Colorado state tax on gambling winnings doesn’t stray from the pattern of being based on your annual income tax. However, individual taxation in the Centennial State is flat and doesn’t rise based on how much you’ve won. So, no matter how much you get, you’d be paying:

• 4.63% of your total income.
  

Like Colorado, a flat income tax is imposed on all Connecticut state tax on gambling winnings. According to state law, the CT Lottery is required to charge a rate of:

• 6.99% on gambling winnings.

This gambling tax rate by state applies to all winnings that are reportable for federal tax purposes or subject to federal tax.

The Delaware state tax on gambling winnings is based on the state’s income tax rate. Because the state’s income tax is graduated, this means gamblers from the Diamond State might have to pay:

• 2.2% – 5.5% if you make $60,000 or less

• 6.6% if you make more than $60,000.
  

Illinois state tax on gambling winnings is set at the exact figure as the state’s individual annual income tax rate. Like most states on this list, The Land of Lincoln considers gambling winnings to be personal income. This means that you will only be expected to pay at a flat gambling tax rate by state of:

• 4.95%, regardless of how much you win.
  

One of the list’s lowest flat income tax rates belongs to the Hoosier State. The Indiana state tax on gambling winnings is set at a very modest:

• 3.23% for all winnings.

This makes Indiana one of the most gambling tax-friendly states on our list.

As a state with a very lively gambling culture, fostered by the presence of several popular casinos, poker rooms, and bookmakers, the Iowa state tax on gambling winnings is very fair. You can expect to pay:

• 5% flat tax on all winnings in the Hawkeye state.

While this isn’t the best gambling tax rate by state, it certainly can’t be deemed unreasonable.

In the Bayou State, gambling winnings are considered to be individual income. This means that the Louisiana state tax on gambling winnings is set at:

• 6% if the winnings are required to be withheld under federal law.
  

Maryland state tax on gambling winnings is higher than many other states on our list. Even though Maryland has graduated tax rates, residents of the Free State are subject to a flat tax rate of:

• 8.75% on all gambling winnings.
  

The Massachusetts state tax on gambling winnings (the income tax rate) has not changed in over 20 years, except in 2019, when it changed from 5.05% to:

• 5%, which is required for any winnings reportable to the IRS.

However, if you win less than $8,000 a year, you will not need to file a state income tax return.

Since 1 October 2012, the Michigan state tax on gambling winnings has stayed at a flat rate of:

• 4.25% for all gambling winnings.

This rate applies even if the amount won is less than the amount reportable to the IRS and applies to any funds won at casinos, race tracks, or charitable gambling platforms.

Unlike the other states on this list, gambling winnings are not considered income in Mississippi. However, that does not mean that the state does not impose a gambling tax. The Mississippi state tax on gambling winnings is set very low:

• 3% non-refundable withholding tax.

As far as gambling tax rates by state go, Mississippi is among the best.

According to the state lottery and sports wagering commission, Montana state tax on gambling winnings is set at a flat rate of:

• 6.9%, which is to be deducted and withheld.

While not on the lower end of the spectrum, this rate can be considered fair compared to the states, which can reach over 8% tax.

The Nebraska state tax on gambling winnings is set at the same rate as the state’s income tax. Residents of this state could expect to be paying:

• 2.46% if you win up to $3,340.
• 6.84% if you make more than $32,210.
  

Despite being widely recognized for all the fantastic gambling opportunities in Las Vegas, the Nevada state tax on gambling winnings isn’t remarkably low for residents. Based on the state income tax, you could pay:

• 3.5%, if you win $50,000 or less.

• 4.5% if you win between $50,000 and $134 000.
• 6.75% if you get more than $134,000.
  

Residents of New Hampshire will be happy to hear that there is no New Hampshire state tax on gambling winnings. The 10% state gambling tax was abandoned in 2011, and it was short-lived, as it had only been introduced in 2009. At the time, there weren’t many gambling opportunities, except horse race betting and lottery draws.

In recent years, New Jersey has come to earn a place as one of America’s major gambling centers. This is not only reflected in the growing number of gambling options residents of this state have but also in the New Jersey state tax on gambling winnings. Both residents and non-residents of the state are expected to pay:

• 3% tax on their gambling payouts.
  

In the last 10 years, gambling has dramatically grown in New York State. This has been driven mainly through supportive legislation such as the Expanded Gaming Act, which provided for the opening of commercial casinos on top of pre-existing native establishments. As we speak, the NY state gambling tax rate is set between:

• 4% at the lower end.
• 8.82% at the higher end.
  

North Carolina’s income tax rate fluctuates every couple of years, with new figures being announced regularly. This means that the North Carolina state tax on gambling winnings also fluctuates, as gambling payouts are regarded as income in this state. As it stands, the 2022 gambling tax is:

• 4.99%, though this is likely to be updated next year.
  

Ohio state tax on gambling winnings is currently set at a very decent rate of:

• 4% for any and all winnings that are reportable to the IRS.
  

With the Beaver state’s love of charity gaming, lotteries, tribal casinos, and horse racing, you’d expect the Oregon state tax on gambling winnings to be on the low side. However, the state imposes an:

• 8% tax on winnings worth over $600.

While this is quite the high gambling tax rate by state, the silver lining is winnings under $600 are not taxed at all.

Pennsylvania is another one of the few states whose state income tax is separate from the Pennsylvania state tax on gambling winnings. The state levies a

• 3.07% on all gambling income.

This is to be reported on the PA-40 Schedule T and applies to all forms of gambling, including sports betting in Pennsylvania and casino gaming.

The Rhode Island state tax on gambling winnings varies, depending on your overall annual income, with the lowest being set at

• 3.75% for up to $65,250.

• • 4.75% for income between $65,250 and $148,350.

• 5.99% for income over $148,350.
  

The Virginia state tax on gambling winnings is a bit more complicated than most other state gambling taxes. You are expected to pay

• 2% if you win $3,000 or less.
• 3% + $60 for between $3,000 and $5,000.
• 5% + $120 if win between $5,000 and $17,000.
• 5.75% + $720 if you get over $17,000.
  

West Virginia state tax on gambling winnings also depends on how much you earn annually. The rates are as follows:

• 3% for income up to $10,000.
• 4% for income between $10,000 and $25,000.
• 4.5% for income between $25,000 and $40,000.
• 6% for income between $40,000 and $60,000.
• 6.5% for income over $60,000.
  

Wyoming is one of the few states without any casinos. This means that, by extension, there is no Wyoming state tax on gambling winnings. However, the 24% federal tax is still expected to be paid on any winnings made while gambling in other jurisdictions.