US Gambling Taxes By State 2025

Gambling tax rates in The Grand Canyon State are currently set by Arizona’s Department of Gaming. All gambling businesses are charged:

• An 8% tax rate on retail sports betting operations
• A 10% tax rate on online betting operations

There’s also an Arizona state tax on gambling winnings imposed on players, as gambling winnings in AZ are considered “income” – which means you must report all winnings on both state and federal tax returns. This applies regardless of whether you have received a W2G.

So, what is the gambling tax rate by state in Arkansas? Well, gambling winnings are classed as fully taxable – which means if you are a Natural State resident, you’ll need to report any winnings on your tax return. You can do this using form AR-OI via the following lines:

• Line 4 for “gambling winnings”
• Line 5 for “lottery/contest winnings”

The Arkansas state tax on gambling winnings, which applies largely to casino gaming, is payable at a rate of 13% on the first $150 million of casino gaming receipts, then 20% thereafter.

California is another state where winnings are treated as normal income. The rate of California state tax on gambling winnings you’ll need to pay can range from 1% to 13.3%.

As we’ve seen, the gambling tax rate by state differs depending on where you are in the US. In Colorado, you’ll be expected to pay 10% of all casino and sportsbook winnings to the state.

The money made via the Colorado state tax on gambling winnings reportedly goes toward the state’s Colorado Water Plan.

In Connecticut, state law requires operators to withhold 6.99% of all gambling winnings that are deemed as either:

• Reportable for purposes of federal tax
• Subject to federal withholding tax

In short, this means that while you may have to report your gambling activities to the state as part of your tax return, you won’t directly pay a Connecticut state tax on gambling winnings.

In The Blue Hen State, 50% of lottery monopoly revenue is taxed via a revenue-sharing model, which sees revenue shared between the state and operators, making Delaware state tax on gambling winnings a little different to the tax policies we’ve seen elsewhere.

Ordinarily, Illinois imposes a flat, 4.95% tax rate on all income, which reportedly includes gambling winnings. On top of this Illinois state tax on gambling winnings, you may need to pay federal taxes ranging from 10-37% depending on your income level.

In Indiana, there is a personal income tax rate of 3.23% and almost all gambling winnings are subject to this. That said, before filing your Indiana state tax on gambling winnings it’s worth noting that:

• Casinos will usually withhold 24% of your winnings for tax purposes already
• All winnings must be reported – including those under $5,000
  

As in several other states, gambling is taxed both locally and federally in Iowa. The Hawkeye State’s latest rules dictate that

• 5% of gambling wins are withheld for state purposes
• 24% is withheld for federal taxes

You’ll need to report your winnings as part of the Iowa state tax on gambling winnings rules.

Sports betting went legal in Louisiana in October 2021. The gambling tax rate by state here is:

• 10% for in-person sports wagers
• 15% for mobile and online sports betting

You’ll pay a Louisiana state tax on gambling winnings at the relevant LA rate of income tax.

Marylanders need to be most concerned about lottery winnings – as 24% will be deducted in federal tax and 8.95% in state tax. You must also pay a Maryland state tax on gambling winnings derived from racetrack betting and other forms of gambling.

In The Bay State, you’ll need to pay a Massachusetts state tax on gambling winnings of 5% – which is the same rate regular income attracts.

Michigan residents pay a state tax rate of 4.25%. At the time of writing, the Michigan state tax on gambling winnings is the same.

If you live in The Hospitality State, there’s a 3% tax levied on gambling-related winnings received from all operators licensed under the Mississippi Gaming Control Act.

A percentage of your winnings that meets the Mississippi state tax on gambling winnings requirements will be withheld by the operator in question.

In Montana, the Montana state tax on gambling winnings comes in at a rate of revenue minus management fees.

The Nebraska state tax on gambling winnings follows a “retail only” model with a tax rate of 20%.

Multiple, mobile, and retail gambling are subject to taxes in Nevada. Gambling winnings will attract tax at graduated tax rates. The latest rates are:

• 3.5% on winnings below $50,000
• 4.5% on winnings between $50,000 and $134,000
• 6.75% on winnings of more than $134,000
  

Gambling taxes by state are often difficult to grasp, but the outlook in NH is pretty straightforward.

In short, a New Hampshire state tax on gambling winnings of 10% is imposed on all residents, regardless of where their winnings derive from.

NJ has a New Jersey state tax on gambling winnings rate of 3% (the same as income tax), but withholding rates can differ, as follows:

• 5% for lottery winnings from $10,001 to $500,000
• 8% for lottery winnings of more than $500,000
• 8% for lottery winnings of more than $10,000 where a taxpayer ID is not provided

You should include any gambling-related winnings under the category of “net gambling winnings” when filing your tax return.

In The Empire State, all gambling winnings are taxable and subject to a 24% federal tax rate on top of an NY state gambling tax rate, which can range from:

• 4% for up to $8,500
• 4.5% for between $8,501 and $11,700
• 5.25% for between $11,701 and $13,900
• 5.90% for between $13,901 and $21,400
• 6.09% for between $21,401 and $80,650
• 6.41% for between $80,651 and $215,400
• 6.85% for between $215,401 and $1,077,550
• 8.82% for above $1,077,550
  

As far as gambling tax rates by state in NC go, your gambling winnings are usually subject to a flat rate of 24%.

The Ohio state tax on gambling winnings all comes down to withholding. Ohio licensed casinos must automatically withhold 4% of any winnings.

It’s mainly federal taxes you’ll have to worry about in Oregon, but lottery winnings are also taxed at state-level if you win $600 or more, so be careful.

The Pennsylvania state tax on gambling winnings comes in at 3.07%, and all winnings should be reported via form PA-40, Schedule T.

Whether you’re playing with an up-and-coming provider or the very best PA online casino, any winnings of more than $5,000 will be withheld by your operator.

24% federal taxes and a 5.99% Rhode Island state tax on gambling winnings apply in RI.

Gambling winnings in Virginia attract a Virginia state tax on gambling winnings that can range from 2% to 5.75% depending on your unique situation.

In West Virginia, anything you win via gambling/lottery activities is deemed taxable. The West Virginia state tax on gambling winnings you’ll pay can range from 3 to 6.5%.

Over in The Cowboy State, all legal sports betting activities are taxed at a rate of 10% of net proceeds.