Yes, sportsbook winnings are taxable in New York
Every dollar you win betting on sports is taxable income. That is true whether the sportsbook sends you a tax form or not, and whether you win $50 or $50,000.
New York bettors face up to three layers of tax:
- Federal income tax on all gambling winnings
- New York State income tax
- New York City income tax, if you live in the five boroughs
The state’s 51% sports betting tax is a separate thing. It is charged to the sportsbooks on their gross gaming revenue, not to you.
This page is information, not tax advice. Talk to a tax professional about your own situation.
What changed in 2026: the One Big Beautiful Bill Act
The One Big Beautiful Bill Act, signed in July 2025, made two changes that hit sports bettors from the 2026 tax year.
1. A higher W-2G threshold. For payments made on or after January 1, 2026, the reporting threshold for sports and most other wagering rose from $600 to $2,000. The winnings must still be at least 300 times the wager. The $2,000 figure is indexed for inflation after 2026, according to EY’s summary of the Treasury’s proposed regulations.
2. A 90% cap on loss deductions. For tax years beginning after December 31, 2025, you can deduct only 90% of your gambling losses, and still only up to the amount of your winnings. Before, you could deduct 100% of losses up to your winnings.
The second change matters more. It means a bettor who breaks even for the year can still owe tax.
When does a sportsbook send you a W-2G?
A Form W-2G reports a gambling win to you and the IRS. For sports betting in 2026, the IRS instructions for Form W-2G set two tests, and both must be met:
- Winnings of $2,000 or more, and
- Winnings of at least 300 times your stake
That 300x test means most W-2Gs at sportsbooks come from long-shot bets, such as big parlays. A $1,000 bet on a -110 favorite that wins $909 never triggers a form, however large the stake.
No W-2G does not mean no tax. You must report all your winnings.
Federal withholding: when the sportsbook takes 24% up front
The sportsbook must withhold federal tax at 24% when your proceeds (winnings minus the stake) are more than $5,000 and at least 300 times the wager.
If you don’t give the sportsbook a correct taxpayer ID, backup withholding at 24% can apply to smaller reportable wins too.
Withholding is a prepayment, not your final bill. Federal income tax rates run from 10% to 37%, so if you are in a higher bracket you may owe more when you file.
New York State tax on gambling winnings
New York taxes gambling winnings as ordinary income at your regular state rate. NY State rates top out at 10.9% for the highest earners.
When federal withholding applies to a wager placed in New York, state withholding is required too. Under NY Tax Law §671, it is taken at the state’s top rate, with no allowances.
You report your winnings on your New York return along with the rest of your income.
NYC residents: the city takes a cut too
If you live in New York City, gambling winnings are also subject to the city’s resident income tax, at rates from 3.078% to 3.876%.
Combined with state tax, a high-earning New York City resident can pay close to 15% in state and city tax on winnings, on top of federal tax.
Can you deduct gambling losses in the Empire State?
Yes, but only if you itemize, and only up to your winnings.
Federal: you deduct losses as an itemized deduction. If you take the standard deduction, losses don’t reduce your federal tax at all. From 2026 only 90% of losses count.
New York: New York lets you itemize on your state return even if you take the federal standard deduction, and gambling losses can be included. The new federal 90% rule may affect how much you can claim, so ask your preparer how it applies to your NY return.
Keep records
Download your annual win/loss statement from each sportsbook app, and keep your own log of dates, bets, stakes and results. If the IRS questions your losses, records are your proof.
Worked examples: what NY bettors owe
These examples show reporting and withholding. Your final tax depends on your total income and deductions.
Example 1: a $20 parlay hits
You bet $20 on a 6-leg parlay at +4741 and win $948.20.
- W-2G? No. The win is under $2,000.
- Withholding? No.
- Taxable? Yes. You report $948.20 of gambling income.
Example 2: a $10 long shot pays $4,000
You bet $10 at +40000 and win $4,000.
- W-2G? Yes. It is over $2,000 and 400 times your stake.
- Withholding? No. The proceeds are under $5,000.
- You owe tax on the $4,000 when you file.
Example 3: a $25 long shot pays $7,500
You bet $25 at +30000 and win $7,500.
- W-2G? Yes.
- Federal withholding: 24% × $7,500 = $1,800.
- New York State withholding also applies, at the state’s top rate.
- An NYC resident also owes city tax on the win when filing.
Example 4: the break-even year under the 90% rule
Over 2026 you win $30,000 on winning bets and lose $30,000 on losing bets. You itemize.
- Gambling income: $30,000
- Deductible losses: 90% × $30,000 = $27,000
- Taxable gambling income: $3,000, even though you finished the year even
Under the old rules, this bettor would have owed nothing on gambling.
Example 5: a losing year
You win $10,000 and lose $15,000.
- 90% of losses is $13,500, but the deduction can’t exceed winnings.
- Deduction: $10,000. Taxable gambling income: $0.
- The extra losses can’t offset other income or carry forward.
How “winnings” are counted for sportsbook bets
Your gambling income is the profit on each winning bet added together, not your net result for the year. Losing bets go on the loss side.
So a bettor who places hundreds of bets can have large gross winnings and large losses, even with a small net result. Under the 90% rule, that gap creates taxable income. High-volume bettors are hit hardest.
Tax tips for sports bettors in NY
- Set aside part of big wins. If no tax was withheld, you will still owe it.
- Consider estimated payments after a large win, to avoid underpayment penalties.
- Download statements in January from every sportsbook you used.
- Report every win, including ones with no W-2G.
If betting is costing you more than you planned, our responsible gambling page lists New York’s self-exclusion tools and 24/7 helpline. For the wider legal picture, see our guide to NY gambling laws, and compare licensed apps on our NY sportsbooks page.
NY betting tax FAQ
Do I have to pay taxes on sportsbook winnings in NY?
Yes. All sports betting winnings are taxable federal income and New York State income. NYC residents also owe city income tax.
How much can you win at a sportsbook without paying taxes?
There is no tax-free amount. From 2026, sportsbooks only issue a W-2G for wins of $2,000 or more that are at least 300 times the stake, but smaller wins are still taxable.
Does a sportsbook withhold taxes on winnings?
Only on large long-shot wins. Federal withholding of 24% applies when proceeds exceed $5,000 and are at least 300 times the wager, and New York State withholding applies to the same wins.
Can I deduct my sportsbook losses?
Yes, if you itemize. From 2026, only 90% of gambling losses are deductible federally, and never more than your winnings.
What is the NY State tax rate on gambling winnings?
Winnings are taxed at your normal NY State income tax rate, which tops out at 10.9%. NYC residents also pay city rates from 3.078% to 3.876%.
Does the 51% NY sports betting tax come out of my winnings?
No. The 51% tax is charged to sportsbook operators on their gross gaming revenue. It is not deducted from your payouts.
21+ and physically in New York. Gambling problem? Call or text 1-877-8-HOPENY (467369).