A brief overview of gambling taxes in New York
Bettors in the state of New York have plenty of options these days, from pari-mutuel horse racing betting and land-based casinos, through to the latest mobile sports betting sites that have recently gone live. And not surprisingly, this has led to plenty of questions from Empire State gambling fans, such as “Is WynnBET legal in New York?” and “What’s the gambling age in NY?”
Of course, these are questions we’re more than happy to answer, but we also feel the need to advise our site visitors about the need to take into account their responsibilities when it comes to paying their gambling taxes. We’ll help you to make sense of the online gambling tax NY laws so that you understand exactly what’s required of you – and that should ensure you don’t run into any unexpected requests for money from the IRS further down the line – after all, nobody wants that!
New York aims to raise money from gambling
Online sportsbook operators have already realized just how much money the state aims to raise from gambling, with some of the steepest operator taxes across all of North America. But if you thought it was only the operators that are subjected to tax demands, you’d be wrong! Bettors may not have to pay the same rate as the operators – in fact, far from it – but that doesn’t mean they can escape without contributing anything at all towards the state’s coffers, as we’ll explain.
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Current gambling taxes in New York
Before going any further, it’s important that you understand your responsibilities when it comes to declaring your gambling winnings and paying taxes on them. Sweeping the matter under the carpet and hoping for the best won’t cut it with the IRS, so it’s important to establish how much you’ll have to pay in the way of taxes from any winnings accrued from gambling activities in the Empire State. Some gambling establishments may help you out by deducting a proportion of your winnings for you, but this isn’t something that you can rely on – and it certainly won’t serve as an excuse if you’re deemed to be tax dodging!
The thresholds for paying NY income tax on gambling winnings
Of course, you don’t have to report every $1 win to the IRS, but if you enjoy betting regularly in New York – or if you land a big win – these are the thresholds you need to know about for tax declaration purposes:
- Horse racing: $600 (assuming that’s 300x your stake)
- Slot machines: $1,200
- Bingo: $1,200
- Keno: $1,500 (less the amount of your wager)
- Poker: $5,000 (less the amount of the buy-in price or stake)
Bear in mind that these amounts are subject to change, so we suggest you double-check that nothing has changed before completing a tax return. If in doubt, we strongly recommend asking advice from a tax specialist, particularly if you gamble regularly. It may cost you in the short term, but it’s money well spent if it avoids the chance of a fine, or of paying interest on any monies owed to the IRS.
Sports betting tax rates in New York
Obviously, it’s still incredibly early days for mobile sports betting in the Empire State, with the first sportsbooks only going live in January 2022. Up until recently, sports betting fans could head to a retail sports betting operation located within one of the state’s casinos, where taxes are often deducted by the operator. Alternatively, thousands of keen sports betting fans from New York have been crossing state lines into New Jersey to place online sporting wagers, where different tax rates apply.
Right now, most sports betting fans across New York are more preoccupied with questions such as “Is Bally Bet legal in New York?” or “How do I place a sports bet online?” with scarcely a thought about paying taxes on any winnings. But be aware that betting online leaves a trail which the IRS can quite easily follow. Avoiding taxes is illegal, and could end up costing you dearly, so it’s far better to understand your obligations sooner, rather than later!
Keep records of all your gambling successes in New York
If you only wager very occasionally, and your winnings don’t amount to more than a few dollars here and there, you’re unlikely to be running up a big tax bill. But if you regularly enjoy a bet, or if you land a big win, we strongly recommend keeping details of your bets including how much you staked and how much you won. This makes it much easier to assess your tax commitment over the course of a year, and will help to avoid any errors – after all, you might not remember several months down the line just how much you won on a particular wager. If you’re still not sure of your overall tax commitment, a professional advisor will soon put you right – and as we’ve already mentioned, going down this route could avoid fines or interest payments that drive the costs up even further.
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Where do I report my taxes in New York?
Assuming you’ve been carefully noting down and itemizing all your NY state tax gambling winnings throughout the year, what’s your next step? How do you know whether you need to report them or not? Do you have to pay for advice, or can you do it all yourself?
As is usually the case with gambling in New York, there’s no single solution to suit every bettor. There’s going to be a very big difference between the amount of tax owed by a high roller who visits casinos regularly and places huge spread bets and parlays across several fixtures, as compared to someone who wins $10 on the lottery now and again.
Check out our table above about the thresholds for declaring your winnings, and bear in mind that gamblers in the Empire State have to pay New York state and federal taxes. And there’s a little more to pay if you’re gambling in New York City or Yonkers too, which is why it can be useful to engage a tax advisor to help you.
Some gambling taxes are paid by the operators
There’s a very good reason why gambling operators in New York need to know your Social Security number as part of their Know Your Customer processes when you sign up. This is so that they can inform the relevant authorities on your behalf about any winnings you receive as a result of your gambling activities. In most cases land-based casinos will also fill out Form W2-G on your behalf as well, showing the amount that you’ve won for avoidance of doubt.
Casinos across New York will usually deduct 25% from your total winnings to put towards your IRS tax commitment before they pay you, relieving you of most of the responsibility. We say ‘most of the responsibility’ because you’re personally liable for paying your own taxes, so you can’t expect to rely on the casino cashiers to take care of everything. That’s why keeping detailed written records can save you a lot of time and trouble in the long run. After all, how likely is it that you’ll remember every detail of every wager and every win throughout the year?
New York Legal Betting Guides
New York Legal Sportsbook Guides
Deductions aren’t made for every type of casino wager
Just in case you were thinking that wagering at a casino means the cashiers will do all the necessary tax calculations on your behalf, there are a couple of points that you need to be clear on. The W2-G form presented to the IRS on your behalf by the casino won’t include every win you achieve at the premises. The operator won’t include any winnings achieved from playing table games, including Baccarat, Roulette, Blackjack and Craps, even if you land some seriously big wins.
As we’ve already mentioned, you are solely responsible for keeping the IRS up to speed on all your gambling wins, even if they’re not listed on Form W2-G. Even those small and seemingly insignificant $10 wins should be reported, regardless of whether the casino decides not to include them on their documentation. For complete avoidance of doubt, we recommend that you note down every single win throughout the year, no matter how small. Remember that you’ll be taxed on your total income from the year, so even a few small wins could be enough to make a difference to the amount you’ll need to pay overall.
When considering what is the tax rate on gambling winnings NY tax payers need to be aware of some recent changes. From the start of the 2018 tax year, for taxes filed from 2019 onwards, any additional costs incurred, such as admission and transport expenses, can only be applied to winnings from gambling.
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Gambling operators in New York face heavy taxes
If you’re a New York state resident who’s having to pay out gambling taxes, you might suppose that you’re facing some tax penalties for each and every win you manage to achieve. But spare a thought for the operators, who are subjected to some of the highest taxes across any state in the US.
The sports betting tax rates for operators are a case in point. There was ferocious competition for one of the nine mobile sports betting licenses issued towards the end of 2021, with operators falling over themselves to try and claim one for themselves. But they came at an astonishingly high price, with sportsbooks paying a reported $25 million each for a 10-year license, in addition to $5 million per year to the casino responsible for housing their servers.
New York has the highest sportsbook operator taxes
New York may have decided to permit mobile sports betting, but the state is determined to make a hefty profit from the exercise. Sportsbook operators are being charged a breathtaking 51% of their gross gambling revenues, putting the Empire State on a footing with New Hampshire. As a comparison, here’s what other states are charging:
- New York: 51%
- New Hampshire: 51%
- Pennsylvania: 36%
- New Jersey: 14.25%
Up until this year, sports betting enthusiasts were regularly making the trip across state lines to New Jersey to place sporting wagers, and that was generating some hefty profits for the Garden State. Even though New Jersey only creams off 14.25% in operator taxes, the state reportedly profited to the tune of $46 million during the month of September 2021, exclusively from sports betting. Not surprisingly, New York is hoping to grab a hefty portion of that particular pie, not least by encouraging New York bettors to remain at home and generate extra money for the Empire State instead.
With over 20 million state residents, there’s certainly plenty of potential, with some pundits claiming that up to 20% of all New Jersey sportsbook wagers have been placed by New York sports betting fans – at least up until now! By legalizing mobile sports betting, New York is hoping that those bettors will stay and wager in their home state instead. In fact, experts are suggesting that New York could be bringing in as much as $493 million per year within the next three years, just from mobile sports betting taxes.
As we all know, things can change very quickly in the gambling world, with more states reconsidering their position on all forms of betting, both land-based and online. Who would have thought even just a few years’ ago that New York would be legalizing mobile sports betting? Yet suddenly it’s upon us, and the state’s governors are going to be keeping a close watch on how things pan out. We anticipate that even more sportsbook sites could be issued with licenses in the future, so watch this space!
Remember that we’re always here for you at BallIsLife, ready and waiting to bring you the latest news and reviews for Empire State bettors. Whether you’re asking “What’s the tax rate for New York gamblers?” or “Is Barstool Sports legal in New York?” we aim to bring you the answers, as well as giving you essential information to help and enhance your overall gambling experience in the Empire State. Things can change very fast in the online gambling world, so be sure to bookmark this page and check back regularly to discover all you need to know!
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Winning online gambling tax NY FAQ
💲 Do I have to pay taxes on my gambling winnings in New York?
Are you wondering what is tax rate in NY gambling fans? Then you need to come and pay us a visit here at BallIsLife. As our name suggests, we specialize in all things gambling across the Empire State, including explaining what you need to know about paying tax on your winnings. Save yourself potential fines and interest payments from the IRS by checking this out right now!
✋ Is there a legal obligation to report gambling winnings in New York?
The IRS takes a dim view of anyone suspected of evading taxes, so it’s important to know what your legal requirements are for reporting your winnings. Here at BallIsLife, we’ve got the answers to all your betting-related questions in the Empire State, whether you want to know “What taxes will I have to pay on my gambling winnings?” or “Are online casinos legal in NY?” Come and take a look for yourself – you’ll be glad you did!
❔ Does NY state tax gambling winnings?
Come and check us out at BallIsLife, where we’ve got everything you need to know about the taxation laws for Empire State gamblers. In fact, we’ve got the answers to all your questions about betting in the state, from “How do I make a bet online?” to “Is Betway legal in New York?” With operator reviews, bonus comparisons and insightful advice, we’re your one-stop-shop for all things gambling in the Empire State. Come and take a look!
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