Don’t Be Surprised by a W-2 G from Your Sports Betting App

On September 1st 2019 our great state of Indiana legalized sports betting. Many Hoosiers have taken advantage of this new law. In fact, data shows that Indiana sportsbooks accepted $35.2 Million in bets during the first month of legal sports gambling. This isn’t including online mobile sports betting which began in Indiana on October 3rd 2019.  During that second month of legalized sports betting, almost three times more money was wagered than the prior month. This is due to $48 million in bets coming from mobile sportsbooks apps.

I know many people who have downloaded apps such as DraftKings Sportsbook on their smartphones which allows them to bet online on their mobile devices, computers, etc.  Mobile sportsbooks apps will send you a W-2G if you win over $600.

Per the IRS code, taxpayers must report all gambling winnings on the other income line of the Form 1040. Gambling losses can only be deducted up to gambling winnings but here is the kicker, gambling losses are only deducted on Schedule A. So, if you don’t itemize, you can’t deduct any gambling losses from your gambling income. This is a big issue since the Standard deduction doubled back in 2018.

Before you engage in mobile online sports betting, you must understand the tax consequences. For easy math purposes, let’s say you win $2,000 on a mobile sports bet on an NFL game and you paid $1,000 to make the wager. You must report all $2,000 as gambling winnings and the $1,000 of gambling losses can only be deducted if you itemized on your tax return.

The legalization of online sports betting has made it so simple for taxpayers to place bets and make extra side money. Please come see one of our CPAs at SBS CPA Group so we can help you understand the tax consequences of online sports betting.

Call us at 260-407-5000 and schedule an appointment at your convenience.


Tanner Roberson, CPA


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