However, this only applies to slots or bingo. W-2Gs are issued for any single jackpot that grosses >$1,200. Most winners are on the 'honor system' to report taxes Gambling losses are only deductible as an itemized tax deduction Any gambling income is the responsibility of the winner to report on their tax return In a land-base casino, the tax rules work as follows: However, upon reviewing all the applicable tax laws I realize that there is a massive flaw in the online system: My tax liability on that (federal + state) is about $15,000 - $11,000 more than my winnings!!Īt first glance, this made no logical sense.
I left the game when I was still up for a total of $4,000 gain.Īfter the game, I saw that they issued me a Form W-2G for each time I 'won' more than $1200 - which add up to gross winnings of ~36,000.
I continued to play, winning some and losing some - fluctuating for about an hour my highest net gain at any point was about $5,000. I made $1800 on the first spin, and the website asked for my SSN (which I gave). I pulled up Roulette (Casino tab) and commenced play: After a short while, I had made a decent amount of money on small bets and decided to take some larger bets. They have a 'Slots' tab and a 'Casino' tab which contains standard table games. I opened an account at and funded it with some money. I happened to be in NJ on 12/21 (I live in NY) and figured I would give the new online casinos a try.
