The short answer
All gambling winnings are taxable, whether or not you get a tax form. Losses only help if you itemize, only up to your winnings, and starting with 2026 returns only 90% of your losses count. Winnings on prediction-market apps like Kalshi, Polymarket and Robinhood are taxable too, but the IRS hasn't said yet how they should be reported.
Last reviewed: October 2026
This page explains how taxes and reporting work. It isn't a recommendation to gamble, bet or trade, and FL Tax Experts isn't affiliated with any casino, sportsbook or prediction-market platform.
What counts as gambling winnings
- Sportsbook bets, in person or on an app
- Casino games, slots, poker and poker tournaments
- Lottery, scratch-offs, raffles and bingo
- Fantasy sports and contest prizes
- Non-cash prizes, like a car or a trip, at their fair market value
Florida has no state income tax, but federal tax still applies. If you won in another state, that state may tax it.
Tax forms: W-2G, and why "no form" doesn't mean "no tax"
Casinos, sportsbooks and lotteries send Form W-2G for larger wins. Starting in 2026 the IRS's minimum reporting threshold is $2,000, and the exact trigger depends on the game. For sports and other wagers, the win generally also has to be at least 300 times the bet. Some large wins have 24% federal tax withheld.
Smaller wins without a form are still taxable. The IRS says to report all gambling winnings on Schedule 1 of your Form 1040.
Losses: the three limits
- You have to itemize. Losses go on Schedule A. If you take the standard deduction, as most people do, your losses don't reduce your tax at all.
- Only up to your winnings. You can't deduct a net loss for the year, and you can't carry it forward.
- New for 2026: only 90%. A 2025 federal law limits the deduction to 90% of your losses, starting with 2026 returns. That means you can owe tax even if you broke even or came out behind.
Example of the 90% rule
You win $10,000 and lose $8,000 in 2026. Before, you'd deduct the full $8,000 and pay tax on $2,000. Now you can deduct only $7,200, so you pay tax on $2,800, even though you only came out $2,000 ahead.
Keep a log. The IRS expects a diary or similar record of each session (date, place, game, amounts won and lost) plus tickets, receipts and your app or player-card statements.
The hidden cost: your AGI goes up
Winnings count in full toward your adjusted gross income (AGI). Losses come off later, on Schedule A, if at all. A higher AGI can mean more of your Social Security is taxed, higher Medicare premiums a couple of years later, or a smaller health insurance (ACA) premium credit, even in a year you lost money overall.
Kalshi, Polymarket, Robinhood and other prediction markets
Prediction markets let you buy "yes" or "no" contracts on events, like who wins the World Series. Each contract pays $1 if you're right and nothing if you're wrong. Platforms such as Kalshi, Polymarket US and Robinhood offer them, regulated by the Commodity Futures Trading Commission (CFTC), not by state gaming boards.
The profit is taxable. What's not settled is what kind of income it is. As of fall 2026, the IRS has issued no guidance on these event contracts. Tax professionals are reporting them in four different ways:
- As gambling. Ordinary income, and losses only if you itemize, capped by the 90% rule. Some analysts think sports contracts look the most like betting.
- As capital gains and losses. Reported on Form 8949 and Schedule D, where net losses can offset other gains plus up to $3,000 of other income a year.
- As "Section 1256" contracts. These get a 60% long-term / 40% short-term split on Form 6781. Many practitioners see this as the most aggressive position, because the law excludes swaps and regulators have described event contracts that way.
- As ordinary income, without the gambling loss rules.
What tax forms you'll get
- Kalshi sends 1099s for things like interest and rewards, but not for your trading profit. That shows up only on the profit-and-loss statement you download yourself.
- Robinhood says it doesn't report event contract trades to the IRS or send a 1099 for them.
- Polymarket US's user agreement covers delivering tax forms such as a 1099-B. Check what it actually sends at filing time.
No form doesn't mean no tax. What to do: download your yearly profit-and-loss statement from each platform, keep a record of deposits and withdrawals, pick one treatment with your preparer and use it consistently, and expect the rules to change once the IRS weighs in.
Hedging or betting both sides
Some people hedge, for example by betting the Rays at a sportsbook and buying a "no" contract on an app, or by holding "yes" on one platform and "no" on another. How that's taxed is unsettled and can get complicated: depending on how each side is treated, a win on one side may be fully taxable while the loss on the other side is limited or delayed. If you hedge across platforms, keep detailed records of when you opened and closed each side, and talk to a tax pro before you file.
And if you bet with crypto
Using bitcoin or other crypto to fund a bet, or to buy contracts, counts as selling the crypto, so you may have a capital gain or loss before the game even starts. Winnings paid in crypto are income at their dollar value when you receive them. See how crypto is taxed.
Official and expert sources
- IRS Topic 419: Gambling income and losses
- IRS: Instructions for Form W-2G
- KPMG: Gambling losses under the 2025 law (90% limit)
- KPMG: Taxation of sports event contracts
If gambling has stopped being fun, the Florida Council on Compulsive Gambling's free, confidential helpline is 888-ADMIT-IT (gamblinghelp.org).
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Disclaimer: This page is general information, not tax advice. Every situation is different, and tax rules change. Reading this page doesn't make you a client. FL Tax Experts is not affiliated with or endorsed by Kalshi, Polymarket, Robinhood or any sportsbook or casino.