Online Casino Winnings

[gafuller123]

So I have a question about what to expect come tax time.  Since April I've played an online casino app (Acorn Casino) and have won some money.  You purchase coins to spin with (equal to the dollar amount to pay) and use that to bet/spin during the games.  If you don't lose it and have won, you can redeem the winnings.  They then pay out to PayPal. I normally only over deposit $5-$10 at a time, so the amount I end up winning/redeeming when I play is normally under $100 if I don't just lose it.  There are a couple instances where I've won like $120, but never over $600 in a single game.  Over the past 4-5 Months I've redeemed approx $4000 total, unsure of the actual amount I put in.  I'm wondering if I'll end up getting a W2-G from the casino (unsure if they only send them out if single winning is over $600, or cumulative over time is over that amount?) Or, will I just have to wait for the 1099K from PayPal which lists the deposits?

[Mike9241]

you may not get a w2-g and the 1099-K may not report what is required.

online gambling is taxed the same way as gambling at a casino or an airport.

winnings are taxable. the cost of the bet and losses are deductible only if you itemize on schedule A and limited to gambling winnings. 

[gafuller123]

Thanks for your reply.  I've never really done any gambling before so this is all new to me.  I don't really plan on doing any more because I don't want my taxable income to go up.  So does that mean with gambling at a casino/resort, they'd only make you file a W2-G if the winning amount was over $600 at a single time?  I had a feeling what I bet wouldn't really matter since I don't itemize, so I haven't kept track of it.  When you say the 1099k may not report what is required, what do you mean by that?  Also, I just got to thinking about it and if the new threshold for PayPal transactions is $5000 to report, I may not even get a 1099k?

I guess I'll have to make sure to keep track of all the winnings myself just in case, so I have the correct number to report even if I don't get a tax form.

[gafuller123]

Oh boy, I just went down rabbit hole and got myself all sorts of confused.  First, do they only tax the amount that is paid out directly to you?  Say for instance, there were times I added $10 to my account, played and was up to $30 and thought I'd be able to win more so continued playing but eventually lost it all.  That is not counted in my winnings is it, if I was never paid that amount? 

I may be misunderstanding, but I read a response to another question on here that "For online sport betting, it would be the same as the person that puts a card in the slot machine (and wins $1000 at a time, its reported). If the bets are all made from the same account, they will summarize for the year."  I wonder if that would be the same for a casino app (slot games) where I have an account with them.  I don't win large amounts at a time, but over time I have.

[JotikaT2]

If all of your payments and winnings were paid through Paypal, you would be issued a 1099-K for payments received in 2024 if they amount to $5,000 or more.  This threshold will be $600 for payments made in 2025.  Please see this link for more details.

Make sure to keep records of all your winnings and losses so you can report them accurately when it comes time to file your taxes for 2024 (in early 2025). These items should be reported regardless of the amounts.  Please see this link for additional guidance.

@gafuller123