Texas Casino Taxes 2026 – Guide to Gambling Winnings Tax

Last updated: April 2, 2026

Your location: Texas

Tax guide for TX gamblers

💰 NO STATE TAX Texas: 0% state income tax on gambling winnings

💰 Estimate Your Federal Tax Liability

Use our free Texas gambling tax calculator to see how much you may owe to the IRS. Includes support for Sweeps Cash redemptions and crypto winnings.

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Texas Gambling Tax at a Glance

Tax Type	Rate	Notes
Texas State Income Tax	0%	No state income tax. You pay $0 to Texas on gambling winnings.
Federal Income Tax	10% – 37% (marginal rates)	Winnings added to your total taxable income. Rate depends on your tax bracket.
Federal Withholding (backup)	24%	Withheld if winnings exceed $5,000 (or $1,200 from bingo/slots) and you do not provide a TIN.
Self‑Employment Tax	15.3%	Only applies if you are a professional gambler (materially participate full‑time).

Because Texas has no state income tax, you never pay any state tax on gambling winnings, regardless of the amount.

Federal Income Tax on Gambling Winnings

All gambling winnings are considered ordinary income by the IRS. You must report them on your federal tax return (Form 1040, line 8b for other income). Winnings include:

Cash won at offshore casinos and sweepstakes sites
Sweeps Cash redemptions (gift cards, bank transfers, crypto)
Progressive jackpot payouts
Value of any prizes (e.g., electronics, vacations) from sweepstakes casinos
Crypto winnings – valued in USD at the time of receipt

Winnings are added to your adjusted gross income and taxed at your marginal federal income tax rate (10%, 12%, 22%, 24%, 32%, 35%, or 37% for 2026).

Federal Withholding on Gambling Winnings

Type of Winning	Withholding Threshold	Withholding Rate
Slot machines, bingo, keno	$1,200 (slots), $1,500 (keno), $1,200 (bingo)	24% (or 28% for foreign persons)
Poker tournaments	$5,000	24%
Other wagering (sports, sweepstakes, offshore)	$5,000	24%
If you fail to provide a TIN	Any amount	24% backup withholding

If your winnings exceed the threshold, the payer may withhold 24% federal tax and issue a Form W-2G. Offshore casinos and sweepstakes sites often do not withhold, but you are still required to report the income. If tax was withheld, it counts as a credit against your total tax liability.

Deducting Gambling Losses on Your Tax Return

You can deduct gambling losses, but only up to the amount of your winnings, and only if you itemize deductions on Schedule A (instead of taking the standard deduction).

Winning sessions: Report all winnings (even if you later lost them).
Losses: Keep a contemporaneous log of your gambling sessions, including date, casino/site, type of game, amount wagered, and amount lost.
Proof: Bank statements, casino win/loss statements, screenshots, and session logs are essential for substantiating losses in case of an audit.

For sweepstakes casinos, keep records of Gold Coin purchases and Sweeps Cash redemptions. Losses from purchases can be deducted as gambling losses if you itemize.

Learn more in our full gambling tax guide →

Sweepstakes Casino Taxes: What You Need to Know

Sweepstakes casinos like Lucky Creek operate with Gold Coins (free) and Sweeps Cash (redeemable). Tax treatment:

Gold Coins: No tax on play because they have no cash value.
Sweeps Cash redemptions: Taxable as gambling winnings when redeemed. You must report the fair market value of any prize (cash, gift cards, merchandise) as income.
No withholding: Sweepstakes operators typically do not withhold taxes. You are responsible for reporting and paying estimated taxes if necessary.
Losses: If you purchase Gold Coin packages and receive Sweeps Cash as a bonus, the cost of the package can be deducted as a gambling loss (up to winnings) if you itemize.

For more details, see our casino glossary.

Taxes on Cryptocurrency Gambling Winnings

The IRS treats cryptocurrency as property. If you win crypto (e.g., Bitcoin) at an offshore casino, you must report the fair market value in USD on the date you receive it as gambling income. Additionally:

If you later sell or exchange the crypto, you may have capital gains or losses (short‑term or long‑term).
Use tools like CoinTracking or Koinly to track your crypto transactions.
Losses from crypto gambling are deductible only as gambling losses (not capital losses) up to the amount of winnings.

Read our crypto gambling guide for more.

How to Keep Records for IRS Compliance

To substantiate your gambling income and losses, maintain:

Session logs: Date, casino/site, game, starting balance, ending balance, and total win/loss for each session.
Win/loss statements: Request annual statements from casinos (offshore sites often provide them).
Bank statements: Show deposits and withdrawals.
Form W-2G: Keep copies of any tax forms received.
Crypto records: Transaction history from your wallet/exchange, including timestamps and USD values.

Accurate records protect you in case of an IRS audit and ensure you only pay tax on net winnings (after deducting losses).

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❓ Frequently Asked Questions (Texas Casino Taxes)

Do I have to pay state taxes on casino winnings in Texas?

No. Texas does not have a state income tax, so you do not owe any state tax on gambling winnings, regardless of the amount.

What federal taxes apply to gambling winnings in Texas?

All gambling winnings are considered taxable income by the IRS. You must report them on your federal tax return. If your winnings exceed $5,000 (or $1,200 from bingo/slots), the payer may withhold 24% federal income tax.

How are Sweeps Cash redemptions taxed in Texas?

Sweeps Cash redemptions are treated as gambling winnings. They are taxable at the federal level. Sweepstakes casinos typically do not withhold taxes, so you are responsible for reporting the income on your tax return.

Can I deduct gambling losses on my federal taxes?

Yes, but only if you itemize deductions (Schedule A). You can deduct gambling losses up to the amount of your gambling winnings. You must keep accurate records (session logs, receipts) to substantiate losses.

What tax forms will I receive from a casino?

You may receive a Form W-2G if you win $1,200 or more from bingo or slots, $1,500 or more from keno, or $5,000 or more from poker tournaments, sweepstakes, or other wagering transactions. Offshore casinos may not issue W-2Gs; you are still required to report winnings.

Do I need to report crypto gambling winnings?

Yes. The IRS treats cryptocurrency as property. Winnings in crypto must be reported at their fair market value in USD on the date received. You may also have capital gains if you later sell the crypto.