Super Bowl Betting Is Expected to Top $7.6 Billion. Don't Forget the Taxman If You Win

• An estimated 31.4 million adults plan to bet on Sunday's Super Bowl matchup between the Los Angeles Rams and Cincinnati Bengals, according to the American Gaming Association.
• Since the Supreme Court's 2018 decision to overturn a federal law that banned sports betting in most places, legal wagers are now available in 30 states and Washington, D.C. 
• Here's what you need to know about how sports bets are taxed.

If you plan to drop money on a Super Bowl bet this weekend, remember the IRS will be looking for its cut of your winnings.

Americans are expected to wager $7.61 billion on Sunday night's matchup between the Los Angeles Rams and Cincinnati Bengals in Los Angeles, according to the American Gaming Association. And no matter where you place your bet — whether at a casino, online, through a pool or fantasy league, or at your neighbor's annual bash — the IRS expects you to come clean at tax time.

"In a nutshell, no matter how much you win, or where or how ... it is taxable," said Susan Allen, senior manager for tax practice and ethics at the American Institute of CPAs.

An estimated 31.4 million adults plan to bet on Super Bowl 56, a 35% increase from 2021, research from the gaming association shows.

The growth comes as legalized sports betting spreads across the nation. Since the Supreme Court overturned a federal law in May 2018 that had banned it in most places, legal sports wagers are now available in 30 states and Washington, D.C. 

While you might be less likely to tell the IRS about money you win outside of regulated channels, just be aware that sports betting proceeds are nevertheless considered taxable income.

For casual gamblers placing wagers through regulated sports betting in states that allow it, the IRS makes it a bit easier for you by placing reporting requirements on the payor (i.e., the casino), as well.

Generally speaking, if you win more than $600 for a sports wager and the amount is 300 times the original bet, the payor is required to withhold 24% of your winnings for federal taxes.

There's also a Form W-2G that you might receive, depending on how much you win. Fantasy sports players who win more than $600 generally get a Form 1099-MISC, or 1099-K, depending on how the money is paid out.

More from Personal Finance:
These scams may cost you this tax season
Here are 4 ways to slash your grocery bill
Inflation eroded pay by 1.7% over the past year

"The point is that you'd get some form of tax statement that's reported to the government and to you," Allen said.

However, she said, even if you don't get a form, your gambling income is still taxable.

Also, be aware that your final tax bill could be higher or lower than the amount withheld by the casino or a separate payor, depending on your other income and a variety of other factors. And even if no tax is withheld, you're not off the hook for claiming that income on your IRS return.

One way to reduce what you owe on your winnings is to write off your gambling losses. Be aware, though, that you'd need to be able to back up your claims with documentation if the IRS were to ask for proof.

Additionally, you can only take a deduction for gambling losses if you itemize them on your tax return. The majority of taxpayers are not itemizers because they're financially better off with the standard deduction, which was nearly doubled under the new tax law, in effect from 2018 through 2025. For 2022, that amount is $12,950 for single taxpayers, $25,900 for joint returns and $19,400 for taxpayers who file as head of household.

And, even if you do itemize, you cannot claim losses in excess of your actual winnings, Allen said.