Mississippi online gambling taxes

All forms of online gambling in Mississippi are currently illegal. This includes online casinos offering poker, table games, bingo, live dealer games, and lotteries.

When it comes to sports betting, while it is permissible in the state, you’ll need to be physically located at a partner sportsbook to place your bet.

Online social and sweepstakes casinos were allowed until Senate Bill 2510 passed in February 2025. That means both online social and sweepstakes gaming are now prohibited in the state of Mississippi and punishable by a fine or up to a decade in prison.

Gambling winnings are currently taxed at 3% in the state of Mississippi for in-person sports gambling.

Is the tax rate different for each type of gambling?

No, all money won online from gambling is subject to a 3% state tax rate, regardless of the type of gambling. The 3% state tax is withheld at the time of payout by the casino. This means that it’s automatically deducted from your winnings and contributed to state taxes.

So, you’re not required to report these winnings on your tax return, irrespective of whether you are a Mississippi resident or non-resident.

How does your income affect taxes in Mississippi?

Your overall income does not affect your gaming taxes in Mississippi. This is because the sportsbook automatically withholds a flat 3% state tax on gambling winnings at the time of payout, and this is not relevant or subject to how much you earn.

While Mississippi imposes a flat 4.4% state income tax, this does not apply to gambling winnings. So, unlike in other states, gambling winnings are not included as part of your annual taxable income. However, gambling winnings are considered taxable income at the federal level and must be reported to the IRS.

What’s more, larger winnings could push you into a higher federal tax bracket, and this may ultimately increase your overall tax liability. But as far as Mississippi state taxes go, your total income does not change the 3% state gambling tax rate.

How to pay gambling taxes in Mississippi?

Unlike some other states, Mississippi makes things simple when it comes to gambling taxes. The state automatically takes 3% of your winnings at payout, so there’s no extra work for you. But, you still need to handle federal taxes on your own. Here’s what to do:

Step 1: Collect your winnings

• If you win any amount, the sportsbook automatically withholds 3% for Mississippi state taxes.
• If your winnings meet IRS reporting requirements (e.g., over $600 for certain bets), the sportsbook will issue you a W-2G form.

Step 2: Keep track of your winnings and losses

• Even if you don’t get a W-2G, you’re still required to report all gambling winnings to the IRS.
• Keep a record of your bets, wins, and losses to help with federal tax filing.

Step 3: File your federal taxes

• Mississippi doesn’t require you to report gambling winnings on your state tax return since they already took their cut.
• But for federal taxes, you must report all gambling winnings on your IRS tax return (Form 1040, Schedule 1).
• If federal tax was not withheld at the time of payout, you may need to pay estimated taxes throughout the year to avoid penalties.

Step 4: Deduct your gambling losses (If you qualify)

• If you itemize deductions on your federal return, you can deduct gambling losses, but only up to the amount of your winnings.
• Losses cannot be deducted from your Mississippi state taxes.

Step 5: Pay any remaining federal tax owed

• The IRS may withhold 24% upfront on big wins, but you might still owe more or qualify for a refund based on your tax bracket.
• If you underpaid, you’ll need to send the IRS the remaining amount when you file your tax return.

Key takeaways

• Mississippi automatically takes 3% of gambling winnings at payout, so no extra state filing is needed.
• You must report all gambling winnings on your federal tax return.
• If you itemize, you can deduct losses on your federal return, but not on Mississippi taxes.
• If federal tax wasn’t withheld at payout, you may need to pay estimated taxes.

So, for Mississippi state taxes, it’s automatic, but for federal taxes, you’re responsible for making sure everything is reported and paid.

Tax breakdown for players in Mississippi

The only form of legal online gambling in Mississippi is sports betting, provided you are physically located at a land-based sportsbook or gambling establishment at the time of placing your bets. 

Online sports betting (while at a land-based sportsbook)

• Federal tax is 24% if you win over $5,000 and the winnings are at least 300 times your bet.
• Mississippi tax is a flat 3%, automatically withheld at payout.
• You’ll get a W-2G form if you win $600 or more and your win is 300 times your wager.
• Mississippi does not allow gambling loss deductions on state taxes, but you can deduct losses on your federal return if you itemize.
• No extra state income tax applies, since the 3% is already withheld.

What happens if you don’t report gambling winnings in Mississippi?

When it comes to Mississippi state taxes, nothing’s going to happen if you don’t file your gambling winnings on your state tax return. This is because the state already takes 3% of your winnings at the time of payout. So, once again, you don’t have to report them on your state tax return.

That said, you are liable for reporting and paying federal taxes. If you don’t report all winnings on Form W-2G or fail to inform the IRS, they could come after you. This means they could flag your return, or you could owe penalties and interest.

That said, while you don’t need to report winnings on your state taxes because it’s automatic, skipping federal taxes could lead to a series of negative consequences. So, it’s in your best interest to keep track of all your gambling winnings and losses and report federal taxes on time.

Mississippi gambling sites by type

Despite being one of the most welcoming states to retail gambling, lawmakers drafting the Mississippi gaming control act have approached online gambling sites more cautiously. After the state legalized land-based casinos in 1990, Mississippi saw a massive rush of casinos opening up.

Now, there are almost 30 in operation. The Magnolia State even legalized sports betting before the US Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA) in 2018.

Having said that, you can’t gamble at Mississippi casinos online, play online poker, play live dealer games, or buy lottery tickets online. There are a limited number of online sportsbooks, and using these sites is restricted by location.

You can only legally bet in the partner land-based casino of your sportsbook. The minimum gambling age in Mississippi is 21+ for most activities. 

Mississippi online casinos Not yet legal

Are there any legal online gambling sites in Mississippi? No. The Magnolia State may have welcomed dozens of commercial land-based casinos over more than three decades, but the state’s lawmakers aren’t ready to legalize online casinos yet.

It seemed like the state was very interested at one point when the House Gaming Committee formed the Internet Gaming Taskforce in 2014. The Taskforce was responsible for studying the possibility of an online launch. The results viewed launching Mississippi online gambling negatively, citing technology issues and how rural the state is.

These concerns led the Taskforce to conclude that Mississippi online gambling may not be profitable. There have been more recent attempts to legalize online casinos, but so far, nothing has passed.

As of 2025, all sweepstakes casinos have also become illegal. Purely social casinos such as Gambino Slots are currently still accepted, though discussions are still ongoing.

Mississippi online betting sites Not yet legal

Mississippi gambling laws for sports betting are different than in other jurisdictions. In most states, you can download a sportsbook app and bet from anywhere in the state as long as you are old enough to gamble.

While retail sportsbooks operate at licensed land-based casinos in Mississippi, you can’t place bets online from anywhere. Some MS sportsbooks allow you to download an app to use on the casino’s property. You will need to enable the app to track your device’s location, and you can’t bet once you leave the casino.  

Offline gambling in Mississippi

There are 29 land-based casinos spread across the Magnolia State, where you can play slot games, table games, and poker. Many of these land-based casinos also provide retail sportsbooks where you can place bets.

The Mississippi Gaming Commission (MGC) licenses every commercial casino. There are also some tribal casinos that the Mississippi Band of Choctaw Indians regulates.

Some casinos were launched back in the early 90s with more and more casinos opening up their doors as recently as 2015. Some of the Mississipi land-based casinos also have an online social casino counterpart.

Mississippi gambling and safety

Compared to the rest of the US, Mississippi has unique gambling rules. The state government formed the Mississippi Gaming Commission in 1990 to enforce those regulations. Only gambling operators licensed by the MGC can provide casino games, sports betting, or charitable games in MS. The body is responsible for checking every company that applies for a gambling license sticks to gambling regulations. The MGC also runs background checks on key staff members.

Following Mississippi gambling laws, the Mississippi Gaming Control act currently doesn’t regulate any online casino gambling. The MGC licensed BetMGM and Pearl Rivers Sports to provide online betting within the confines of each operator’s partner casinos.

FAQs

Sources

https://www.betmississippi.com/

https://www.betmississippi.com/gambling-winnings-tax

https://www.gambling.com/us/online-casinos/mississippi

https://www.freetaxusa.com/answers?faq=7384