Pennsylvania gambling taxes

In most cases, your PA gambling tax is going to be standardized. There’s a 24% federal tax rate on all gambling, plus the 3.07% income tax rate for Pennsylvania. That means if you win $10,000 on football betting and $10,000 on slots, your PA sports betting taxes and your PA online casino tax should be identical.

The 24% is a general number — in reality, it could go up to 35%, depending on your tax bracket.

So, is there any point in discussing each gambling vertical individually? Actually, yes. It has to do with federal tax form W-2G.

When you win money at Pennsylvania casinos, sportsbooks, racetracks, etc., they usually withhold taxes on winnings automatically, but there are thresholds at which they need to send a W-2G to report your winnings to the IRS. These thresholds differ in each gambling vertical, so we’ll cover them individually.

Is the tax rate different for each type of gambling?

Below is a quick-reference guide for PA gambling tax and W-2G forms.

How to pay tax in PA on gambling winnings

Any gambling winnings are subject to both federal and Pennsylvania gambling taxes. Cash winnings are pretty straightforward, but any non-cash prizes require you to pay a ‘fair market value’ of tax, so you’ll need to have those estimated. Here, we’ll give you an overview of the important things to know to sort out your PA gambling tax.

If you’ve won a lot of money, we advise working with a financial professional to make sure you’re compliant with the law in all aspects.

1. Make sure your gambling partner has your info — Whether you need to pay PA online casino tax, sports betting taxes, or anything else, the gambling organization usually needs to send you a W-2G. Make sure they have your ID and address.

2. Prepare to receive your W-2G — You often won’t need to make federal tax payments yourself; the operator will withhold taxes automatically. However, you’ll still need to fill out forms. Your W-2G will act as proof of taxes paid, and you need to enter the info from it into your 1040. Use our PA gambling winnings tax calculator to see if you qualify for a W-2G. If you do, and don’t receive it, contact your operator.

3. Get hold of Form 1040 — You can find these on the IRS site. All gambling winnings go under ‘other income.’ You’ll usually opt for Form 1040 — Schedule 1, though there’s a 1040-SR for people over 65, and Form 1040-NR for those who aren’t citizens/permanent residents of the USA.

4. Pennsylvania income tax forms — You’ll report your gambling winnings on PA-40 Schedule T. Then, report the total winnings from line 6 of Schedule T on line 8 of your standard Pennsylvania income tax return (form PA-40). If you’re a Pennsylvania resident, and you’ve won money in a different state, it still counts towards your income tax in PA.

5. Bonus tip; itemize deductions — This is optional, and it’s often easier to take the standard deduction. But you can deduct losses against winnings if they’re itemized, which could save a bit of cash. However, your deducted losses must be smaller or equal to your gambling winnings.

Federal tax form W-2G

What is the purpose of a W-2G tax form?

A W-2G tax form is there to keep a record of your winnings. It shows what you’ve won, and highlights any winnings that were withheld for tax purposes.

Where do I get a W-2G from? 

If you’ve won the qualifying amount of cash, your payer, be they a PA casino, sportsbook, or other operator, will send you a W-2G, and they’ll CC the IRS too.

How much do I need to win to receive a W-2G?

Check out our table above, which lists the thresholds, and acts as a PA gambling tax calculator, showing you how much you need to pay in income and federal tax for each type of gambling.

Where do I get a W-2G from? 

You can check whether you’ve won a qualifying amount on the table in our winnings tax summary section. If you’ve qualified, but haven’t received your W-2G, make sure you contact the org that’s paying out your winnings. You’ll need it on tax day The IRS also advises you to keep a diary of your wins and losses, and if possible, all gambling receipts.

What if I don’t receive a W-2G? 

If you qualify for a W-2G, it should be sent to you by your gambling retailer (sportsbook, casino, etc), and you should know when you’re meant to qualify, in case you don’t get one. That may leave you in hot water with the taxman.

While citizens pay taxes on winnings, sportsbooks, and casinos are also paying tax on their income. Pennsylvania sports betting revenue has led to tons of money being available for state services.

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

You may be liable for penalties and fines, ones which could even have interest on them. You are legally obliged to pay taxes on income, whether it comes from gambling or your regular day job.

If your casino sends you a W-2G, they’re legally obliged to send one to the IRS too; so they know exactly what you’ve won, and how you won it.

We get it; no one likes paying their taxes, and if you won a $10,000 prize, you want to keep all of your $10,000. But don’t mess around with the IRS — not even The Joker will take them on!

PA state gambling laws

You’ll find pretty much all the major types on offer at PA online gambling sites. The trinity of sportsbooks, poker, and online casinos are all there, marking PA’s gambling laws as some of the most permissive across the country. In fact, it is Pennsylvania’s permissiveness that has allowed for great new concepts such as the Fliff social betting app to be born.

The gambling age in PA stands at 21+ for online casinos, sports betting, and poker. In the case of lottery, you need to be over 18 to buy your tickets. To participate in fantasy sports you need to be over 18 however if this is done at a casino, a person needs to be over 21. Since legalization, gambling company’s profits contribute to PA gambling taxes.

Outside the online world, PA’s open-mindedness carries over, and you’ll be able to place wagers on just about anything. Land-based casinos are huge in PA, and land-based sports + pari-mutuel racing wagers are also legal.

You’ll find lotteries too, bingo games, and other small subcategories like “tavern gaming” and “VGTs” — we’ll cover those when we talk about other forms of gambling in PA. 

Finally, fantasy contests are also authorized and regulated in PA, predominantly fantasy sports. One thing to note is that online bingo hasn’t been legalized yet, it’s still an offline-only game.

Online casinos Legal since 2019

Pennsylvania online gambling is solid in the casino sector. Only five states have legalized online casino gambling so far, which immediately puts PA online casinos ahead of most — it became the fourth legal state in 2017. Out of those states, New Jersey was the first and is by far the biggest, but PA is in constant competition with Michigan for second place. 

There are more than 20 online casino sites at the time of writing, and while they are smaller than NJ’s, PA can match the best for game variety and bonus offerings, which is good news for our library of casino reviews. PA casinos tend to have less software providers on the whole though, but they make up for it by having a higher ratio of casino software providers to total games, which is definitely a plus.

• Great game variety despite smaller libraries
• Bonuses match the best ones in NJ
• Casinos have a high density of software providers

• Smaller games libraries than NJ

Online sports betting Legal since 2018

Practically all sports betting is legal in Pennsylvania, both retail and online. To date, over a dozen operators have launched sports betting sites for PA online gambling, with the first legal bets being placed in November 2018.

There are very few notable exceptions to sports betting rules when it comes to online gambling in PA. Betting on college events is allowed at Pennsylvania sports betting sites, which marks PA as one of the freest states in sports betting — even NJ has some restrictions there. However, you can’t bet on things like drafts, only athletic events.

Notably, e-sports betting isn’t legal yet, though this might change soon as the topic of legislation was brought up in the PA House of Representatives in  July 2021.

Professional and collegiate sports and athletic events are all legal, as are motor races. Horse-racing is legal via pari-mutuel betting. Both local and international events are available for sports wagers, and new players are generally welcomed to sportsbooks with promotions and bonuses, most typically in the form of a risk-free first bet.

• Local and international sports events
• Professional and college
• Horse and motor racing

• No esports yet
• Can’t bet on drafts

Online poker Legal since 2017

Online poker games were legalized in 2017, at the same time as internet casino gambling. At the time of writing, 4 sites are running dedicated poker verticals, while online casino games like RNG poker and live dealer poker can be found at many of Pennsylvania’s casinos.

Poker at PA online gambling sites is generally high-quality stuff. Operators like Caesar’s online casino are affiliated with the World Series of Poker, with WSOP having a legal PA site under the Caesar’s brand. PokerStars, one of the world’s foremost brands for online poker, also operates in PA, offering daily tournaments, as well as the $400,000 Pennsyl-Mania tournament.

Pennsylvania does not yet have inter-state poker player pools, so its 13 million residents will have to compete against each other, at least for the time being. For context: Nevada, New Jersey, and Delaware have a merged online poker pool, combining the three states’ players to provide a broader range of potential opponents.

• Poker offered by big-name brands
• High quality, with lots of tournaments
• No inter-state gambling yet

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