Do You Pay Tax on Offshore Casino & Sportsbook Winnings? 2026 Rules Explained
This is general information, not tax advice.
Are offshore winnings taxable in the US?
They are. IRS Topic 419 says gambling winnings are “fully taxable” for casual players. That covers casinos, sports betting, lotteries and horse races.
Where the site is based doesn’t change it. US citizens and residents are taxed on income from anywhere in the world.
So an NBA parlay that cashes at Everygame and a slot hit at Slotocash count the same way. So does a blackjack session at Vegas Casino Online. Prizes count too, at fair market value.
You report the total on Schedule 1 (Form 1040), line 8b, as Publication 525 explains.
Will an offshore site send you a W-2G?
Probably not, and it doesn’t matter. Form W-2G is how US payers report certain wins to the IRS. A US payer also withholds 24% when a sports bet pays more than $5,000 after the stake and at least 300 times the wager. Offshore books generally sit outside that system.
The IRS is clear on what you owe either way. You must report all gambling winnings, “including winnings that aren’t reported on a Form W-2G.”
Take Everygame, an offshore sportsbook and casino since 1996. Whatever you win there, the reporting duty sits with you, not the site.
What changed for the 2026 tax year?
Two things. The loss limit comes from the One Big Beautiful Bill Act, signed July 4, 2025. The new W-2G threshold comes from the IRS’s current Form W-2G instructions.
| Rule | 2025 tax year | 2026 tax year |
| Loss deduction | 100% of losses, up to winnings | 90% of losses, up to winnings |
| W-2G reporting threshold | $1,200 for slots and bingo | $2,000 minimum, adjusted for inflation in later years |
| Withholding on large wins | 24% | 24% |
The 90% limit applies to tax years beginning after December 31, 2025. The IRS set it out in proposed rules in Internal Revenue Bulletin 2026-19. Married couples filing jointly apply the 90% to their combined losses, capped at their combined winnings. If gambling is your trade or business, the limit also takes in the expenses of running it.
A fix is moving, but it isn’t law. On September 16, 2026, the House Ways and Means Committee voted 38-5 to restore the full deduction. Both chambers still have to pass it.
How much does the 90% rule cost you?
Here’s a worked example. Say you win $10,000 and lose $10,000 during 2026.
- You report $10,000 of winnings.
- You can deduct 90% of $10,000, which is $9,000.
- You pay tax on $1,000, even though you broke even.
Under the 2025 rules, that same year would have netted to zero.
Now say you win $8,000 and lose $12,000. Ninety percent of your losses is $10,800. The cap at winnings brings that down to $8,000, so your gambling income nets to zero.
Keep one more rule in mind: losses only count if you itemize. They go on Schedule A as “Other Itemized Deductions.” Take the standard deduction and your winnings are taxed in full.
How should you track offshore wins and losses?
Publication 529 asks for a diary. Log these for every session:
- The date and type of wager
- The site or establishment, with its location
- Anyone with you at the time
- The amount won or lost
Back it up with documents. Account statements, bank records and withdrawal confirmations all help.
Paid in crypto? Everygame takes Bitcoin, Bitcoin Cash, Litecoin and Lightning Bitcoin. Record the dollar value of a crypto win on the day you receive it. Selling that coin later is a separate digital asset sale with its own reporting.
Do you need to pay tax before April?
You might. Topic 419 says gambling winnings can mean you owe estimated tax during the year. Publication 505 explains how.
Your state may tax winnings too, and state rules on deducting losses vary. A tax professional can tell you which apply to you.
Keep the game in proportion
Tax is one more reason to set a budget before you play. Use deposit limits, and only gamble if you’re of legal gambling age. If it stops being fun, call 1-800-GAMBLER or visit ncpgambling.org.
Your first step
Start your gambling log today and keep it going through December 31. If you play at Everygame, set a monthly deposit limit on its responsible gaming page first, so your log and your budget match.
By D.Mayville
Image credit Dreamstime
