Ohio Sports Betting Tax Rate Calculations and Gambling Winnings Tax Forms

Legal sports betting is about to go live in Ohio. While you can soon enjoy your rewards from betting on football, hockey and basketball, you also need to understand the tax implications.

Sports gambling taxes work a little differently from those on casino or lottery winnings, and it’s important to know the difference. Plus, you may be eligible to deduct losses from any tax returns you file.

Here, we’ll show you what sports gambling taxes you may be liable for at Ohio online sportsbooks. We’ll also show you how to use a sports betting tax calculator to help you keep better records.

What is the Ohio Gambling Tax Rate?

TAXABLE INCOME OHIO TAX RATE
$0 to $25,0000%
$25,001 to $44,2502.765%
$44,250 to $88,4503.226%
$88,450 to $110,6503.688%
$110,650+3.99%
 

Ohio sports betting is legal from January 2023, and that means you should know everything about your tax liability. You may have to pay an effective tax rate on earnings from your favorite NFL or NBA bets. You may be taxed on federal duties as well.

Ohio reduced its 2022–2023 income tax rates and they emerged more advantageous to earners of all levels. State taxes are paid on a sliding scale from 0% for earnings under $25,000, up to 3.99% for anything over $110,650. For federal taxes, you can strike off gambling losses from your ‘other income’ totals to bring down your rate further. However, there is a limit on the 'negative carryover' for gambling tax returns.

You must pay taxes on all income in Ohio, including gambling winnings. The reduced tax rates are likely to remain unchanged for 2023–2024. That means you can join Ohio sportsbooks with a clear idea of what taxes you’ll end up paying. It frees up a lot more money when you join a sportsbook licensed by the Ohio Casino Control Commission or one of the Ohio Lottery partners.

In addition to an Ohio sports betting tax, you may also be taxed under federal rules. Under federal law, you must pay tax on gambling winnings exceeding $600 and that are 300 times the size of your stake.

The sportsbook will withhold part of your winnings and you’ll need to complete a Form W-2G. You can then report your gambling winnings when you submit your final tax return in Cleveland or wherever you live in Ohio.

 

NOTE: Legal sports betting in Ohio is live as from January 1, 2023 - so you can start placing bets!
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Do I Always Have to Pay Taxes on Ohio Gambling Winnings?

First, the bad news: you must report all gambling winnings on your Ohio tax return. The good news is that you simply add any winnings to your existing tax return.

This can be good if your overall income is low enough to keep you in a lower tax bracket. Plus, Ohio has reduced its tax rates to reflect the increase in living costs in recent months.

For Ohio sports betting, sportsbooks will withhold 4% of payouts over $600. That’s on top of the 24-28% withheld for the federal tax liability. Naturally, if you win a lot of $100-200 returns on sports bets, you won’t be liable for a whole lot of tax. Regardless of how much you are taxed, we still recommend you report all profits on your tax return.

Watch out too for city taxes if you’re betting at retail sportsbooks. Local city taxes on gambling are as follows:

Ohio Lottery Taxes

The Ohio Lottery reports any wins over $600 to the IRS automatically. You will be issued with a Form W-2G which you must complete, detailing your win. Don’t forget that you will also need to report your lottery win on your Ohio IT 1040 Line 1 when you complete your state tax return.

How Are Group Lottery Wins Taxed in Ohio?

Group lottery wins are taxed in Ohio just as with regular winnings. However, you’ll need an additional form to complete which prepares you for the next step of sending your Form W-2G to the IRS.

You can contact your nearest Ohio Lottery regional office if you’re sharing a prize and request a Form 5754. Offices are spread across eight state regions.

You’ll need to complete the form, listing each recipient of the prize, together with their Social Security Numbers and mailing addresses. You must also detail how much each recipient is claiming.

Paying Tax on Horse Racing Bets

You must pay tax on all gambling winnings from horse racing in Ohio. Federal taxes may also apply if you reach the threshold. As with casino winnings, 4% is withheld by the OTB outlet and you must complete a W-2G form to report it to the IRS.

Ohio Gambling Tax Calculator

It’s worth remembering that on the whole, sports betting taxes are applicable in Ohio as part of your regular income. You can simply include sports betting on your state tax return and incorporate it into your income.

For example, imagine you earn $15,000 from your regular job and $9,000 in gambling earnings. Aside from the money withheld by Ohio, you wouldn’t reach the threshold of $25,000 for paying state income tax.

 

 

Follow this table as an example, assuming you have $60,000 taxable income and won $1,000 during the fiscal year: 

 

Maritial StatusAnnual Taxable IncomeGambling WinningsTax on GamblingGambling Winnings Profit
Single$60,000$1,000$253.30$746.70
Married$60,000$1,000$153.30$846.70
 

Note: The table Gambling Tax calculator table assumes a standard deduction of $12,400 (single)/$24,800 (married) and does not include any municipal/local taxes.

Ohio Gambling Tax Laws Rundown from Ohio Sports Betting Bill

Once Ohio lawmakers signed HB 29 into law, it opened the way for gamblers in the Buckeye State to enjoy mobile betting or retail sportsbooks. Both gamblers and operators are taxed on winnings and revenues respectively.

The original bill was strict on sports betting operators in insisting that taxes on revenues were paid daily. That would hurt sportsbooks' accounts who were unable to offset deductions for losses.

The new bill HB 515 passed in July 2022 and updated the rule. Sportsbooks can go live in 2023 taxed on gross revenue every month instead. It's better for the sportsbooks and a lot better for their banks.

As for the gamblers, nothing much changed. Sports bet winnings are taxed at 4% as long as they exceed the threshold. Federal income tax must also be paid if the return is high enough.

How Are Ohio Gambling Taxes Collected?

Taxes in Ohio are overseen by the Department of Taxation. You can file a state tax return online and make payments. You must also file a return in Ohio if you are a non-resident but won money in the state. You'll be taxed in a similar way to a regular resident.

The Internal Revenue Service (IRS) is responsible for all federal taxes. You must sign up for an account but it’s free to file federal taxes throughout the year. You’re able to report your income and deduct gambling losses.

You can also use the IRS site to pay taxes. Pay by debit card or credit card or use a digital wallet such as PayPal. You can also make annual payments direct from US banks.

 

Illustration of gavel

 

What Happens if You Are Not Paying Taxes on Gambling? 

You don’t have pay taxes daily or monthly when you complete your IRS return. However, you must declare all your gambling winnings when betting in Ohio. You could incur fees if you fail to report all your sports betting profits. Even worse, you may have to pay interest on any overdue tax you owe.

Don’t forget, when you get a Form W-2G following a win, the IRS also receives a copy. In most cases, however, the percentage withheld by the sportsbook will cover anything you owe. However, your profits could push you into a higher tax bracket and therefore you’d be eligible for a larger tax bill.

It’s worth remembering that if you’re betting a lot, you could deduct gambling losses when completing your return. A standard deduction could be thousands of dollars but you may have to prove that online gambling forms the bulk of your total income. Plus, you can lump together all your gambling losses from the entire year when it comes to filing your return.

How do I Report Tax on Gambling Earnings in Ohio?

Reporting sports betting tax in Ohio isn’t all that hard. In fact, sportsbooks will already have withheld some of it if your win was big enough. By reporting your tax you may even end up with some sort of refund if your deductions on other bets are large enough.

The bad news is that you can’t deduct losses in Ohio. You are taxed on the overall return and you won’t be able to take off a deduction for any other losses. Don’t forget to declare everything on your Form IT 1040 Line 1 in Ohio.

You can also report any amount that was withheld from a retail or online sportsbook. You can do this on Line 14 of your Ohio tax return, and in the area headed Ohio Schedule of Withholding.

It’s important to differentiate ‘winnings’ from ‘profit’. Your winnings are the accumulated return from all bets, including the original stakes. That total is the amount paid out over an entire tax year. Your profit is the amount you make minus all stakes. However, you won’t be able to claim deductions on your Ohio tax return for losing wagers.

Filling Federal Taxes With Form W-2G

Tax returns can be daunting but reporting your sports betting winnings in Cleveland or Toledo needn’t be stressful. Paying taxes is as easy as completing a few forms. Make sure you understand your federal tax rate before you start.

  1. Step 1: You will be issued with an IRS Form W-2G (Certain Gambling Winnings) every time you win a sports bet worth over $600 that is 300x the stake or more. A copy of the form also goes to the IRS and stays on your file.
  2. Step 2: At the end of the tax year, it’s time to report all your W-2Gs in the area marked ‘Other Income’ on IRS Form 1040, Schedule 1.
  3. Step 3: Add everything from ‘Other Income’ for the year to your regular income on Line 7a of Form 1040. You can also see your W-2G totals here.
  4. Step 4: Remember to itemize any deductions for gambling losses on Schedule A (Form 1040) and keep a record at home. You may also be asked to supply receipts and statements detailing all of your bets. Note that you can’t deduct more losses than the size of your gambling income.

 

W-2G Gambling Tax Form

 

What About Filing Ohio State Taxes?

You can file your state tax return via the Ohio Department of Taxation website.

  1. Step 1: Head to the Ohio Department of Taxation website and click on Access Online Services.
  2. Step 2: Set up a User ID and password.
  3. Step 3: Open the Form IT 1040 – Individual Income Tax Return and complete it with full details of all personal income. Check the tax rate while you're doing this.
  4. Step 4: Complete Part D – W-2Gs – detailing all reportable sports betting revenue you've made. Gambling winnings will form part of your overall state income.

Ohio Non-Residents State Tax Form for Filing Gambling Winnings

You can also gamble on sports and win money in Ohio in 2023. That’s great but you may also be subject to tax on a state level on anything you win.

The cost of tax may be withheld from your prizes while you’re in Ohio borders. You can do something about that by filing a non-resident tax form.

You can complete the Ohio IT 1040 return if you’ve won money on Ohio soil. Check ‘Nonresident’ under ‘Residency Status’ and write the abbreviation for the state you live in. the box under the Ohio Nonresident Statement box and follow the instructions.

You’ll still need to have all your W-2Gs from any Ohio sportsbooks to hand. Remember to attach all your W-2Gs when you complete your own state tax form too. You may incur fees if you don't file correctly.

What to Do if You Don’t Get a W-2G Form Sent to You

Every OH sportsbook will send out a Form W-2G so you can report tax on sports betting wins. That’s a strict rule under the terms of the Ohio Casino Control Commission. By not sending you a W-2G, the sportsbook is also breaking the rules.

Start by logging in and contacting the customer support agent at the online or mobile sportsbooks. You can also visit the casino if your win was at a retail sportsbook.

Remember to keep detailed records when betting in Ohio so you are taxed at the correct rate. You may face penalties and interest if you underreport gambling winnings, even if it’s done as an innocent mistake.

 

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Deducting Ohio Tax on Gambling Losses

Sports betting tax does allow for some corrections when you file your return. However, remember that deducting gambling losses on taxes can only be done for federal returns. You won’t be able to deduct losses when you complete your state IRS return.

Let’s look at federal IRS return adjustments. You can only deduct losses up to the total of your returns. Plus, you must itemize every single deduction. You can detail all gambling losses on Schedule A (Form 1040), Itemized Deductions.

Imagine you won $10,000 over a calendar year but lost $12,000. You could only claim $10,000 in losses as that is how much you won in total.

Make sure you keep hold of all of your W-2Gs and every ticket stub from a retail sportsbook. You can also save and print a full history of wagers you make at an online sportsbook. Sports betting sites go live in Ohio in January 2023 and will allow you to print off date-by-date records of your bets. It’s also worth having bank statements that detail any deposits and withdrawals from online sportsbooks in case the IRS needs to see them.

The majority of Ohio sports bettors will be casual gamblers. While you can claim for some losses, you won’t be able to claim for any peripherals such as travel to casinos or computer equipment. However, as a professional gambler, you may have such deductions which can be classed as business costs.

What if All or Part of My Gambling Winnings Are Non-Cash Like a Car?

The sports betting tax in Ohio doesn’t just cover cash amounts. You may also be eligible to pay tax if you win a non-cash prize.

Some sportsbooks may offer holidays, cars, or gifts as part of a leaderboard challenge or predictions competition. For these, you simply complete IRS Form 1099 which covers miscellaneous payments.

You will be supplied with a Form 1099 by the casino or sportsbook, just as you would with a W-2G for cash payouts. Then, complete Line 21 on your IRS Form 1040. Remember to list all totals from every Form 1099 you received for that year.

Bear in mind that a large prize, such as a holiday, can be classed as income. So, for instance, a holiday worth $10,000 may be subject to tax as if it were regular income. That’s something to consider before you enter a leaderboard challenge of a daily fantasy sports prediction contest.

How Much Ohio Betting Tax Revenue is Generated Year on Year?

From Cleveland to Toledo, Ohio has a network of established casinos and sportsbooks. Casinos will offer sports betting online from January 2023 so revenue and tax dollars are impossible to gauge right now.

However, we do know that during 2021, Ohio gambling brought in $2.3bn in gross revenue. 2022 could have seen an even bigger level of revenue had sports betting gone live in time for the start of the NFL season. However, fans of the Cleveland Browns will have to wait until January to bet on their team within Ohio borders.

Casinos are subject to a 33-percent tax bracket by Ohio lawmakers too. New sportsbooks in Ohio will face an actual tax rate of 10%, or gambling taxes per dollar in Ohio of 10c. Some of that cash will go toward a Problem Sports Gaming Fund. That’s pretty low compared to the 51% tax rate in New York but just above the 6.75% seen in Nevada. It’s likely that had Ohio endured the same rates as Nevada, the sports betting operators in the Buckeye State would have struggled.

Total sports betting revenue for Ohio sportsbooks could be around $50-100m to start with, depending on the number of legal operators. Factoring in the tax percentage on sports betting, that’s around $5-10m a year for the Ohio Dept of Tax. Gambling income is also likely to rise given the sheer number of sports betting licenses likely to be issued by the Ohio Lottery Commission.

Where is the Federal Tax Revenue From Sports Betting and Gambling Going?

The tax rate for sports betting in the US is around 25-28%. But where does the sports betting federal tax actually go?

Ohio Gov. Mike DeWine spoke in 2021 of improving education and veterans’ groups with tax dollars at home. A portion of sports betting revenue will fund problem gambling charities in Ohio.

Countrywide, gambling revenue taxes are used on public programs and economic development. In general, betting tax paid by companies supplements existing tax dollars from incomes.

How to Get More Info on Ohio Online Gambling

You can get the full skinny on Ohio online gambling with our in-depth guide. There you’ll find the latest news on Ohio’s many casinos and gaming laws. You can also get ready for the first sports betting sites with our special prelaunch welcome bonuses.

FAQs


Yes, you have to pay taxes in Ohio state. You are subject to betting tax in Ohio on any winnings. You must also pay federal income tax on sports bet wins over $600 and 300x your stake. Keep track of all your betting activities to more easily manage tax papers.

The betting tax is 4% on all gambling wins. You must also pay 24-28% on qualifying parlays or single bets that qualify. The sportsbook will issue you with a Form W-2G detailing your bet and return. All you have to do is fill it out.

You can’t deduct gambling losses when you submit your tax return in Ohio. Winnings are simply added to your overall income tax bill. However, you can make deductions when you file a federal tax return. So keep track of all your gambling expenses.

No, gambling losses are not tax-deductible in the state of Ohio. However, on a federal level, you can deduct some losses as long as they don’t exceed the total amount won during a tax year. Keep a record of your betting activities.

Yes, you are subject to a gambling tax in the state of Ohio. When you bet online or in a retail sportsbook, a federal tax is automatically deducted from your winnings. You must complete a W-2G form and include it on your annual tax return.

Ohio sportsbooks will immediately withhold taxes relative to the size of your win. You must request a W-2G form to report the win to the IRS if the sportsbook hasn’t provided one.

You can’t deduct gambling losses on your Ohio Form IT 1040. However, as a professional gambler, you may be able to deduct some losses and business expenses if gambling forms the majority of your income.

Ohio has an effective tax rate of 33% on gross gaming revenue through casinos. However, sports betting operators will be subject to gambling taxes per dollar of 10%.

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