Federal Tax

Casinos are required to report winnings over $1,200 for slots, $1,500 for keno, and $5,000 for poker. For winnings of $5,000 or more, the casino withholds a 24% federal tax.

However, this does not apply to offshore casinos licensed in other jurisdictions, such as Curacao. In such cases, the responsibility falls on the US player to report winnings for tax purposes.

State Tax

Taxation on gambling winnings varies by state. Some states impose taxes on such earnings, while others do not.

If you win money playing slots in a neighboring state, you might be liable for taxes in both the state where you won and your home state.

Peruse the online gambling laws of the state where the casino operates before depositing money.

Offsetting Tax

You can deduct gambling losses if you itemize your taxes, but only up to the amount of your winnings.

It’s advisable to maintain detailed records of your gambling activities, including dates, amounts won or lost, and the locations or websites where you gambled.

High rollers often prefer withdrawal methods that offer speed, high limits, and security. Cryptocurrencies like Bitcoin and Ripple are popular choices due to their fast processing times and low fees.

Bank wire transfers are suitable for large sums but may take a few days to process and could incur fees.

Some casinos offer VIP cashier services for discreet and quick transactions, while others may issue checks for large amounts, which might take several days to clear.

States often require casinos to withhold taxes on large payouts, especially for non-residents. If you’re gambling in a state where you don’t reside, a portion of your winnings might be withheld for state taxes.

Additionally, certain states have provisions to intercept gambling winnings to cover unpaid debts, such as back taxes or child support.

Regulated online casinos in the U.S. may have stricter withdrawal rules compared to offshore sites, and larger withdrawals might require additional verification, leading to potential delays.

Offshore casinos operate outside U.S. jurisdiction and might process large withdrawals with fewer restrictions; however, it’s crucial to consider the site’s reputation and reliability.

Verify Your Account Early

Don’t wait until you win money to submit your ID and proof of address. Do it the moment you sign up. Your withdrawal will remain in limbo if you haven’t verified your account yet.

Use One Withdrawal Method

Online casinos prefer when you use the same deposit option to cash out your wins. If you suddenly request a different payout option, it triggers extra security checks.

Avoid Breaking Up Withdrawals

Don’t split a large cashout into smaller chunks thinking you’ll avoid reporting requirements. In reality, it does the opposite.

Casinos track patterns, and multiple smaller withdrawals can look suspicious. Cash out in one go whenever possible.

Communicate with the Casino

High-limit players often get faster service by speaking directly with a VIP host.

If you’re making a significant withdrawal, it helps smooth the process and sometimes even unlocks better limits.

Deduct Gambling Losses

Track every bet you make, win or lose. The IRS lets you deduct gambling losses only if you itemize your tax return.

Keep your betting slips, account statements, and receipts. Doing so lowers taxable income from online casino gambling wins.

Lump Sum vs Annuity Payout

When you win a life-changing jackpot, consider taking an annuity instead of a lump sum. Spreading out payments over several years keeps you in a lower tax bracket, reducing what you owe each year.

State Tax Credits

Some states tax gambling winnings, even if you don’t live there. The good news? If you pay taxes in one state, your home state might offer a credit to avoid double taxation.

Gifting Winnings

You can donate part of your winnings to family or friends tax-free, up to the IRS limit. It won’t lower your original tax bill but spreads the wealth without extra penalties.

Request a Casino Security Escort

Walking out of a casino with a substantial amount of cash can make you a target. Request a security escort if you’re carrying a large sum. Casinos offer this service to ensure your safety—take advantage of it.

Choose a Safe Payment Option

Opt for bank wires or checks instead of cash, as they are more secure. If cash withdrawal is necessary, consider discreet methods to carry your winnings safely.

Enable Two-Factor Authentication

Protect your online casino account by enabling two-factor authentication (2FA). This adds an extra layer of security, making it more difficult for unauthorized individuals to access your funds.

Double-Check Payment Details

A single mistake in a wire transfer or cryptocurrency address can result in funds being sent to the wrong recipient. Always verify your withdrawal details carefully before confirming the transaction.