Home Midwest Illinois Sports betting expert offers advice on paying taxes for gambling winnings

Sports betting expert offers advice on paying taxes for gambling winnings

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(The Center Square) – Tax season is underway, and Illinois sports bettors may need to pony up to the IRS and the Illinois Department of Revenue depending on their winnings.

Illinois is one of the top sports betting states in the country, so it is likely that some will have to pay taxes on proceeds, which is considered taxable income. Illinois was the third largest sports betting market in the country in 2023. According to the Illinois Gaming Board, there were more than 324 million wagers placed at either retail sportsbooks or on sports betting apps.

Rotowire media analyst Nick Whalen said they are offering advice on how to navigate sportsbook winnings and losses.

“A lot of people are either asking us or searching for information on paying taxes if they win a bet on Draftkings,” Whalen said. “It touches on what are the thresholds where you do have to pay taxes and does it apply to winning a fantasy league, things of that nature, as well.”

Keeping a meticulous record of betting activities is important, and most sports betting apps will do the work for you. Whalen adds that when it comes to deductions, itemizing is key to claiming losses and should be based on your overall tax situation.

The Illinois Department of Revenue says “you must pay Illinois Income Tax on the gambling winnings.”

“You must complete Form IL-5754 if you receive payment of Illinois lottery winnings of $1,000 or more; or gambling, pari-mutuel wagering, and sports wagering winnings that are subject to federal withholding (more than $5,000),” the IDOR tax form says.

Whalen said with the success of Illinois’ sports betting industry, he sees other states following suit.

“The states that have yet to flip or are still waffling on it at the legislative level, I think they see the amount of money that is coming into other states,” said Whalen.

The sports betting industry has blossomed thanks to a 2018 U.S. Supreme Court ruling. Since then, 38 states and the District of Columbia have allowed some form of sports betting.

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