taxes and gambling winnings

It’s estimated that each year that hundreds of millions and perhaps even billions of dollars go unpaid on online winnings. In fact, most governments are not very concerned about these taxes, since online play is so difficult to monitor.

Legal sports betting in Nevada, however, is just a fraction of the domestic wagering picture. The Silver State's legal sports wagering represents less than 1 percent of all sports betting nationwide, according to the American Gaming Association.

The withholding rate for nonresident aliens is 30%. Not coincidentally, the tax rate for nonresident aliens is also 30%. So, if a citizen of a foreign country wins $1 million cash at a slot machine in Las Vegas, he will find he is paid only $700,000. The remaining $300,000 is sent to the IRS. The foreign citizen is unlikely to ever file an income tax return, but the IRS gets paid in full anyway.

Legal sports betting in Nevada, however, is just a fraction of the domestic wagering picture. The Silver State's legal sports wagering represents less than 1 percent of all sports betting nationwide, according to the American Gaming Association, which estimates $88 billion in illegal bets will have been placed on NFL and college football games this season.

Example 2 : Sally went to the casino each day, she spent $10 each day for 10 days. She won some and lost some, but went home empty handed except on the last day. She won $1,000 on day 10.  On day 1-9 Sally lost $90, on day 10 Sally netted $990 ($1,000-$10 basis). Sally will report $990 as other income. If she itemizes she can include $90 as a loss on Schedule A.

Macau has 33 casinos, of which the biggest is The Venetian Macao . Twenty-three casinos are located on the Macau Peninsula and ten on Taipa Island . They all operate under a government franchise and under a common set of rules.

To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer to Publication 529 , Miscellaneous Deductions , for more information.

To learn more about this topic, see Publication 525, Taxable and Nontaxable Income. Also, see Publication 529, Miscellaneous Deductions. Both are available at or by calling 800-TAX-FORM (800-829-3676).

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The withholding rate for nonresident aliens is 30%. Not coincidentally, the tax rate for nonresident aliens is also 30%. So, if a citizen of a foreign country wins $1 million cash at a slot machine in Las Vegas, he will find he is paid only $700,000. The remaining $300,000 is sent to the IRS. The foreign citizen is unlikely to ever file an income tax return, but the IRS gets paid in full anyway.