Part III: Business & Regulation · Banking, Chips & Financial Operations

56. Tax Withholding

Financial Transactions

Tax withholding on gambling winnings is the federal (and sometimes state) income tax that casinos are required to withhold from certain gambling payouts before paying the winner. Regular gambling withholding at 24% applies to winnings from sweepstakes, wagering pools, lotteries, and sports betting when winnings minus the wager exceed $5,000 and the payout is at least 300 times the wager. Backup withholding at 24% applies when a winner fails to provide a valid taxpayer identification number (TIN). Noncash payments (such as automobiles or trips) valued over $5,000 are subject to withholding at 31.58% if the payer pays the tax on behalf of the winner. Withheld taxes are reported on Form W-2G and remitted to the IRS via Form 945.

In practice

Regular gambling withholding does NOT apply to bingo, keno, or slot machine winnings, but backup withholding applies if no TIN is provided. State tax withholding requirements vary by jurisdiction.

One entry from the Casino Industry Glossary — 1,157 terms written for surveillance, compliance and operations professionals rather than for players. Definitions describe industry usage; where a term carries a regulatory meaning, verify against the instrument that governs your jurisdiction.