Sports Betting Q&A
Frequently asked questions about sports betting
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What is the tax rate on sports betting winnings?

When PASPA was overturned in 2018, states began legalizing sports betting and introducing different taxes on revenue. Similar to gambling rules in general, each state has its own tax rules and rates.

In the below table, you can see the variety in tax rates across the country. Nevada is comfortable with a 6.75% rate because it's had legalized gambling for decades and knows how much money will be brought in. Other states like Illinois, Pennsylvania and Tennessee are new to the business and could drop tax rates in the future.

While Delaware, New Hampshire and Rhode Island are oddly high, their systems are a bit different than everyone else. New Hampshire decided on a monopoly grant to DraftKings, which remits 51% of gross revenue for online bets and 50% of in-person bets at casinos to the state lottery. Delaware and Rhode Island both have a revenue-sharing model where revenue is shared between state, casinos and operators.

Tax rates are built with the goal of getting each state enough revenue to deem sports betting worthwhile. While tax rates don't directly affect the odds, they can come into play and that's why odds you may see in Nevada are different than in other states. 

StateTax Rate
Arkansas13% of first $150 million in receipts, then 20%
Colorado10% of revenue
Delaware50% of revenue
Illinois15% of revenue
Indiana9.5% of revenue
Iowa6.75% of revenue
Michigan8.4% of revenue
Mississippi12% of revenue
MontanaLottery collects revenue minus expenses
Nevada6.75% of revenue
New Hampshire51% online; 50% retail
New Jersey8.5% of land-based revenue; 13% of online revenue
New MexicoTribal Lands
New York8.5% on land-based revenue; 12% on online revenue
North CarolinaTribal Lands
Oregon2.3%
Pennsylvania34% of revenue
Rhode Island51% of revenue
Tennessee20% of revenue
Washington D.C.10 % of revenue
West Virginia10% of revenue

Read More Sports Betting Q&As

More Questions To Read
Can you bet on sports with Venmo?
No, not legally. Most legal sportsbooks around the country won't allow you to make bets with Venmo.
Which states in US have legal sports betting?
As of 2020, there are 21 states (and Washington D.C.) that have legalized sports betting.
Can you bet on sports online?
Yes. But while betting on sports is legal in almost half the states in the country, not all of them allow online wagering.
When was sports betting legalized?
Sports betting was allowed to be legalized at a state level in 2018 after PASPA was struck down.
When will sports betting be legal in Indiana?
Sports betting in Indiana was legalized September 2019 and online gambling launched a few months later.
Is sports betting legal in Indiana?
Yes. Indiana passed a bill to allow sports betting in 2019 and wagering started in October with online betting opening a couple months later.
When will sports betting be legal in Michigan?
Michigan passed legislation to allow sports betting in December 2019 and the first physical sportsbooks opened March 2020.
Is sports betting legal in Michigan?
Yes. Michigan passed legislation to allow sports betting in December 2019 and the first physical sportsbooks opened in March 2020.
Is sports betting legal in Virginia?
Yes. Sports betting is legal in Virginia and residents began betting via FanDuel in January 2021.
When will sports betting be legal in Virginia?
Sports betting is legal in Virginia and residents began betting via FanDuel in January 2021.
When will sports betting be legal in South Dakota?
Sports betting is not legal in South Dakota, but residents passed a ballot initiative in the November 2020 election, which means it's on its way.
Is sports betting legal in South Dakota?
No. Sports betting is not legal in South Dakota, but residents passed a bill initiative in the 2020 election.
Is sports betting legal in North Carolina?
Yes. Sports betting is legal in North Carolina, but it's only available at two casinos, which weren't open as of early 2021.
When will sports betting be legal in North Carolina?
Sports betting is legal in North Carolina, but it's only available at two casinos, which weren't open as of early 2021.
When will sports betting be legal in Tennessee?
Yes. Tennessee sports betting was legalized in 2019 and launched in 2020.
Is sports betting legal in Tennessee?
Yes. Tennessee sports betting was legalized in 2019 and launched in 2020.
Is sports betting legal in Maryland?
No. Sports betting is not legal in Maryland, but residents voted Yes to legalize sports gambling in the November 2020 election.
When will sports betting be legal in Maryland?
No. Sports betting is not legal in Maryland, but residents voted Yes to legalize sports gambling in the November 2020 election.
Is sports betting legal in Louisiana?
No. Sports betting is illegal in Louisiana despite numerous attempts throughout the last couple years.
When will sports betting be legal in Louisiana?
Sports betting is illegal in Louisiana despite numerous attempts to legalize it the last couple years.
When will sports betting be legal in Iowa?
Iowa legalized sports betting in May 2019, becoming the 11th state to do so.
Is sports betting legal in Iowa?
Yes. Iowa legalized sports betting in 2019, becoming the 11th state to pass a bill.
When will sports betting be legal in Illinois?
Illinois passed sports betting legislature June 2019 and launched at physical sportsbooks March 2020, becoming the 15th state to offer wagering.
Is sports betting legal in Illinois?
Yes. Illinois passed sports betting legislature in 2019 and launched at physical sportsbooks in March 2020.
When will sports betting be legal in Colorado?
Colorado legalized in-person and mobile sports betting November 2019 after a bill was signed by the governor and then approved by voters.