Sports Betting Q&A
Frequently asked questions about sports betting

What is the tax rate on sports betting winnings?

Last Updated: May 6, 2020
Fact Checked By: Adam Zdroik

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
Pennsylvania34% of revenue
Rhode Island51% of revenue
Tennessee20% of revenue
Washington D.C.10 % of revenue
West Virginia10% of revenue

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