Most sportsbooks and casinos will begin withholding federal taxes from your winnings on payouts of $5,000 or more. There, bettors report their winnings as well as any federal income tax withheld on those winnings. The IRS should automatically receive a copy, which alerts them to what you owe. If you win $600 or more over the course of a year, sportsbooks and casinos will issue you a 1099 or W2-G. “If you won $10 on an office pool… chances are they are not going to know-that doesn’t relieve you of the obligation under the law.” If you fall under the casual bettor category, you are still required by law to report your winnings as part of your taxable income. There, professionals may list their winnings and write off associated expenses (including wagers lost, travel costs and even your Action Network PRO subscription). Professional bettors report their winnings as self employment income under Schedule C within the 1040. 'Most people are going to fall into the casual bettor mode.' If money from gambling is your main source of income the IRS considers you a professional bettor, which has some tax advantages compared to casual bettors.

So if you won $1,000 at DraftKings but lost $1,500 at FanDuel over all of 2021, you can only write off $500 in losses.

Yes, but you can never write off more than you've won and to do so you must itemize your deductions, unless you bet for a living.

How does fanduel sportsbook taxes work