Do you pay taxes on sports betting in Maryland?
Yes. Sports betting winnings are taxable income in Maryland and under U.S. federal law.
If you win money from a legal sportsbook, that income must be reported. This applies whether you:
Withdraw your winnings
Leave them in your account
Win from a single big bet or many small ones
There is no “tax-free” threshold for casual betting. All gambling winnings are technically taxable.
Federal vs state taxes
Two layers apply:
Federal tax – required by the IRS
Maryland state tax – required by the state
Sportsbooks may automatically report certain wins to the IRS using Form W-2G. This usually happens when:
Your win exceeds a specific amount
The odds meet reporting thresholds
The payout is considered significant
When that happens, the sportsbook also reports the win to the state.
Even if you do not receive a form, you are still responsible for reporting winnings on your tax return.
Do sportsbooks withhold taxes automatically?
Sometimes.
For large wins, sportsbooks may:
Withhold a portion of your payout
Issue a tax form
Report the transaction
For smaller wins, they usually do not withhold anything. You receive the full payout and are expected to report it yourself.
This is why tracking your betting activity matters.
Can you deduct losses?
Yes, under federal rules, you may deduct gambling losses up to the amount of your winnings, but only if:
You itemize deductions
You maintain proper records
Losses do not exceed winnings
Maryland generally follows federal treatment, but personal tax situations vary.
This is not tax advice. Serious bettors should consult a tax professional.
What records should you keep?
If you bet regularly, keep:
Deposit history
Bet slips or bet logs
Win/loss statements from sportsbooks
Withdrawal records
Most legal apps provide downloadable account statements. Use them.
Good records protect you if questions arise and simplify tax filing.
Why this matters
Taxes do not affect whether betting is profitable.
They affect whether profits stay yours.
Ignoring reporting rules can lead to:
Penalties
Interest
Audits
Legal sportsbooks operate inside U.S. law. Winnings are visible to regulators. Treat betting like any other taxable activity.
Want to bet legally and transparently in Maryland?
Use licensed sportsbooks that provide clear records and compliance.
👉 View the best Maryland sportsbooks
