Superbowl 2023: Here’s How Betting On The Game Affects Your Tax Bill

Betting on the Superbowl 2023 has been allowed in more U.S. states as legal sports wagering. The money won in betting on the game is considered as taxable income, while the loss can be deducted.

To date, 33 U.S. states and the District of Columbia authorize at least some type of legal sports wagering, says the American Gaming Association. It is projected that around $1.1 billion will be wagered on major sporting events like the Superbowl 2023 in comparison to the $950 million wagered in 2022. According to Keshner, it is also estimated that more than 50 million Americans will be betting on Superbowl 2023. In estimation, this will total to $16 billion including informal bets and pools among peers.

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How Betting on Superbowl 2023 Affects Tax Bill

According to Winters, the Internal Revenue Service (IRS) states that the money won through betting on the Superbowl 2023 is considered as taxable income. In general, when an individual wins $600 or more, a W-2G form is expected to be received. This form is used by the IRS to confirm the total income when processing tax returns. If the amount of the winnings is $5,000 or more, the Superbowl 23 may withhold up to 31% for federal income tax.

On the other hand, losses in betting on the Superbowl 2023 can be deducted, albeit not easily. The winnings and losses in betting are reported separately in the tax returns. The cost of wager can be deducted as a loss as well, but losses cannot exceed the winnings that are reported as income. In addition, losses can only be claimed if deductions are itemized on Schedule A of Form 1040.

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