Tax Implications of Winning March Madness Bets

If you win money betting on March Madness, you may owe taxes on your winnings. Gambling winnings are considered taxable income in the U.S., and bettors are responsible for reporting them to the IRS.

Do You Have to Pay Taxes on Sports Betting Winnings?

Yes. The IRS treats gambling winnings—including sports betting—as taxable income, meaning you must report them on your tax return. This applies to:

• Sportsbook winnings (online or retail)
• March Madness futures and prop bets
• Parlays, moneylines, and spread bets
• Bracket pool prizes (if cash-based)

How Are Sports Betting Winnings Taxed?

• Federal Tax: The IRS requires you to report all gambling winnings, and they may be taxed at a rate of up to 24% depending on your total income.
• State Tax: Some states tax gambling winnings separately, while others do not.
• W-2G Forms: If you win $600 or more from a sportsbook, the operator may issue you a W-2G form, which reports winnings to the IRS.

Can You Deduct Gambling Losses?

Yes, but only if you itemize deductions on your tax return. You can only deduct losses up to your winnings and must keep detailed bet records.

What About Bracket Pools?

• If a cash-based bracket pool offers a large prize, winners may need to report the income.
• Office pools or informal contests generally go untaxed unless winnings are significant.

Tips for Handling Taxes on Sports Betting Winnings

While winning from March Madness betting sites is exciting, it’s important to understand the tax responsibilities that come with it.

Our top betting sites for [march]

1.

4.8/5

DraftKings Review

New Customers: Bet $5+ Get $300 in Bonus Bets If Your Bet Wins + 3 Months of League Pass On Us!

USA Welcome

Bet now

21+, Other T&Cs Apply

2.

4.6/5

Bet365 Review

Bet $5 & Get $200 in bonus bets

USA Welcome

Bet now

Minimum $10 deposit required. Minimum odds -500 of greater. Bonus Bets wager excluded from returns. New customers only. T&CS, time limits and exclusions apply. This Referral Code is used for marketing/tracking purposes only. $10 minimum deposit. Paid in Bonus Bets. Bonus Bets wager excluded from returns. New customers only. Available in app only. Max. prize, game restrictions, time limits and T&Cs apply. GAMBLING PROBLEM? CALL OR TEXT 1-800-GAMBLER (AZ/CO/IL/IN/KS/KY/LA/MD/NC/NJ/OH/PA/TN/VA) or 1-800-BETS OFF (IA). 21+ (18+ KY). Must be present in AZ/CO/IA/IL/IN/KS/KY/LA (select parishes)/MD/NC/NJ/OH/PA/TN/VA.

3.

4.6/5

BetMGM Review

Up To $1500 in Bonus Bets Paid Back if your First Bet Does Not Win

USA Welcome

Bet now

Gambling problem? Call 1-800-GAMBLER (Available in the US) Call 877-8-HOPENY or text HOPENY (467369) (NY) Call 1-800-327-5050 (MA) 21+ only. Please Gamble Responsibly. Call 1-800-NEXT-STEP (AZ), 1-800-BETS-OFF (IA), 1-800-981-0023 (PR). Rewards are non-withdrawable bonus bets that expire in 7 days. In partnership with Kansas Crossing Casino and Hotel. See BetMGM.com for Terms. US promotional offers not available in DC, Mississippi, New York, Nevada, Ontario, or Puerto Rico.

4.

4.5/5

Caesars Review

Bet $1, Double your Winnings on your Next 20 Wagers. Up to $25 Max Bet Per Boost

USA Welcome

Bet now

21+ New users only. Must register using eligible promo code. First bet after registration must qualify. Max. Bonus Bet: $1,000. Bonus Bet expires 14 days after receipt. Void where prohibited. See Caesars.com/promos for full terms. Gambling Problem? 1-800-GAMBLER (1-800-426-2537)

5.

4.4/5

Hard Rock Bet Review

Bet $5 & Get $150 in Bonus Bets If You Win

USA Welcome

Bet now

The promotion is available for all new players on Hard Rock Bet. An initial deposit is required, and the players first cash bet must be at least $5 to qualify. Additionally, the qualifying wager must win to receive the $150 in Bonus Bets. To be eligible, the Player must be at least 21 years old, physically located in a Eligible Jurisdiction: AZ, IL, IN, NJ, OH, TN, or VA, and not on any exclusionary lists in any Eligible Jurisdiction. Excluded patrons are prohibited from participating in Promotions. To be eligible all personal and contact data associated to your account must be verifiable. | T&C apply | Gambling Problem? Call 1-800-GAMBLER

To make sure you get accurate and helpful information, this guide has been edited by Nick Slade as part of our fact-checking process.