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About

What you need to know to maximize your free winnings

Purpose

This website is designed to help users analyze, compare, and structure sports betting opportunities from a mathematical and risk-management perspective. In other words, to help you. In no way do I support the rampant gambling industry that preys on addicts. New user promotions are in essence a door these corporation use to give people a taste of the thrill of gambling. They make money not from the recreational sporadic gambler but from the addicts that lose tremendous amounts and gamble not from reason but because of a medical disease. It is for this reason that I cannot urge enough that you should never start on the path of making a single wager that is not fully arbitraged for a profit independent of any outcome. While you may be an individual that would not fall into this trap, remember that a potential gambling addict thinks that very thing and that intelligence by no means protects a person. So, after fully utilizing new user promotions, it is surely in your best interest to self exlcude yourself from a sportsbook.

Taxes

Though Trump has openly discussed ending gambling taxes, by the letter of the law today, all gamblings winnings are taxable and should be reported even if no tax forms are issued. Any losses can only be deducted from winnings if you itemize your deductions, and even then you can only deduct up to 90% of your losses on your federal taxes. Therefore, if one was going to report every single wager they made or office fantasy football league, even if no tax forms have been issued and there is no way the IRS would have known about your gambling, it typically does not make financial sense for someone not itemizing their deductions to sports bet. Someone not itemizing their deduction and reporting every individual wager they make would only have an expected profit on any wager if the true probability of winning a bet was so much greater than the wagering odds implied that the inherent vig and taxes to the government didn't drive your EV negative. Match betting in arbitrage oppurtunities at first glance should be even worse for someone reporting by the letter of the law, mathematically guaranteeing a net loss. I said should here because you can legally by IRS rules, when you self report, consider your wagering to happen in sessions. With this logic, hedging between two different sportsbook can be treated as all part of one session and thus you would report the net profit you had during that session - somone itemizing their deduction or using standard deduction can use this session logic. In fact, using this logic, you can take advantage of new user promotions and then just pay taxes on your profits from each gambling session which you can identify as when you matched bet across sportsbook to take advantage of a new user promotion -- you would then essentially legally be paying your true total taxes but only being taxed on your net profits. Of course, you could also not pay any taxes by not self reporting and none would be the wiser. I maintain again self reporting is just as required here as a wager with a friend on the Super Bowl would be, and that if you morally are okay not reporting the wager with a friend, you should morally be okay not reporting a wager on DraftKings e.g.. On the topic of treating gambling as sessions, you should know that if you do not report your profit per session, sportsbook, dates, wagers, etc but rather a single gamblings winnings number. The only reason I spoke about the sessions logic is that if the IRS for some unknown reason audited you and got ahold of every individual bet you made with on a sportbook, you could truthfully use sessions logic to explain with documented records why you only reported your net profit as your gambling winnings. This is of course absurd but I bring this up to alleviate the concerns of someone arbitrage betting insanely large amounts. Traditional sportsbook have limits on their wagers, but as inevitable arbitrage oppurtunity arise between traditional sportsbook platforms, if you somehow were able to bet a cumulative $100 million sum on different sides with a guaranteed profit from the arbitrage of $100,000, you could legally, without fear of misreporting, use the standard deduction and only list $100,000 as your gambling winnings.

With that said, let me clear up what actually goes on with issuing tax forms and the different rules for different sports betting platform types. While I can't openly promote tax evasion, the IRS basically is by having near zero reporting enforcement requirements on traditional sportsbook and relying entirely on self reporting. These are the most important things you should know if you don't want to pay any taxes on your sports betting winnings and get away with it:
  • The current threshold for 2026 tax year for issuing 1099-MISC is $2000 as a result of Trump's One Big Beautiful Bill Act which raised it from $600. Moving on to the 2027 tax year and so on, the $2000 figure will continue to rise in accordance with inflation. Betting platforms like DFS operators and sweepstake sportbooks which potentially issue 1099-MISCs may still on their websites or in customer support reference this old $600 threshold but trust that by February 2027 these platforms will 100% be using the $2000 threshold.
  • Different states have different rules on how gambling winnings are taxes, some more punitive than others. As I speak to below, the only realistic tax form that can come out of online sports betting is a 1099-MISC from sweepstake sportsbooks and DFS operators. Since these companies operate nationally, they live out of the scope of state tax department which were not designed to tax this ecosystem -- this is true even if a state does not raise their 1099-MISC threshold requirements to federal level. Hence, if the federal government is not made aware of your gambling, your residency state will not be aware either.
  • Online sports gambling — whether through state-regulated sportsbooks/DFS or sweepstakes/social sportsbook platforms — operates within regulated financial systems that require full KYC (Know Your Customer) identity verification, typically including your legal name, date of birth, address, and often your Social Security number before withdrawals. As a result, there is a clear digital paper trail linking you to the platform and your transactions. However, unless a reportable tax form (such as a W-2G or 1099-MISC) is generated and sent to the IRS, the federal/state government will not be aware that you engaged in any gambling activity. Similarly, standard ACH deposits to and withdrawals from state regulated or sweepstakes platforms are processed like ordinary bank transfers and do not trigger IRS notifications (i.e. a 1099-K tax form) simply because the transaction involves a gambling operator -- frequency or sizes of these bank transfers do not change this fact. I don't know why someone would not withdraw to their bank directly but if you do withdraw using PayPal or Venmo, and you have over 20K transfer amount total across at least 200 transfers, a 1099-K could be issued (specific states have even lower thresholds) if that third party processor considereded these as a business transactions. Transfers from sportsbooks may not be flagged as such but given that ACH transfers 100% will not, you should withdraw using this method.
  • Traditional sportsbooks (i.e. DraftKings, BetMGM, Fanatics, etc.) will not report net winnings. Instead, they will only issue a Form W-2G for indivudal wagers that net at least $2000 (before Trump's BBB threshold was $600) and payout at least 300 times the wager amount. An enormous longshot wager like the type that would trigger a tax form should practically never be placed, essentially ensureing these sportsbooks will never issue a tax form for you. Additionally, many traditional sportsbooks will not even have a stat sheet for you, and those that do will will show your net result or gross winnings (including stakes so pointless). This information is useless for determining your taxes if you report your gamblings winnings strictly to the letter of the law. I mention this to highlight that nothing in the system of traditional online sportbook betting is pushing you to file accurately or at all. The IRS will certainly collect as much as they can from you, but they have made absolutely no effort to actually track any of this money for recreational gamblers. In fact, I would be completely shocked if the IRS ever tried to enforce the tracking of bets by recreational gamblers that do not reach the extreme W-2G threshold. It is much more likley instead that taxes on gamblings winnings are removed entirely like they are in Canada for recreational gamblers.
  • If you are taking advantage of a new user customer promotion on a Pick'em platform (i.e. PrizePicks, Underdog, Chalkboard, etc.) a 1099-MISC tax form will be issued if you have net earnings in a calendar year of at least $2000. Simply arbitraging wagers that exploit new user promotions and the free picks new customers receive, will not lead to netting anywhere close to $2000.
  • Platform-funded sweepstakes/social sportsbooks (i.e. Fliff, Onyx, Thrillzz, etc) where you purchase virutal coins that can be wagered and then redeemed for cash, are supposed to issue a 1099-MISC if you redeem (not net) at least $2000 in a calendar year. I say supposed to because there is zero current guidance by the IRS about how these platforms have to intepret themselves. By using the legal loophole of being a sweepstakes operator, purchases here include a ton of worthless coins along with a bonus of site credit virtual cash equivalent to the coin package price. This virtual cash (always after 1x playthrough) is redeemable for a prize redemption at a 1:1 US dollar rate. It is conceivable then that when a sweepstakes sportsbook then issues a 1099-MISC, they would report gross redemption as all the money spent by the customer is unrelated to a prize they are awarding. Users of course would hate this interpretation and rightly should, and so if the IRS does not give strict guidance about how these sweepstake sportsbook must report 1099s, these operators could legally defend reporting based on a user's actual net profit. Additionally, while there is not really a strong legal reason why this should happen, these operators often do not issue 1099-MISC even when their own reporting thresholds are passed. I would not trust that this will happen to you, but the truth is it happens. As for what you need to consider, platform funded sweepstakes sportsbooks do not offer new users promotion where the intepretation matters. Hence, it does not really matter what interpretation the operator subscribes to.
    Peer to peer sweepstake style social sportsbook operate similarly in terms of the packages of virtual coins to the platform counter, except instead of making bets against the platform, these sportsbooks act like financial exchanges where different users are betting against each other. For this reason, the markets are incredibly tight with NoVig and PropetX leading the way since they do not even charge commissions. In terms of how and at what threshold they report 1099-MISCs, interpreation is once again key since there is no official IRS guidance. However, this intepretation is incredibly important to you unlike before. Given the exchange design, these platforms are often the ideal place to make a hedge bet, which can lead to large and frequent bets being place on them. Therefore, while utilizing their new user promotions should not get you to a $2000 redemption, hedging bets made while utilizing new user promotions on other platmorms, certainly can.
  • Platforms like Kalshi are regulated financial exchanges under the Commodity Futures Trading Commission which means they, like a broker, will issue a 1099-B for all trades - friend referral bonuses are separate and given the $2000 threshold, will not lead to any tax forms.
  • Sporttrade is a licenced and state regulated sports betting exchange which means instead of a 1099-B, they like traditional sportsbooks, have a near impossible threshold for issuing tax documents -- the new user promtional cash back up to $100 may go toward a 1099-MISC threshold but this would certainly not amount to the IRS threshold.
  • Peer-to-peer sweepstake model social sportsbooks like NoVig, or 4Cx purposefully operate in a gray area that allows them for your purposes to not have to issue tax documents. By being peer-to-peer, redeeming virtual currency is argued to not be a payout from the platform but from other betters, a specific legal distinction that negates a 1099 requirement. Since this whole industry is still the wild west, the future of P2P in the coming years could change, whether that means more state issued cease and desist orders or legal model shifts. However, any regulatory reinterpretation if it even were to occur in the coming years, would unquestionably be prospective only.

In summary, taxes on gambling winnings, in no small part to the gaming industry and their lobbyists, rely almost exclusively on self reporting and are thus heavily underreported. The industry itself is rapidly changing and regulators are still trying to catch up on emergining businesses that exploit legal loopholes. However, this effort is focused almost exclusively on ensuring consumer protections and collecting large tax revenues from the platforms themselves. After all, the incredibly narrow W-2G thresholds are a policy choice, not an oversight.