Short answer: yes. The IRS treats all gambling income as taxable — whether it comes from a New Jersey-licensed casino or an offshore crypto site in Panama. Offshore casinos won’t do the paperwork for you, which makes it your responsibility. Here’s how it works.
I’m Otto Bergstrom. This is not tax advice — consult a licensed tax professional. 18+ only.
All Gambling Winnings Are Taxable
Under IRS rules on gambling income, gambling winnings are fully taxable and must be reported as income, regardless of where the casino is located or whether you receive any tax form. That includes:
- Slot and table-game winnings
- Poker and sports-betting profits
- Crypto casino winnings (valued in USD at the time you win)
There’s no minimum threshold that makes small wins tax-free — technically all of it is reportable.
Offshore Casinos Don’t Issue a W-2G
US-based casinos issue a Form W-2G for large wins and may withhold tax automatically. Offshore casinos do neither. No form arrives, and nothing is withheld — but the obligation to report doesn’t disappear. You report offshore winnings yourself as “Other Income” on Form 1040.
Because there’s no automatic paper trail, keeping your own records matters. Log your wins and losses with dates, sites, amounts and crypto values. This “gaming diary” is what backs up your return if questioned.
Can You Deduct Losses?
This is where people get it wrong. You cannot simply net losses against winnings and report the difference. Instead:
- Report your total winnings as income.
- If you itemize deductions on Schedule A, you may deduct gambling losses — but only up to the amount of winnings you reported, and only with records to back them up.
If you take the standard deduction (as most people do), you generally can’t deduct gambling losses at all. That means you could owe tax on winnings even in a year you finished down overall. A tax professional can tell you whether itemizing makes sense for you.
Crypto Adds a Wrinkle
Because offshore play runs on crypto, there can be a second taxable event: if the crypto you cash out has gained value between when you acquired it and when you sell or convert it, that gain may be taxable separately as a capital gain. Winning in crypto and later selling it are two different events for tax purposes. This is exactly the kind of thing to hand to a professional.
Practical Steps
- Keep a gaming diary: date, casino, buy-in, result, crypto amount and USD value.
- Save withdrawal records and TXIDs.
- Report total winnings as Other Income on Form 1040.
- Decide with a tax pro whether itemizing losses on Schedule A is worthwhile.
- Track crypto cost basis separately for capital-gains purposes.
FAQ
Do US players pay tax on offshore casino winnings?
Yes. The IRS treats all gambling winnings as taxable income, including from offshore casinos, regardless of whether you receive a tax form. Report them as “Other Income” on Form 1040. This is not tax advice — consult a professional.
Do offshore casinos report my winnings to the IRS?
No. Offshore casinos don’t issue W-2G forms or withhold US tax. Reporting is entirely your responsibility, which is why keeping your own records is essential.
Can I deduct my gambling losses?
Only if you itemize on Schedule A, and only up to the amount of winnings you reported, with records to back it up. You cannot net losses against winnings, and standard-deduction filers generally can’t deduct losses at all.
Are crypto casino winnings taxed differently?
The winnings themselves are ordinary income valued in USD when won. Separately, if the crypto gains value before you sell or convert it, that gain may be a taxable capital gain — a second event. Track your crypto cost basis and consult a tax professional.
Last updated: July 2026. Written by Otto Bergstrom for Balkasino. Not tax advice — consult a licensed professional. Play responsibly — 18+.