Do I owe US tax on winnings from an offshore crypto casino?

Yes. US taxpayers owe income tax on gambling winnings from any source, foreign or domestic, licensed or not. Offshore crypto casinos do not file W-2G or any other information return with the IRS, which changes who does the paperwork — you — but not whether tax is owed. IRS Topic 419 states gambling income is fully taxable and must be reported.

What is the 90% gambling loss rule starting in 2026?

The One Big Beautiful Bill Act, signed in July 2025, limits the gambling-loss deduction to 90% of losses beginning with tax year 2026, still capped at the amount of winnings. Under the prior rule a break-even year meant no taxable gambling income; under the new rule a player who wins $100,000 and loses $100,000 deducts only $90,000 and pays tax on $10,000 of income they never kept. The Joint Committee on Taxation projected roughly $1.1 billion in added revenue over ten years.

Can I deduct gambling losses if I take the standard deduction?

No. Gambling losses are an itemized deduction. A taxpayer taking the standard deduction reports all gambling winnings as income and deducts none of the losses — this has been true for years and is separate from the 2026 change. For casual players with modest wins, this is often the rule that actually determines the bill.

How is gambling with crypto taxed differently from gambling with dollars?

There are two separate tax events instead of one. The gambling win itself is ordinary income at the coins' fair market value when won. Separately, spending or converting crypto is a disposal under IRS digital-asset rules, so the coin's price change since acquisition produces a capital gain or loss of its own. A player who deposits appreciated bitcoin has a taxable disposal at the moment of wagering, before any gambling outcome.

Will the casino report my winnings to the IRS?

A US-licensed operator issues form W-2G above certain thresholds. Offshore crypto casinos issue nothing to the IRS. The absence of paperwork does not reduce what is owed; it removes the safety net that would remind you. Chain analytics also mean crypto flows are more traceable in practice than the anonymity framing suggests.

guide

Do You Owe US Tax on Crypto Casino Winnings? Yes — and From 2026 Even Breaking Even Can Cost You

US gambling winnings are taxable income whether or not the casino reports anything, and offshore crypto casinos report nothing. From tax year 2026 the One Big Beautiful Bill Act caps loss deductions at 90% of losses — a player who wins and loses $100,000 now owes tax on $10,000 of phantom income. Written August 2026; not tax advice.

By Casino Aurum Editorial Team · How We Rate

Published: 2026-08-19 · Updated: 2026-08-19 · 3min read

Key takeaways

US gambling winnings are fully taxable as ordinary income whether or not any form is filed, and offshore crypto casinos file nothing — the reporting obligation is entirely the player's (IRS Topic 419).
From tax year 2026, the One Big Beautiful Bill Act (signed July 2025) limits the gambling-loss deduction to 90% of losses, still capped at winnings. A player with $100,000 in wins and $100,000 in losses can deduct only $90,000 and owes tax on $10,000 they never kept.
Gambling losses are deductible only for taxpayers who itemize. A player taking the standard deduction cannot offset gambling winnings with losses at all — a rule that predates the 2026 change.
Gambling with crypto creates a second, separate taxable event: wagering or cashing out coins is a disposal, so the coin's price movement since you acquired it produces its own capital gain or loss on top of the gambling income (IRS digital-asset guidance).
Bills seeking to restore the full 100% loss deduction — including the FAIR BET Act — were pending but not passed as of August 2026, so the 90% limit stands for the 2026 tax year.

US gambling winnings are taxable income, from any casino, in any currency, whether or not anyone reports them — and from tax year 2026, even a break-even year can leave you owing tax. The One Big Beautiful Bill Act, signed July 2025, caps the gambling-loss deduction at 90% of losses. Written August 2026. This page is general information about US federal rules, not tax advice; a tax professional who knows your situation is the right source for decisions.

Do offshore crypto casino winnings count as taxable income?

Yes, all of them. IRS Topic 419 is unambiguous: gambling income is fully taxable and must be reported, and the rule does not care whether the operator is licensed in the US, Curaçao or nowhere. What changes with an offshore crypto casino is the paperwork: a US-licensed operator files form W-2G above set thresholds, while an offshore operator files nothing. No form arriving does not mean no tax owed — it means the entire reporting burden is yours.

What changes in 2026: the 90% rule

Under the law in force through tax year 2025, losses were deductible up to the amount of winnings — a break-even gambler owed nothing on the activity. From tax year 2026, the deduction is capped at 90% of losses (still limited to winnings):

	Through 2025	From 2026
Winnings	$100,000	$100,000
Losses	$100,000	$100,000
Deductible	$100,000	$90,000
Taxable gambling income	$0	$10,000

That $10,000 is income the player never kept — the industry has taken to calling it phantom income. The higher your turnover, the larger the phantom figure grows, which makes this change bite hardest for exactly the high-volume play crypto casinos court. The Joint Committee on Taxation projected the change raises about $1.1 billion over ten years.

Bills to restore the full deduction — the FAIR BET Act among them — were introduced with bipartisan support but had not passed as of August 2026. Until one does, the 90% limit is the law for 2026 filings.

The rule that catches casual players first

Losses are an itemized deduction. If you take the standard deduction — as most taxpayers do — you report every dollar of winnings as income and deduct none of your losses. This is not new and it is not crypto-specific, but it surprises more casual players than the 90% rule will: a hobbyist with $3,000 in wins and $3,000 in losses who takes the standard deduction owes tax on the full $3,000.

Crypto adds a second taxable event

Gambling with crypto is taxed twice over, in two unrelated ways:

The gambling win is ordinary income at the coins’ fair market value at the moment you win them.
The coins themselves are property under IRS digital-asset rules. Wagering them, converting them, or cashing out is a disposal, and the price movement since you acquired them is a capital gain or loss of its own.

Deposit bitcoin you bought years ago and the disposal gain can exceed anything that happens at the tables. Win coins, hold them, and cash out after a rally, and the rally portion is a capital gain on top of the gambling income already recognised. Anyone playing at volume needs records of acquisition dates and cost basis, not just session results — which is also the practical reason to complete KYC and keep withdrawal records tidy rather than treating the account as informal.

What this means in practice

Keep session records now, not at filing time. Dates, amounts wagered, wins, losses, and the coin values involved. Topic 419 expects records supporting both income and any deduction.
The 90% rule makes high-turnover play strictly more expensive even at break-even. It compounds the house edge we measured across 44 million simulated bets: the games take their percentage, and from 2026 the tax code takes a percentage of the churn too.
Anonymity is thinner than it looks. Offshore operators report nothing, but chain analytics make crypto flows traceable, and the legal duty to report never depended on the operator’s paperwork.
State taxes are their own question. Several states tax gambling income on different terms than the federal rules described here; that is beyond this page’s scope.

This page describes US federal rules in general terms as of August 2026 and is not tax, legal or financial advice. Rules change — two of the bills above would change this one — and individual situations differ. Play only what you can afford to lose, where it is legal for you.

FAQ

Do I owe US tax on winnings from an offshore crypto casino?: Yes. US taxpayers owe income tax on gambling winnings from any source, foreign or domestic, licensed or not. Offshore crypto casinos do not file W-2G or any other information return with the IRS, which changes who does the paperwork — you — but not whether tax is owed. IRS Topic 419 states gambling income is fully taxable and must be reported.
What is the 90% gambling loss rule starting in 2026?: The One Big Beautiful Bill Act, signed in July 2025, limits the gambling-loss deduction to 90% of losses beginning with tax year 2026, still capped at the amount of winnings. Under the prior rule a break-even year meant no taxable gambling income; under the new rule a player who wins $100,000 and loses $100,000 deducts only $90,000 and pays tax on $10,000 of income they never kept. The Joint Committee on Taxation projected roughly $1.1 billion in added revenue over ten years.
Can I deduct gambling losses if I take the standard deduction?: No. Gambling losses are an itemized deduction. A taxpayer taking the standard deduction reports all gambling winnings as income and deducts none of the losses — this has been true for years and is separate from the 2026 change. For casual players with modest wins, this is often the rule that actually determines the bill.
How is gambling with crypto taxed differently from gambling with dollars?: There are two separate tax events instead of one. The gambling win itself is ordinary income at the coins' fair market value when won. Separately, spending or converting crypto is a disposal under IRS digital-asset rules, so the coin's price change since acquisition produces a capital gain or loss of its own. A player who deposits appreciated bitcoin has a taxable disposal at the moment of wagering, before any gambling outcome.
Will the casino report my winnings to the IRS?: A US-licensed operator issues form W-2G above certain thresholds. Offshore crypto casinos issue nothing to the IRS. The absence of paperwork does not reduce what is owed; it removes the safety net that would remind you. Chain analytics also mean crypto flows are more traceable in practice than the anonymity framing suggests.

Do offshore crypto casino winnings count as taxable income?

What changes in 2026: the 90% rule

The rule that catches casual players first

Crypto adds a second taxable event

What this means in practice

FAQ

Sources

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