Sports Betting in 2025
Summer is coming to an end, and fall will soon be upon us. What is fall so often associated with? Of course, there’s the cooler weather and the joy of the upcoming holidays – but one thing I enjoy greatly about fall is the beginning of football season. If you are like me, you’ll spend your Saturdays and Sundays watching games while enjoying time with friends and family. One thing you will notice when watching sports these days is the overwhelming number of advertisements being pressed upon us from sports books and gambling companies.
In the past few years, sports gambling has become more of a cultural norm than something you once just heard about. The access and ease of downloading an app and depositing funds has prompted many to begin gambling who would have otherwise not have done so. In 2018, the Supreme Court ended its federal ban on sports gambling, allowing individual states to make their own call on what is legal and what is not. By January 1st of 2025, 38 states had some legal form of sports betting. According to the American Gaming Association, the sports betting industry recorded $13.71 billion in revenue in 2024. That is a 25% increase from 2023! It is safe to say this industry has a full head of steam.
If you have ever been to a casino or gambled before, you know how much of a thrill a win can be. With the social aspect and entertainment that comes with watching sports and the ease of placing a wager in today’s world, it is so crucial that this is done responsibly. As a CPA, I am always considering cash flows and the opportunity cost of dollars here or dollars there. Here are a handful of things to consider regarding legal sports betting and gambling in general:
- Never bet outside of your means. If sports gambling is your choice for entertainment, make sure it is within your current entertainment budget.
- Never compromise retirement contributions or other long term financial goals for gambling costs.
- The psychological trap of winning on the next bet should never allow for the consideration of taking on any additional debt (such as credit card debt) to place a wager.
- All winnings are considered taxable income, even if you do not receive a W-2G from the casino or sportsbook, and should be reported on your tax return
- It is possible to deduct gambling losses, but only if you are eligible to itemize deductions, and losses cannot be larger than your winnings in a single year. Losses also cannot be carried forward into future years. It is also important to note that in 2026 as part of the One Big Beautiful Bill Act (OBBBA), you will only be able to deduct 90% of your gambling losses if you itemize deductions.
Sports gambling and gambling in general are here to stay. As a general guideline, we should always know where our dollars go and the potential impact of how we spend them. If you do participate in gambling, always do it responsibly and do not let it deter your long-term financial aspirations.
Hayden Schilling, CPA is a staff accountant for Keller & Associates CPAs, PLLC.
Published in the Victoria Advocate.
