President Donald Trump signaled he may consider ending federal taxes on gambling winnings during recent remarks made aboard Air Force One. While emphasizing tax relief already delivered on tips, Social Security, and overtime, Trump responded to a question about gambling taxes with a noncommittal but notable reply: “I’m gonna have to think about that.”
According to Fox Business Network, the comment came amid broader discussions about economic relief and tax policy under a potential second Trump administration. Gambling taxes currently require winners to report earnings over $600 per bet via W-2G forms. Any winnings above $5,000 are subject to a 24 percent federal withholding. In addition, winners must provide their Social Security numbers or face a steeper 31 percent penalty on payouts.
The current IRS rules apply broadly across all gambling formats, including casinos, sports betting, horse racing, lotteries, and raffles. Winnings are reported as “other income” on IRS Form 1040, meaning they are taxed at the individual’s personal income rate if not subject to withholding.
Data from the American Gaming Association shows the massive scale of gambling in the U.S., with nearly 60 percent of American adults participating in some form of gambling over the past year. Thirty percent gambled at casinos, and 21 percent placed sports bets. Legal NFL gambling alone is projected to reach $30 million this year. The Super Bowl generated an estimated $23.1 billion in wagers last year.
Ending federal taxes on gambling winnings could open up a significant new avenue of voter support among gamblers and workers in the gaming industry. Some analysts suggest such a move could boost betting participation and attract new gamblers deterred by current IRS rules.
While no formal policy has been announced, Trump’s willingness to consider the idea could spark debate over whether gambling winnings should be taxed as income or left untouched, like tips or Social Security under his proposals.
