Casinos, racetracks, and other gaming operators are responsible for complex tax reporting whenever players win big. The IRS requires winnings that meet certain thresholds to be reported on Form W-2G, Certain Gambling Winnings. Understanding the nuances of these requirements is essential for operators to remain compliant and avoid costly mistakes.
This guide covers when W-2G reporting is required, key definitions, 2025 deadlines, and practical steps for compliance. Whether you’re new to gaming tax rules or updating your processes for the new year, you’ll find what you need to keep your reporting on track.
Note: This information is for informational purposes only and does not constitute formal tax, legal, or compliance advice. Always consult with qualified tax advisors, legal counsel, and your organization’s internal teams for guidance specific to your situation. Additional regulations may apply. For the most accurate and up-to-date information, refer to official government resources and regulatory agencies.
What Is Form W-2G?
Form W-2G is used to report gambling winnings and federal income tax withheld on those winnings. It provides both the IRS and the recipient with an official record of taxable gambling income, which is crucial for accurate tax filing and reporting.
You must issue a W-2G if payouts meet or exceed IRS thresholds, which vary depending on the type of gambling:
- Lotteries and sweepstakes – $600 or more (and at least 300 times the wager).
- Bingo or slot machines – $1,200 or more.
- Keno – $1,500 or more (net of wager).
- Poker tournaments – $5,000 or more (net of buy-in).
- Other gambling (such as betting pools) – $600 or more if the payout is 300x the wager.
Why this matters: Failure to issue W-2Gs when required can result in IRS penalties and delays for winners trying to file their taxes.
Compliance Requirements for W-2G Filings
When you prepare Form W-2G, make sure to include:
- Winner’s name, address, and Social Security number.
- Date and type of gambling.
- Amount won and amount wagered.
- Federal income tax withheld (if any).
In certain cases, you may need to withhold 24% of winnings for federal income tax and report that withholding on the W-2G. This is called backup withholding and typically applies when the winner fails to provide a valid taxpayer identification number, or when the IRS notifies you that backup withholding is required. (W-2G Backup Withholding)
2025 Filing Season Deadlines
W-2G forms follow the same filing season as W-2s, but the submission deadlines differ depending on the recipient:
- To Recipients: Furnish Form W-2G to winners by February 2, 2026 (since January 31 is a Saturday).
- To the IRS (e-file): Submit electronically by March 31, 2026.
Missing a deadline can mean penalties for your business and headaches for your customers who need W-2Gs to file on time.
Extensions
If you need more time:
- To furnish to recipients: File Form 15397 before the original deadline.
- To file with the IRS: File Form 8809 as soon as possible.
Extensions are not automatic, so keep records of your request in case of an audit. Requesting an extension early helps you avoid missing a deadline and risking penalties.
What Happens If You File Incorrectly?
If you file W-2Gs late or with errors, you could face:
- IRS penalties range from $60 to $680 per form, depending on how late or inaccurate the filing is.
- Frustrated customers if winners can’t file their taxes on time, which can hurt your reputation.
Dive into specific updates around the general W-2 Form, including more information on IRS penalties in 5 Things You Must Know About the 2025 Form W-2.
Best Practices and Final Thoughts on W-2G Compliance
Form W-2G may only apply to certain employers, but compliance matters for every gaming business. Build strong processes with regular staff training, routine audits, and clear communication with winners. Staying on top of deadlines and reporting rules helps you avoid penalties and earn your customers’ trust.
With Greenshades, you can handle W-2G forms together with W-2s and 1099s, so your year-end reporting stays accurate, compliant, and efficient.
