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Arizona Sports Betting Tax Calculator

Arizona taxes gambling winnings as ordinary income at 2.50% flat rate. Sports betting is legal (online and retail) in Arizona with operators including FanDuel, DraftKings, BetMGM. Arizona moved to a 2.5% flat tax in 2023. Sports betting legalized September 2021.

2.50%
State Tax Rate
Legal
Sports Betting
Yes
Loss Deduction
5
Sportsbooks

Calculate Your Arizona Sports Betting Tax

2026 rules: 90% loss deduction cap applies (OBBBA)

$

Your salary, wages, and other non-gambling income

$
$

Losses can only be deducted if you itemize deductions

You cannot deduct gambling losses with the standard deduction. Switch to itemized to deduct losses.

Your Take-Home from $10,000 in Winnings
$8,550
Total Tax: $1,450|Effective Rate: 14.5%

Tax Breakdown

Total Income (salary + winnings)$60,000
Standard Deduction-$16,100
Taxable Income$43,900
Federal Tax (12.0% marginal)$1,200
Arizona State Tax$250
Total Tax on Gambling Winnings$1,450
Net Take-Home$8,550

W-2G Form: Likely Required

Your total winnings of $10,000 exceed the $2,000 W-2G threshold for 2026. Individual wins that also meet the 300:1 odds requirement may trigger a W-2G form. Use our W-2G Checker for precise results.

Federal Withholding

$2,400 (24%) would be withheld at the time of payout. You may be due a refund of $1,200.

Arizona Gambling Tax Key Facts

  • ✓State income tax: 2.50% flat rate
  • ✓Sports betting: legal (online and retail)
  • ✓Available sportsbooks: FanDuel, DraftKings, BetMGM, Caesars, BetRivers
  • ✓Gambling loss deductions ARE allowed (must itemize)
  • ✓Flat tax rate of 2.5% on all income including gambling

How Sports Betting Taxes Work in Arizona

Arizona taxes gambling winnings as ordinary income at a flat 2.50% rate. Your gambling winnings are added to all other income and taxed accordingly.

Arizona allows gambling loss deductions following federal rules. Under the 2026 OBBBA, losses are deductible at 90% (capped at the amount of winnings) when itemizing deductions.

Arizona Allows Gambling Loss Deductions

Arizona follows federal rules for gambling loss deductions. The 2026 OBBBA 90% cap applies when itemizing.

Arizona Tax Example

A single filer in Arizona earning $60,000 with $10,000 in sports betting winnings and no losses

Salary Income$60,000
Gambling Winnings$10,000
Federal Tax on Winnings$2,200 (at the 22% marginal bracket)
Arizona State Tax$250 (2.50% flat rate)
Total Tax$2,450 combined federal + state
Net Take-Home$7,550 from $10,000 in winnings

Licensed Sportsbooks in Arizona

FanDuel
DraftKings
BetMGM
Caesars
BetRivers

You must be physically located within Arizona to place bets on these platforms.

Recent Arizona Gambling Tax Changes

Arizona moved to a 2.5% flat tax in 2023. Sports betting legalized September 2021.

Arizona Sports Betting Tax FAQ

How much tax do I pay on sports betting winnings in Arizona?

Arizona taxes gambling winnings at 2.50% flat rate on top of federal tax (10-37%). Your total combined tax rate depends on your income level and filing status.

Is sports betting legal in Arizona?

Yes, sports betting is legal (online and retail) in Arizona. Licensed operators include FanDuel, DraftKings, BetMGM, Caesars, BetRivers. You must be physically located within Arizona borders to place bets.

Can I deduct gambling losses in Arizona?

Yes, Arizona allows gambling loss deductions following federal rules. You must itemize deductions, and losses are limited to the amount of your winnings. The 2026 OBBBA 90% cap applies.

Arizona Tax Authority

For official tax guidance specific to Arizona, contact the state tax authority:

https://azdor.gov/↗

Calculate Your Arizona Sports Betting Taxes

Use our free calculator above to see exactly what you owe in Arizona.

Full Tax Calculator