Do you have to pay taxes on gambling winnings?

According to the Internal Revenue Service, gambling winnings are fully taxable and must be reported to the IRS. This includes money won from the lottery and horse racing as well as casinos. It is the taxpayer's responsibility to claim all winnings.

According to Bankrate, when a gambler wins a certain amount of money, for instance, $600 or more at the horse track or $1200 or more at a slot machine, the payer will issue the winner a W2-G form. In addition, they will take the winner's Social Security number and report the winnings to the IRS. Gamblers are allowed to deduct a certain amount of their gambling losses from their taxes each year.