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West Virginia is ahead of many US states and permits most forms of gambling online. The state benefits by taxing licensed operators and providing residents with safe and regulated gaming options. Anyone over 21 can enjoy wagering real money at retail and online sportsbooks and casinos, poker, keno, and bingo. There's also a lottery available to customers over 18.
WV online casinos and WV casino apps are all licensed and regulated by the West Virginia Lottery Commission and provide a safe environment for residents to gamble. There’s plenty of action available in the Mountain State, so let’s look at the legality and taxes of gambling under the West Virginia code.
Where Can I Legally Gamble Online in West Virginia
The West Virginia Lottery Interactive Wagering Act of 2019 was the legislation that opened real money online casino style gaming for anyone aged over 21 in the state. Before that, in 2018, the state passed the Sports Lottery Wagering Act, allowing prominent sportsbooks to begin locally licensed operations. Thanks to these laws, many reliable legal online gambling sites are open in West Virginia. Some popular options include Caesars Palace, BetMGM, Golden Nugget, FanDuel, BetRivers, and DraftKings.
Online Casinos
Online casinos are a popular attraction for many gamers in West Virginia. The state legalized casino gaming online after passing the Interactive Wagering Act. The first licensed casino to launch in WV was DraftKings, which went live in July 2020. Other big-name US operators, including Caesars Palace, BetMGM, BetRivers, Fanduel, and Pointsbet, soon followed. They provide customers a secure way to play hundreds of fun online slots, progressive jackpots, and live casino games. Many casinos have a West Virginia code to claim exclusive rewards on sign-up.
Online Poker
The state's Interactive Wagering Act includes grounds for legal online poker sites to offer services. Currently, online poker sites need to be set up in the state. However, recent news suggests it's only around the corner. In November 2023, they partnered with other regions like Michigan in the Multi-State Internet Gaming Agreement. This would allow local operators to share player pools and incentivize the launch of West Virginia online poker sites. These sites usually also offers online blackjack West Virginia titles, as well as online roulette WV variants.
Online Betting
The Sports Lottery Wagering Act (2018) opened online sports betting in West Virginia. Operators are licensed and regulated by the WV Lottery Commission. The state has several licensed online sportsbooks, including Caesars, BetRivers, BetMGM, Fanduel, DraftKings, and ESPN Bet. WV residents over 21 can sign up for these platforms and place online wagers on popular sports like the NBA, NHL, NFL, MLB, and MLS.
Online Lottery
The WV online lottery is state-run and available to customers over 18. Exciting draws are running regularly, including CashPop, offering up to $5,000 every 15 minutes. Customers can buy tickets to the WV Powerball, MegaMillions with Megaplier, Lotto America, and more. A popular choice is Keno, with a new game starting every three minutes and delivering round-the-clock action.
Who Regulates West Virginia Legal Gambling Sites?
West Virginia Lottery Commission is responsible for issuing licenses for all new WV online casinos and gambling sites and regulating activities. It was established in 1985 to assist the state-wide lottery operations. However, it has since expanded to cover online and retail casino gaming, sports betting, poker, and other gambling activities. All legal WV gambling sites must acquire licensing from the Lottery Commission. They must meet several special conditions, follow the gambling regulations, and pay income tax on the gaming revenue generated.
Are There Any Responsible Gambling Measures in Place?
To ensure customer safety, West Virginia has numerous regulations that sites must follow. These include verifying new registrants to ensure they’re over 21 and legally allowed to gamble online in WV. After logging into an online gambling site, users can find responsible gambling tools such as external help links to reliable organizations.
Other tools include deposit and betting limits, gaming session timers, pop-up notifications, and timeout options. Platforms also allow users to self-exclude or close the account if they wish to stop. These measures help customers stay in control and minimize gambling losses. All online sites partner with retail gambling venues and adhere to each regulation the West Virginia Lottery Commission outlines.
What is the Tax Rate for Online Gambling in WV?
West Virginia online gamblers must report winnings to the IRS and the West Virginia Tax Division. The Form W-2 G (Certain Gambling Winnings) is the primary federal form to fill out and report any taxable gambling winnings. Meanwhile, the IT-140 West Virginia Personal Income Tax Return is for reporting in-state.
WV's personal finance income tax rate ranges from 3% for incomes under $9,999 to 6.5% for incomes over $60,000. Winnings are subject to a 24% federal tax rate. This brings the total taxation up to 27% - 30.5% for residents. Recently, the HB 2526 bill was implemented to reduce the state's income tax and withholding rates, potentially lowering the federal adjusted gross income for many winners.
What is the Regular Withholding Rate?
In West Virginia, operators must collect 6.5% and withhold it if users fail to provide a TIN and verify their identity. Regular withholding does not apply for bingo, Keno, and Slot Machine winnings. However, a backup rate applies to Bingo and Slot winnings from $1,200 - $5,000 and $1,500 - $5,000 for Keno. Lotteries and Raffles have a 6.5% West Virginia holding rate for winnings over $5,000. This level also applies to sports betting and other wagers. Poker is slightly different, and regular withholding doesn’t apply if players report winnings on Form W-2G—a backup rate of 6.5% kicks in for any poker wins over $5,000.
The regular federal withholding rate for real money gambling winnings is 24% and applies to winnings over $5,000 on sweepstakes, wagering pools, lotteries, sports betting, and other wagers 300x the bet value. It does not apply to bingo, slot machines, or keno wins under the $5,000 mark. Backup withholding is a burden and adds 24% for users who don’t provide a correct Taxpayer Identification Number and have won a minimum of $1,200 on bingo or slots, $1,500 on keno, or $5,000 on poker. When added to the WV backup rate, it totals 30.5%.
Federal Form W-2G, Certain Gambling Winnings
The form W-2G is a federal income document that businesses are required to issue to taxpayers. It includes the details of the Payer (operator) and fields for users to enter their reportable winnings, wager types, state tax, and dates to provide the most accurate finance information. They contain detailed information on customer activity, including transactions and wagers.
Residents must report with a W-2G form if they win more than a specific amount from gambling. The rates vary for each type of activity, and we’ve listed them and the minimum taxable amount.
- Lottery: $5,000
- Pari-Mutuel: $600 or 300x the stake
- Sports Betting: $600 or 300x the stake
- WV Online Slots: $1,200
- Bingo: $1,200
- Keno: $1,500
- Online poker: $5,000
How to Report Taxes on WV Gambling Winnings
We've prepared a list of steps to help you comply with West Virginia gambling legality and taxes. The main thing to remember is to keep accurate records for your West Virginia tax return and calculate your federal adjusted gross income easily.
Keep detailed records of your wins and losses. The gambling operator should provide you with a W2-G detailing your overall gambling activity. It makes it easy to summarize winnings and losses and calculate them for tax purposes.
Download the 1040 and 1040 Schedule 1 forms from the IRS site to report your US Individual Income Tax Return and Additional Income for the required tax years.
If gambling winnings are withheld, you can add this amount to Other Income on the Schedule 1 and W2-G forms.
The W2-G form shows the total tax withheld. Add this figure in the Federal Income Tax Withheld area on Form 1040.
After deducting your losses, amend all forms with the total gambling winnings. To itemize deductions, you can download Form 1040 Schedule A to ensure a federal adjusted gross income.
All gambling winnings are reportable to the West Virginia Tax Division on a state level. Download and complete the IT-140 West Virginia Personal Income Tax Return to report local income tax.
Submit both West Virginia and federal personal income returns online or via the mail on time to avoid penalties.
Can I Deduct My Gambling Losses in WV?
Yes, West Virginia residents can deduct gambling losses from their taxable income. However, the maximum deductions can't exceed the overall winnings. It's important to note that only gambling losses at legal and locally licensed sites are covered.
So, if you wager at offshore casinos or sportsbooks and lose, you can’t legally itemize and deduct these gambling losses from your provision. A new regulation, HB 2821, passed in 2023, allows decreasing modifications for gambling deductions. Locals can go back to the tax years 2020 – 2022 and apply these losses.
Go to the IRS website to download the Form 1040 – Schedule A.
Calculate your deductions by viewing your W2-G form and subtracting the gambling losses from the total wins.
Add this figure to the ‘Itemized Deductions’ field on the form.
Ensure you include the deductions on federal and state personal income tax returns for accurate reporting and determining the amount of taxable income.
What If I Don't Receive a Form W2-G?
Suppose you grabbed that West Virginia online casino bonus and won big, it's considered taxable income, and you must receive a W2-G form to file your taxes.. If someone fails to receive one, then there are several options available. The first would be to contact the support team and request one from the business to determine overall gambling losses. Another option is to contact the IRS for a copy because the business would have sent this to the agency to comply with their tax obligations.
What Happens if I Don't Report Gambling Winnings?
Failing to report gambling losses and real money winnings can cause future Internal Revenue Service (IRS) issues. All licensed operators must file documents stating customer activity, the amount won, and any tax provision. So, the IRS has this information on all taxpayers, and it’s only a matter of time before they follow up.
Filing a late taxable income return can incur a 5% monthly interest fee, capped at 25% of the taxable income. So, to save from paying up to ¼ extra, it’s best to stay on top with detailed records, calculate your federal adjusted gross income, and file returns in time.
WV Lottery Winnings & Taxes
The lottery operates differently in West Virginia, and currently, under the West Virginia code, it withholds federal and local taxes for prizes over $5,000. The federal taxation rate is 24%, and the state rate is 6.5%, totaling 30.5% of the prize value.
The good news is that state customers who win under this amount can enjoy winnings without reporting it in their West Virginia tax return. Suppose a West Virginia customer wins over $5,000. In that case, the withholding rates apply, and the WV Lottery will issue a W-2G form to the IRS and the user. State income taxes apply to lotto wins; the rates start at 3% for under $10,000 up to 6.5% for $60,000+.
Taxes on Multistate Lotteries
Playing multistate lotteries is a favorite with many West Virginia residents and a great way to win big prizes online. Lotto wins over $5,000 have regular federal withholding of 24% and 6.5% for WV. This brings the total to 30.5% of the prize value in Multistate lotteries.
The great news is that West Virginia has many large state lottery draws and prizes, so there’s already plenty of action within the state. However, the same tax rates apply whether you are playing the local lotto or a lottery draws from an interstate provider, and users must factor in the 3-6.5% personal tax rates.
Sports Betting Winnings and Taxes
Sports betting is increasing in West Virginia, and local bettors must pay taxes on winnings over $600 or if they win more than 300x their wager. The Lottery Commission regulates the state’s sportsbooks, and each must file W2 G forms to inform the IRS of customer activity.
These sites offer a fantastic lineup of sports, live betting, and value-packed promotions using a West Virginia code. Regarding taxable income, the rate for sports bettors is the same as other gambling, with a 24% federal rate and 3-6.5% West Virginia tax applicable to winnings.
