Matched betting and taxes in the US

Yes, matched betting profits are taxable in the US, and the way they are counted can surprise you. According to the IRS, gambling winnings — sports betting included — are fully taxable and must be reported, while gambling losses are deductible only if you itemize deductions, and only up to your winnings. A matched pair is two separate bets: one wins, one loses. So a pair that made you $70 can put more than $70 of winnings on your return, with the offsetting loss usable only if you itemize. This page is general information from IRS.gov, not tax advice; consult a tax professional about your own situation.

What the IRS says, in brief

IRS Topic 419 (Gambling income and losses) states that gambling income includes sports betting and that all gambling winnings must be reported, whether or not you receive a form. Losses are claimed as an itemized deduction on Schedule A and cannot exceed the gambling income you report. To deduct losses the IRS requires an accurate diary or similar record of winnings and losses, backed by receipts, statements or other records. Publication 525 covers gambling winnings as income; Publication 529 covers the loss deduction and the record it expects: the date and type of each wager, where it was placed, and amounts won and lost.

The change starting in tax year 2026

Public Law 119-21 (the One Big Beautiful Bill Act, signed July 4, 2025) amended the wagering-loss rule in section 165(d) of the Internal Revenue Code. For taxable years beginning after December 31, 2025, the deduction equals 90 percent of wagering losses, and is still allowed only up to wagering gains. That is the statute itself; the IRS has separately proposed regulations reflecting it (REG-113229-25, Internal Revenue Bulletin 2026-19). For someone whose losses nearly equal their winnings — which describes matched betting — that means some tax on money they never actually made. Bills to restore the full deduction have been introduced in Congress, so check the rule in force for the year you file.

What about bonus bets?

When a bonus bet wins, the winnings are paid as cash and look like any other gambling winnings. When a bonus bet loses, you did not pay for it, so it is not obvious that there is any loss to deduct. The IRS pages linked here do not address promotional credits specifically, so do not assume either way — ask a professional, and keep records that show which bets were funded by promotions.

Form W-2G, and why you probably won't get one

A W-2G is the form a payer issues for certain gambling winnings. For sports bets, the IRS's 2026 W-2G instructions say it is filed when winnings are at least 300 times the wager and meet a dollar threshold, which is $2,000 for payments made in 2026 and will be adjusted for inflation after that (it was $600 before). Matched bets are placed at modest odds, so they almost never reach 300 times the stake. The same 300-times test gates federal withholding: 24% is withheld only when winnings minus the wager exceed $5,000, so matched bets almost never have tax withheld either. Not receiving a form does not change anything: all winnings are reportable. Many books offer a win/loss statement in the account area, which is useful but is not a substitute for your own records.

Doing it with TrueEdge

The Bet Tracker records each bet with its book, odds, stake and result, and bets placed from the Promo Optimizer carry whether they were funded by a bonus bet, site credit or cash. That gives you the record the IRS asks for; it does not calculate your tax. Bet Tracker walkthrough.