Foreigner Gambler Law in the US

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Gamler Forigen in Las Vegas

When foreigners gamble in the US, they might wonder how they can bring back home their winnings. In this article, we’re going to describe some peculiarities of the U.S. gambling laws that apply to those foreigners who gamble in the U.S. and have significant winnings.

General Outlines

Even if you’re not a U.S. citizen, you should still pay taxes on your winnings. Winnings include both cash and non-cash prizes like package holidays, cars and houses. You can obtain such bonuses from casino games, bingo, raffles, sweepstakes, keno, poker tournaments, races and slots machines. Such winnings need to be reported to the IRS (Internal Revenue Service) even if you have not received any IRS form handed out by the casino.

The casinos must issue an empty form W2-G if the amount of your winnings is more than $600 for horse races, $1,200 in a jackpot from a slot machine or bingo, $1,500 in Keno or $5,000 in poker. Table games winnings usually do not trigger the W2-G form.

Nationals of some countries are exempt from taxation by the U.S: the UK, Russian Federation, Austria, Sweden, Denmark, Finland, France, Ukraine, Germany, Tunisia, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Slovakia, Slovenia, South Africa, Czech Republic, Spain, and Turkey. This treaty is made to prevent double taxation. Nationals from the rest of the countries are subject to 30% tax withholding from gambling activities.

Non-Cash Prizes

All casinos are required to apply taxation on some non-cash winnings, such as cars and holidays. You need to report the fair market value of the prize, with the help of a 1099-misc form that you have to fill in. Before handing out any prize, casinos are required to withhold taxes for any foreigners who do not have a valid Social Security Card; so, you may end up having to pay 30% of the prize value to the casino. It is possible to return these taxes by filling in the Form 1040NR.

Gambling Non-Cash Prizes

How to Avoid Withholdings

There is a possibility you may avoid tax withholding at the beginning. Before you gamble at US casinos, you can obtain a taxpayer identification number, fill the form W8-BEN and provide the following information: your name and address, ITIN, date of birth, Tax Treaty benefit explanation. In order to get ITIN or US taxpayer identification number, you need to fill in Form W-7 and send it to the IRS or visit the ITIN acceptance agent that is available in some casinos.

Returning the Taxes

If your taxes were withheld from your winnings you can fill the form to get them back. You need to follow these simple steps.

  • Get a US taxpayer identification number (ITIN). To do that you need to fill in form W-7 with the IRS
  • Collect the tax forms from the casinos
  • File form 1040NR, a US tax return for non-residents
  • Report the gambling winnings and all the taxes withheld from them on the tax form
  • Attach form 8833 to avoid the taxation of the winnings

This could help you to return your taxes within a 3-year limit from the IRS. Also, mind that some states withhold their own taxes, as well as the cities and counties. These taxes differ from federal taxes and are not recoverable. You need to consult this before gambling. Nevada, for instance, does not have a state tax, so while gambling in Las Vegas you are sure to be exempt from state taxation.

Top Questions People Ask About Gambling in the US

  • Is casino legal in the USA?

We can say that gambling is generally legal under U.S. federal law, but there are some restrictions as to online gambling and gambling between states. Each state is free to establish its own rules, Louisiana and Nevada being the only two states where gambling in casino form is legal throughout the entire state.

  • Do foreigners pay taxes on gambling winnings?

Yes, foreigners must pay taxes on gambling winnings as part of any income earned in the US. The state taxes are not refundable; although the federal taxes can be refunded upon leaving the country, via the IRS.

  • When was gambling banned in the US?

The gambling was banned in the US several times; while in the 20th century, it was banned in 1910 throughout the States. In 1931, Nevada relegalized the casino business again.

  • Are online casinos legal in the US?

There is no law against playing online on the federal level; it is legal to place bets online as long as the bets are not placed on a website located in the United States. Though in some states online gambling is legal, it’s better not to risk it!

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