If you have played on Sportzino’s social casino or social sportsbook sites, then you may have considered what happens when you get to the point of redeeming prizes, and whether Sportzino taxes need to be taken into account.
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It is a complex question, and you’re right to wonder - because taxation is a complex matter and you need to know what you’re doing. Even if you don’t know whether or not you’re supposed to pay taxes, that is no defense if you file incorrectly. So below, we will help you with all you need to know about Sportzino taxes.
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Do you have to pay tax on Sportzino prizes?
In short, yes. In the vast majority of cases you will have to pay tax on prizes redeemed through SC winnings even though Sportzino is a sweepstakes casino rather than a real-money site. The IRS considers redeemed SC winnings to be taxable income, and federal tax rules include sweepstakes alongside lotteries and similar sources of prizes. When filing your tax return, sweepstakes casino or sportsbook redemptions are treated as cash prizes for tax purposes, not as gambling winnings. And this distinction matters, because the type of income determines how it is reported and whether you qualify for certain deductions.
It is your responsibility to track and report your winnings when you file your taxes. The IRS requires all US taxpayers to report sweepstakes prizes, as with any other winnings, as Other Income on Form 1040. For a more complete understanding of how Sportzino works under sweepstakes law, it’s worth having a look at our
verified Sportzino guide.
Sportzino taxes pros and cons
Pros and cons
- Easy reporting classification
- Good in no-income-tax states
- No automatic withholding
- Full responsibility for reporting
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Will Sportzino taxes be withheld at the time of redemption?
While it would be more convenient if tax was taken at the point of Sportzino redemption, this is not Sportzino’s responsibility, and it would in fact be in breach of tax law if they did. No, when you want to redeem your Sweeps Coins for real money prizes, the full amount is credited to you and paid into whichever account you have specified. And while regulated casinos may withhold taxes to act as an intermediary for tax purposes, sweepstakes casinos do not. You will not have the tax automatically deducted, and like anyone of
age to play at Sportzino, you will need to handle it yourself.
Does that mean I have to calculate Sportzino taxes myself?
Yes and no. The overall calculation will be done by the tax authorities, but you will need to include records of your redemptions when filing your annual tax return - and also itemize them with as much supporting documentation as you can lay your hands on. If you have requested upwards of $600 in prize redemptions across a year, Sportzino may issue you with a copy of Form 1099-MISC. If they haven’t, and your redemptions total more than $600, it’s a good idea to request that form yourself, because it will be needed for your complete return.
For overall information on redeeming Sweeps Coins, it’s worth consulting our
Sportzino withdrawal
guide elsewhere on this site.
How are Sportzino taxes calculated?
Money that you obtain from redeeming your Sweeps Coins on Sportzino for real prizes is taxable as ordinary income at the federal level - so when you come to file your taxes annually it will be included along with any other income you have made during the year that wasn’t taxed at source. It will usually also be subject to state taxation, depending on the state. The rate you pay, and the amount that will be taken in tax, is not easy to calculate hypothetically. To put it simply, your total taxable income will be decided by your tax return. The marginal bracket that you fall into will decide the rate that you pay.
Overall, your smartest play is to check the website at your local Department of Revenue before you file, and checking to see what their requirements are. Different states have different approaches to taxation, but the one thing they all have in common is that they will want you to report any income from any source.
How are social sites like Sportzino treated differently from real-money betting?
The major difference, from a taxation point of view, lies in the classification of providers. Real-money gambling operators fall under specific laws written for regulated gaming, and winnings there tend to be treated specifically as gambling income. This may trigger automatic reporting, potential federal withholding, and the ability to write off losses, should you include them as a line item in your return.
Social casinos and sportsbooks like Sportzino, however, operate under different laws that affect promotional contests. Winnings are treated as miscellaneous income, operators do not withhold taxes, and “losses” cannot be offset against winnings - largely because they don’t exist. You are buying Gold Coins when you make a purchase at a social casino, and you receive those Gold Coins. Thus there is no loss, for taxation purposes. Gold Coins and Sweeps Coins are virtual currencies and not treated as taxable income and are therefore not subject to write-off as losses.
| Aspect of taxation |
Sportzino |
Real Money Gambling |
| Tax Classification |
Miscellaneous income |
Gambling income |
| Withholding by Operator? |
❌None |
✅Possible 24% Federal withholding |
| Reporting form |
1099-MISC if above $600 |
W-2G |
| Deducting losses |
❌No |
✅Possible, if itemized |
| State treatment |
Varies, depending on state |
Usually the same as federal |
| Oversight |
Sweepstakes law |
State gambling regulations |
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How should I prepare to report Sportzino taxes?
The most important thing when it comes to reporting your income for taxation is that you are able to justify everything you do and don’t report. When it comes to Sportzino taxes, you should be reporting everything that you redeem in the form of cash transfers or gift cards. And you should be preparing for this reporting from the moment you make any redemption from Sportzino.
The site itself keeps track of all your transactions - and it is worth keeping a screenshot of the relevant page, which can be found by clicking the right sidebar and selecting “Transaction History”. You should also, separately, record every redemption you make in either a spreadsheet or a book that you can refer to when filing your return. Being able to show the authorities when you have redeemed prizes, where, and to which accounts, will help you report correctly and transparently.
Even if your overall redemptions for the year have not amounted to a lot of money - if they have been below the $600 threshold for Form 1099-MISC, for example - you still need to keep record of them and mention them in your return. If you do not, and your taxes are audited, then you will have to not only pay any taxes that would have been due on those proceeds, but also likely some penalty charges that can dwarf the original amount you would have paid. And, to reiterate, saying that you were unaware of the need to declare those amounts is not considered a defense under the law.
The same is true at any other sweepstakes casino or social sportsbook. Indeed, if you have made redemptions at other
top social sportsbooks, they should be declared at the same time and on the same form as those from Sportzino - though, for easy reference, it is sensible to label each transaction with the platform that it was made through.
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Conclusion: Staying compliant without surprises
While sweepstakes casinos and sportsbooks avoid many of the complexities of gambling regulations, there are still tax obligations that apply - and it is on you to be on top of those. Prizes redeemed from SC winnings are classified as miscellaneous income at federal level, and state rules can differ considerably from state to state. And Sportzino taxes are not calculated by the operator, so you need to keep your own - accurate and extensive - records. Understanding the distinctions between how social and real-money sites operate, and between state and federal law - helps you to stay compliant and avoid an unwelcome bill or audit down the line.
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Sportzino taxes FAQ
💰 Do you have to pay taxes on Sportzino winnings?
Technically, you have to pay taxes on Sportzino redemptions. While your balance at Sportzino is in the form of GC and SC, it is purely virtual and does not need to be reported. Once your SC balance is redeemed for real money, however, it immediately becomes taxable as miscellaneous income.
📄 Does Sportzino withhold taxes at redemption?
No. It is not their responsibility and that isn’t how the law works. You are liable to report any income from Sportzino to the relevant authorities, though Sportzino may send you form 1099-MISC if you have exceeded $600 in redemptions with them.
🏛️ How do state taxes affect Sportzino redemptions?
It very much depends on the state. Some states tax sweepstakes winnings like other federal income, others don’t tax them at all. It is wise to check your local rules and potentially seek advice from a tax expert. Not least of all because regulations can change in short order.
