Do DraftKings and FanDuel report DFS winnings to the IRS?

Yes. Both operators issue a 1099-MISC (formerly 1099-K in some cases) when your net annual winnings exceed $600. That form is also sent to the IRS. You are legally required to report DFS winnings on your tax return regardless of whether you receive a 1099 — the $600 threshold is the reporting threshold for the operator, not the taxable threshold for you.

Can you deduct DFS losses?

Only if you itemize deductions on your tax return, and only up to the amount of your winnings. If you won $2,000 and lost $8,000 net, you can deduct $2,000 of losses (matching winnings) — the remaining $6,000 loss is not deductible. If you take the standard deduction, you cannot deduct DFS losses at all. This is why the standard deduction change dramatically affected recreational DFS players' tax situations after 2017.

What's the difference between recreational and professional DFS tax treatment?

Recreational players report DFS winnings as 'other income' (hobby income) on Schedule 1 and deduct losses (if itemizing) on Schedule A. Professional players — meaning DFS is your primary income and you approach it with businesslike intent and continuity — report on Schedule C, can deduct all expenses (subscriptions, home office, equipment), but owe self-employment tax (~15% on top of income tax) on net profits.

What records should you keep for DFS taxes?

Contest-level records — the same log you'd keep for tracking your own DFS performance. Include date, contest name, operator, buy-in, entries, and winnings per contest. This documentation supports your reported winnings + losses if the IRS ever asks. Both DK and FD provide downloadable annual contest history CSVs; save them.

Do you owe taxes on DFS winnings in states where DFS is legal?

Federal taxes yes, always. State taxes vary — most states with DFS legalization also apply state income tax to DFS winnings at their normal rate. A handful of states (Florida, Texas, Washington among no-income-tax states) don't tax DFS winnings because they don't tax any income. Check your specific state's rules or consult a tax professional if unsure.

DFS Tax Reporting: What DraftKings and FanDuel Actually Report to the IRS

By DFS Degen TeamPublished August 20, 20268 min read

DFS tax reporting is not intuitive. Winning $600+ in a year triggers a 1099-MISC that's reported to the IRS whether you noticed or not. Losses are only deductible if you itemize AND only up to the amount of winnings. Professional DFS players face self-employment tax on top of income tax. This piece walks through what DK and FD actually report, how the recreational vs professional distinction works, and the concrete examples of what winning and losing years look like on a return.

Disclaimer: this article summarizes publicly available tax information as of the publication date. It is not tax advice. Every DFS player's tax situation depends on personal circumstances (income level, filing status, state, itemization eligibility) — consult a qualified tax professional for advice specific to your return.

What operators actually report

Federal tax reporting from DFS operators works via IRS Form 1099-MISC. DraftKings and FanDuel both issue a 1099-MISC when your NET winnings for the year exceed $600. "Net winnings" means total payouts minus buy-ins for that year — not gross winnings from any single contest.

Two important consequences:

The 1099 is issued only when NET winnings cross $600. If you win $10,000 and lose $9,500 (net $500), no 1099 is issued — but you still owe tax on the $500 in winnings.
The 1099 goes to the IRS. Not receiving one from the operator doesn't mean the IRS doesn't know about your account — operators report accounts they THINK cross the threshold, and the IRS can request account records at their discretion.

Losses under the 1099 threshold still don't excuse you from reporting. The tax obligation kicks in at $1 of net winnings, not $600. The threshold is when the operator sends the paperwork, not when your tax duty starts.

Recreational player tax treatment

Most DFS players are recreational — they play as a hobby, not a primary income source. Recreational tax treatment:

Report ALL winnings as "other income" on Schedule 1, line 8. Not just the amount on your 1099 — all of it.
Deduct losses (up to winnings) on Schedule A as an itemized deduction under "gambling losses."
Losses in excess of winnings are NOT deductible.
Losses only help you if you itemize. With the standard deduction at ~$14k single / $29k married in 2026, most recreational DFS players don't itemize — which means they can't deduct any DFS losses.

Concrete example. Recreational player, married filing jointly, standard deduction. Wins $3,000 in DFS, loses $4,500. Net loss: $1,500. Tax outcome:

Report $3,000 winnings as other income.
Cannot deduct any losses (didn't itemize).
Pays income tax on the full $3,000 in winnings despite netting a loss.

This is the counter-intuitive outcome that surprises recreational players every year. The IRS taxes gross winnings; loss deduction requires itemization; most players don't itemize.

Professional player tax treatment

A player who treats DFS as a business — regular continuity, businesslike approach, primary or substantial income — reports on Schedule C as self-employment. Different rules apply:

Winnings and losses reported on Schedule C as business income and expenses.
Losses in excess of winnings CAN offset other income (up to some limitations).
Business expenses are deductible — subscription services (projection sites, simulator subscription), home office, computing equipment, professional development.
Self-employment tax (~15.3%) applies on net profits in addition to income tax.
Quarterly estimated tax payments are typically required to avoid IRS penalties for under-withholding.

The IRS bar for "professional" is not just income size — it's behavioral. Do you keep detailed records? Do you have a business plan? Do you rely on DFS for a significant share of income? Do you approach it with continuity and businesslike intent? A single big-winning year doesn't automatically make you a pro; a modest- income but full-time DFS focus can.

Concrete year-end examples

Recreational player, $2k winning year

Won $2,000 net (received 1099-MISC).
Report $2k as other income; possibly deduct equivalent losses if itemizing.
Tax owed: 22% federal (assumed bracket) × $2k = $440 in extra federal tax. State tax additional.

Recreational player, $10k losing year

Lost $10,000 net. No 1099-MISC issued.
No tax owed on DFS — but no deduction available if taking standard deduction.
If itemizing (unusual): can deduct up to $0 (no winnings to offset).

Professional player, $60k net year

Won $60,000 net. Reports on Schedule C.
Deducts $8,000 in expenses (subscriptions, equipment, home office): net $52k.
Federal income tax: ~$8k at effective rate.
Self-employment tax: 15.3% × $52k = ~$8k.
Total tax: ~$16k on $52k net income — ~30% effective rate.

State tax variation

States tax DFS winnings differently:

No state income tax: FL, TX, WA, NV, SD, WY, TN, AK, NH (limited). DFS winnings owe only federal tax.
Standard income tax states: NY, NJ, MA, CA, IL, etc. DFS winnings taxed at state income tax rate on top of federal.
DFS-specific rules: A handful of states have specific DFS provisions (state-level withholding requirements, separate reporting). Check state-specific rules.

Record-keeping best practices

Download annual contest history CSVs from every operator you use, every January for the prior year.
Aggregate: total buy-ins, total winnings, net profit/loss per operator per year.
Save the CSVs in a tax folder. If the IRS ever audits, you need contest-level detail.
If claiming professional status, document your approach — track hours spent, subscriptions paid, equipment purchased.
Consult a tax professional if annual DFS winnings exceed ~$10,000 or you're considering professional status.

DFS ROI math — pre-tax ROI is where DFS decisions happen; tax is the after-work overhead
DFS bankroll management — tax withholding planning is part of professional- scale bankroll management
DFS state legality — tax and legality are separate but often correlated state-level rules
DFS for beginners — includes the getting-started tax awareness most beginners miss