How to figure taxes for crypto used at online casinos
Last update: February 18, 2026
The preferred way to deposit into online casinos and to withdraw winnings is with cryptocurrency like Bitcoin. This adds another layer of hassle for tax reporting. Here's how that works.
The IRS treats virtual currency as property. (source) So, you report crypto gains and losses on Form 8949, which flows to Schedule D, same as you would for stocks or other investments. Note, your crypto gains and losses are not the same as your gambling wins and losses. I cover gambling wins and losses here, and all that is the same whether you win/lose dollars or crypto.
Let's work through a deposit example:
- You buy $1000 of Ethereum at Bitstamp, receiving 0.25 ETH (the currency abbreviation for Ethereum).
- You deposit the 0.25 ETH into an online casino and receive $1001.28 credit for it. This counts as a “sale” of your ETH.
So you bought some property for $1000, and sold it for $1001.28, so you have a gain of $1.28 to report on Form 8949, and will owe taxes on it.
If you received only $998.86, then you’d still report in Form 8949, but as a loss.
What if you received exactly $1000 for your crypto? I've been unable to find out whether you have to report a sale that has no gain or loss, but it certainly couldn't hurt. (If you have a credible source [link] that answers that question, then please let me know.)
Now let's walk through a withdrawal example:
- Your balance when you withdraw is $900.
- You request a withdrawal and the casino sends you 0.225 ETH.
This is not a taxable event. It's not taxable until you sell your ETH, or swap it for another crypto (which counts as a sale). At whatever point you sell/swap your ETH, you record the sale as being “purchased” for $900, and sold for whatever you get for it.
Related articles
- How to report gambling winnings and losses
- Itemizing vs. taking the Standard Deduction
- How to keep the session log the IRS wants
- What causes you to get a W-2G
- Why gambling taxes are unfair
- Sources