Updated: 26.12.2024, 9:56
5 min read
Net Winnings are the total winnings minus a wager. For instance, if you place a bet of $10 and win $10, your net winnings are $20 – $10 (your initial bet) = $10.
The term “net winnings” refers to the real profit a player makes from a stake. You can calculate your net winnings by subtracting your initial wager from your total (gross) winnings.
For example, let’s say you bet $30 during a hand of poker to compete for a total pot of $120. If you were to win, your total / gross winnings would equal $120 (i.e., the pot), while your net winnings would equal $90 (the pot minus your initial bet of $30).
When gambling, you will either win or lose money every time you make a wager. Calculating your net winnings vs total payout will make it easier for you to keep better track of your overall gains and losses. This is especially important if you intend to become a professional or semi-professional gambler.
Therefore, make sure to use our Net Wins calculator to ensure you get the right amount of prize money.
GAMBLING WINNINGS
Your gambling net winnings are the amount of money you take home with you–i.e., the amount you receive from the type of game or bet you take part in. Every platform will have its own rules about the way in which you can cash in your winnings.
Likewise, the time you have to wait to have your winnings transferred into your bank account differs between online platforms. Some platforms also offer sped-up transfers for an additional fee.
Certain online websites allow you to withdraw your entire balance from your betting account, while others will have a limit on how much can be withdrawn during any day. Some platforms will also charge you a transaction fee for the amount. This fee can be either fixed or a percentage of the entire amount.
This means that to determine how much pure profit you made, you must subtract the platform’s service fees from your net winnings. As this affects your expected net winnings, it is always important to familiarize yourself with the rules of an online gambling platform before you start using it.
Knowledge is power. Always remember to check the terms and conditions of the venues you plan to use, whether it’s an online platform or a physical casino.
Let’s take the venue PrizePicks, for example. What are net winnings on PrizePicks? This is the actual profit you make after accounting for fees or taxes associated with your gameplay.
It’s important to note that the IRS requires a 1099-MISC form to be issued for members who accumulate $600 or more in net winnings during the calendar year. This amount is taxed as “Other Income,” regardless of whether the funds were withdrawn or remain in your account. PrizePicks automatically uploads your 1099-MISC form to your account’s Tax Information section if you meet this threshold, typically by February of the following year.
Understanding how to calculate net winnings on PrizePicks is crucial for financial planning and tax compliance.
GAMBLING WINNINGS AND TAXATION
As with most things in life, gambling winnings are subject to taxation. In most countries, a special gambling tax covers your gambling winnings (often termed “gambling income”), which is why the amount you win must be disclosed to your country’s internal revenue service. Failure to pay tax on your gambling winnings may result in fines or, in some cases, even prison time.
Let’s take the United States as an example. In the US, the total amount of gambling income you receive, be it your casino net winnings or your sports betting winnings, must be clearly declared on the tax returns you submit to the federal government.
The total amount of money obtained through all gambling activities–such as online casinos, slot machines, lotteries, sweepstakes, etc.–is subject to a single tax of 24%. Failure to declare this income and pay this tax is considered a serious crime as it essentially constitutes tax evasion.
At this point, you might be asking:
If I am required to pay tax on my gambling winnings, does that also mean that I can write off my gambling losses as deductions?
The answer depends on your country’s taxation system. Those living in the US, for example, can do so, as gambling income is counted as any other income.
Americans can include the amount they’ve lost through gambling when filing their tax returns by placing it under deductions. The amount you can deduct is limited by the total amount of winnings you’ve declared on the form, but your losses and winnings have to be declared separately.
GAMBLING LOSSES
You win some, and you lose some. Losing is as integral a part of gambling as winning, and even though we all know this, losses can still be demoralizing.
To help their clients recover from losses, certain venues–especially online venues–will sometimes offer you certain promotions designed to help you get back on track after losing a bet or two. Before choosing a new venue, make sure you know whether it offers such bonuses and promotions.
Your casino net win is susceptible to the terms and conditions set by the online platform or physical casino location. Most problems people encounter when collecting their winnings are related to players not taking the time to educate themselves about the rules of the platforms they gamble on.
Professional gamblers who do this for a living know all of this information by heart. They know which sites offer player-friendly conditions and which ones are best to avoid. They also have a firm grasp of all the taxation rules of their country.
CONCLUSIONS
Simply put, net winnings are calculated by deducting your initial wager from your total (gross) winnings.
If you make a request to withdraw money from an online gambling platform, your net winnings will be credited to your bank account. When withdrawing, you are subject to the commissions and limitations of the online platform, so it’s best to research this information before you start gambling.
Alternatively, you can use your net winnings to keep playing and win even more money. Most professional gamblers will not withdraw below a certain amount to make sure they always have enough to wager with.
