What it is:
Gambling income is any money that is earned from games of chance.
How it works (Example):
For example, someone plays a state lottery and wins $1 million. This is gambling income and is taxable. Similarly, someone who wins $1000 at a casino’s roulette table is required to pay tax.
Why it Matters:
Gambling income is considered by tax authorities to be no different from any other taxable income and must be reported and assessed.