When you receive your gambling winnings, the casino or other gambling establishment will typically issue you a Form W-2G, which reports the amount of your winnings and the taxes that were withheld. In any case, you will report your winnings using the SCHEDULE 1 (Form 1040): Depending on where you live, you may also be required to pay state and local taxes on your gambling winnings. This means that any money you win from gambling must be reported on your tax return and is subject to federal income tax. According to the Internal Revenue Service (IRS), gambling winnings are considered taxable income.