2026 World Cup Betting: New IRS Tax Rules for Winnings

red soccer ball emerging through a set of neon rings coming out of a phone — (Image credit: Getty Images)

The FIFA World Cup is just months away, and while fans are busy studying brackets, savvy bettors are already eyeing a different kind of scoreboard: their income tax liability.

For the first time in World Cup history, a new federal "loss cap" on wins means that even a break-even tournament could leave you with a significant bill from the IRS.

And with a record $150 billion expected to be wagered on the 2026 World Cup — much of it by first-time bettors — betting lines could shift rapidly. So seasoned bettors might have to work harder to find the value needed to outpace the IRS’s new 2026 "phantom income" tax.

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We're breaking down the latest World Cup odds, where the "newbie" influx changes the betting landscape, and how exactly the 90% deduction limit affects you.

2026 World Cup betting odds and favorites to win

This year, the new 48-team format (up from 32) results in more matches over more days. FIFA World Cup betting odds are already underway, and according to online sportsbooks like DraftKings and FanDuel, here are the top five 2026 World Cup winner odds as of early April:

Swipe to scroll horizontally

Top Teams in World Cup 2026
Country	2026 World Cup Betting Odds
Spain	+440 to +450
England	+500 to +600
France	+600 to +800
Brazil	+750 to +850
Argentina	+750 to +850

New to the board? A +400 means a $100 bet nets $400 in profit (plus your original $100 back). And a plus (+) sign means the event has less than 50% chance of occurring, so the bookie pays you more to take the risk. However, at the start of the World Cup, no team has more than 50% likelihood of taking home the prize, so all placed bets will be "underdogs."

Beyond just picking a tournament winner, you can wager on almost every outcome imaginable. Popular "prop" bets include individual honors like the Golden Ball (Best Player), the Golden Boot (Top Goalscorer), and the Golden Glove (Best Goalkeeper).

You can even get granular with player statistics, like Kylian Mbappé recording an assist or a defender drawing a yellow card.

How first-time bettors shift World Cup betting lines

The 2026 FIFA World Cup is projected to be the largest online betting event in history, with 29% of U.S. bettors gambling for the first time, according to a survey commissioned by global payment platform Paysafe. About 60% of global fans plan to wager online (where betting is legal).

What does more newbies mean for seasoned bettors?

Lower betting odds on popular favorites. New bettors often heavily rely on favored teams or popular players, which can make the odds more attractive for underdogs in a match.
Faster line movements. Due to expected volume (more bettors overall), odds are likely to move quickly before, during, and after games. Experienced bettors may have a smaller window to secure favorable lines as they shift.
High liquidity for in-play betting. The predicted influx of new bettors could allow for larger wagers without significantly affecting the odds.
Increased risk of platform slowdowns. High volumes of bettors could lead to slow online sports bet performances, including app downtime, which could impact time-sensitive bets.

Note: Sapio Research conducted Paysafe's survey for 3,850 respondents across several countries, including six U.S. states. All respondents were of legal gambling age.

Gambling winnings tax on World Cup betting

No matter how much you win from online sports bets, your winnings are taxed federally. Though 2026 brings new IRS rules on how much you can win before the paper trail starts.

Sportsbooks generally won't issue you a Form W-2G reporting your winnings unless:

Your sports bet wager wins $2,000 or more (up from the previous cap of $600), AND
The payout is at least 300 times your original wager.
Otherwise, you won't receive a Form W-2G for your online sports bet.

While the federal threshold is $2,000, states like Connecticut or Ohio often trigger reporting at just $600. Meanwhile, if you're betting in "income tax-free" states like Florida, Tennessee, or Texas, you'll likely dodge the state gambling taxes. And in some states, like California and Alabama, online gambling is illegal. So check your local rules before placing a bet.

IRS gambling losses tax deduction for 2026

If you spend the World Cup placing wagers and come up empty-handed, you might assume those losses simply cancel out your wins. In the past, you'd be right. Yet starting in 2026, the IRS has changed the math.

Under the 2025 Trump tax bill, gambling loss deductions are now capped at 90% of your winnings. Previously, you could deduct 100% of your losses (up to the amount you won) to break even. Now, as of 2026, the IRS takes a cut off your losses before you can claim them.

Let's say you have a rollercoaster World Cup: you win $3,000 on the group stages but lose $4,000 on the finals.

Winnings: $3,000
Deductible losses: $2,700 (90% of your $3,000 win)
Taxable income: $300

Even though you're down $1,000 in cash, the IRS sees $300 in "phantom income." This amount is taxed at ordinary rates (10% to 37%), meaning you're paying the government for the privilege of losing money.

Here's the real kicker: Roughly 90% of taxpayers claim the standard deduction. If that's you, you can't deduct gambling losses at all. To use the 90% gambling loss offset, you have to itemize your deductions on Schedule A. If you don't itemize, you'll owe taxes on the full $3,000 of winnings, even if you lost, say, $4,000 (or more) elsewhere.

Bottom line: World Cup bets

Whether you're new to online sports betting or an expert wager, this year's FIFA World Cup promises to be a year unlike any other. However, tax-wise, that may soon change.

As Kiplinger reported, lawmakers are eyeing a new gambling tax rule that could reverse the "phantom income" tax. But until then, document every wager, track every "session," and keep your receipts. In 2026, the best offense is often a well-documented defense.

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Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.