It’s hard to avoid the onslaught of ads for mobile sports betting, which goes live today, March 10, in Massachusetts. This is the second phase of newly legalized sports betting in the Commonwealth. Retail sports betting launched on January 31 at three casinos: Encore Boston Harbor in Everett, Plainridge Park Casino in Plainville, and MGM Springfield. Please note that you must be 21 or older to participate in sports betting.

Six online sports betting operators, including DraftKings and BetMGM, are luring new users with pre-launch bonuses. But before you jump to place your first bet online, or on an app, you need to know applicable tax consequences.

Like all winnings from gambling, winnings from sports betting are considered ordinary income for both federal and state taxes. Note that the obligation to report winnings falls on you, not on the sportsbook.

Be Sure to Track Your Wins and Losses, as well as Where You Incurred Them

Assuming you’re fortunate enough to make money on your bet, the additional good news is that you may be able to offset your winnings by your losses, for tax purposes. Federal tax law is simple. It allows gambling losses to be deducted from gambling winnings. Massachusetts law is different. It allows gambling losses to be deducted from gambling winnings, but only for winnings and losses incurred in Massachusetts casinos. This means that your winnings from online or app sports bets will likely need to be reported as income without the possible offset of any losses.

A wise bet: Record not only your wins and losses, but also where you incurred them. If you don’t, you won’t be able to properly report your gambling income on your federal and state tax returns. If you have questions, be sure to reach out to your tax or legal professional.

If you or someone you love is experiencing problems with gambling, call 1-800-327-5050 or click here to speak with a trained specialist at no cost, 24/7.

Image: Danny Lines