Gambling winnings tax in South Dakota

South Dakota has no state income tax, so it does not tax your gambling winnings as income.

Checked against South Dakota’s own sources on 2026-10-05.

How South Dakota treats gambling losses

South Dakota has no income tax, so there is no South Dakota return for your losses to change. They still matter on your federal return, and can matter on another state’s return if you won there.

The two examples below are the same numbers the calculator uses. With no South Dakota income tax, only the federal figure changes.

Two examples, worked at 2026 federal rates

A single filer with $60,000 of other income who takes the standard deduction on everything except gambling losses.

A losing year

You win $50,000 and lose $52,000, so you finish down $2,000.

Federal: $3,596
South Dakota: $0
Total: $3,596

You finished the year down and still owe tax.

Federally you itemize, so your losses offset your winnings, but the 2026 rule caps that deduction at 90 percent and leaves $3,200 taxable. South Dakota has no income tax, so none of this is taxed at the state level.

A winning year

You win $50,000 and lose $10,000, so you finish up $40,000.

Federal: $10,350
South Dakota: $0
Total: $10,350

Federally you take the $16,100 standard deduction, which is worth more than itemizing, so your gambling losses do not reduce your federal tax at all. South Dakota has no income tax, so none of this is taxed at the state level.

Withholding on winnings

South Dakota has no income tax, so no state income tax is withheld from your winnings. Any income tax withheld on a win here is federal.

If you do not live in South Dakota

South Dakota has no income tax, so it does not tax a visitor’s winnings as income either. If your home state taxes income, its own rules decide how it taxes the win, and there is no South Dakota income tax for it to credit.

More about South Dakota

If you owe a state agency

If you owe a debt to a state agency, the South Dakota Lottery takes it out of any prize of more than $100 and pays you the rest. You have 30 days to appeal.2

Claiming a lottery prize

You must claim a South Dakota Lottery lotto prize within 180 days of the drawing. A scratch ticket prize must be claimed within 180 days of the announced end of the game.4

The tax Deadwood casinos pay

Deadwood casinos pay a gaming tax of 8 percent of their adjusted gross proceeds. The casino pays it, not you.3

Sources

Every figure above traces to a primary source: a statute, an administrative code, a state agency page, or official form instructions.

1. South Dakota Department of Revenue, taxes for individuals (checked 2026-09-15)
2. SDCL 42-7A-52, debt setoff from a lottery prize (checked 2026-10-05)
3. SDCL 42-7B-28, gaming tax on Deadwood gaming (checked 2026-10-05)
4. South Dakota Lottery, claim your prize (checked 2026-10-05)

We could not confirm these from an official source: whether any city or county tax applies.