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In many countries across the globe, players pay a tax on their winnings, while casinos pay taxes on their Gross Gaming Revenue. Every nation has its unique way of collecting GGR, although it is generally considered a percentage of the casino’s net earnings. Our guide will give you a detailed insight into how taxes work in different countries worldwide and help you understand all the values. So stick around and enrich your gambling knowledge!
Gambling Taxes Differences Around the World
Different nations have various tax policies in place for casinos and other forms of gambling. They depend on where you live and where you play your favourite casino games. While gambling is forbidden in some countries, there are others where it’s legal and casinos and players must know the rules and regulations.
Sometimes casinos pay taxes on profits, and other times, the players do, also the percentages differ.
While some taxes are pretty high, others are extremely low (super convenient for players). Naturally, players and casinos constantly seek out the lowest taxes available to minimise their expenses and have a better profit. Let’s see how gambling taxes look for different countries around the world.
United Kingdom
Our first stop is the UK, which must comply with the strictest regulators in the industry– the United Kingdom Gambling Commission. The Gambling Act, which was first introduced in 1960, made gambling activities legal in the UK. In 2005 the act was amended to include regional and online casinos.
This country has a tiered tax system where casinos pay a set percentage based on their revenue. The percentages grow proportionately to 20%, 30%, 40%, and 50% from a starting rate of 15% on amounts up to £2,370,500.
While players in other countries, such as the US and France, must pay gambling taxes ranging from 1% to 25%, bettors in the UK keep all their winnings.
Both online and offline bettors in the United Kingdom don’t have to worry about taxes at all. Only online casinos and bookmakers pay taxes to contribute to the country’s economy and improve it. There are a variety of different taxes and gambling duties that you should know about:
- General betting duty
- Bingo duty
- Machine games duty
- Lottery duty
- Gaming duty
- Remote betting duty.
Some online casinos shift these costs onto players, offering high wagering bonuses or subpar odds. However, if you play at the best online casinos UK, you might get an outstanding deal and decent wagering requirements. So, this means that you can keep an exceptional amount of money!
Germany
Since gambling is completely legal in Germany, there are many different offline and online gaming choices available to its residents. There are a ton of casinos, poker rooms, and bookies in the country, and huge budgets are set aside for marketing and developing new gaming technologies nationwide.
Due to all of these factors, gambling is very popular in Germany. The tax system is severe in the sector, so players typically receive rates that are far lower than the market price. German authorities care deeply about its players and economy, thus they propose the world’s highest gaming tax.
In Germany, Gross Gaming Revenue (GGR) taxes can go up to 90% for some casino operators, yet the high GGR rate guarantees that they reduce casino revenues to a relatively narrow margin.
The consumers, who must pay taxes on a portion of their wins, are somehow responsible for all of this additional liability. Most online gambling sites in Germany have a unique procedure where the wager slips and will show you the gross winnings. To determine the net winnings – subtract at least 5% from the total amount of each wager.
The United States Of America (USA)
State and local governments collected a total of $10.2 billion in tax from commercial casinos in 2019 with GGR breaking records and reaching $43.6 billion. The US economy undoubtedly benefited from this substantial investment.
Each state chooses its own taxes in the USA but all winnings are subject to them. The IRS will consider any money you earn from gambling or wagering as taxable income.
In most cases, the competent authorities will ask for a flat 24% on your earnings. Gambling winnings over $5,000, however, will be subject to income tax withholding for the sources indicated below:
- Lottery, wagering pool, or sweepstakes, including rewards from poker tournament winners.
- Any additional bet (if the proceeds are equal to or greater than 300 times the bet amount).
Online casinos are responsible for withholding the federal tax amount of 24%, which they will pay to the IRS on your behalf.
Top online Casino operators also have to pay at least 15% tax on revenue designed for causes such as public education, infrastructure improvement, state parks, and responsible gambling associations.
New Zealand
New Zealand has a different approach when it comes to gambling taxes. If before October 1, 2021, you had to pay a percentage of 30.1% for your gambling winnings, in 2022, it’s now much more manageable at 29%.
It’s different every year, sometimes the tax can be higher than you expect or lower, giving you a great advantage.
However, there are gambling sites that pay the taxes on your behalf, so you won’t have to worry about them. For instance, you may play any casino game you like, win an exceptional amount and keep it for yourself.
If you win the amount online or in-store, no matter how high your earnings are, you don’t have to pay a tax to the state. So if you want to play casino games in New Zealand and keep the winnings to yourself, make sure you play on the right platform. Also, remember that the key to a successful gambling experience is not necessarily the highest amount of money is the accomplishment of playing responsibly!
Poland
In Poland, the minister in charge of public finances receives the primary duties related to gaming, such as providing casino licenses or betting permits. The National Revenue Administration oversees promotional lotteries, registering slot machines, and other tax and customs duties like enforcement measures.
Both online and offline gambling games, except promotional lotteries, are subject to a gambling tax. Different tax rates apply to various games, ranging from 2.5% (for wagering on animal sports tournaments) to 50%. (for most casino games and slot machines).
Although the tax base changes from game to game, it is determined by the game’s turnover. Polish internet betting enterprises can’t compete with offshore corporations due to current tax (12% of revenue).
Polish players are exempt from all taxes. There’s one exception regarding winnings from poker tournaments, which includes a 25% tax deduction from the tournament organiser’s winnings.
While earnings from slot machines, card games, dice, roulette, and bingo are exempt from tax, winnings from cash lotteries, telebingo, betting, promotional lotteries, and raffle lotteries are subject to participants’ income tax of 10% if they exceed 2,280 zlotys.
Canada
Gambling has been around for a very long time in Canada, more specifically since the 1400s. Any serious gambler in the region will agree that this country is a gambling paradise. Besides being an impressive country, the gambling legislation gives provinces the freedom to make independent decisions on legalisation and liberalisation.
Thanks to this freedom, gambling became legal everywhere, except Quebec, which won’t allow offshore casinos to perform on their territory.
In 1892, all forms of gambling were prohibited but nowadays, the market prospers better than ever since there are more than 100 land-based casinos throughout the country and countless international gambling websites.
The best part is yet to come. Canadian players don’t have to pay any taxes on their gambling winnings. The only ones who have to pay a tax are professional players who make a living out of gambling. Professional poker players, blackjack players, or any other professional gambler are operating their own freelance business, which is taxable in Canada.
If you want to play for real money in Canada, you can try the best Canadian online casinos and keep the winnings to yourself. There’s no better deal than this!
Australia
In Australia, people were gambling on horse racing back in the early 1800s. Over a century later, they already had access to poker machines that were legal from the beginning.
Over 80% of Australian adults like participating in regular gambling activities, placing Australia among the countries with the highest gambling ratings globally. Gambling is so embedded in Australian culture that 4% of Australians play pokies at least once a week.
You have a very nice advantage as a player at online casinos Australia since the gambling tax doesn’t apply to winnings.
If you’re wondering why Australians are not taxed for winnings, here are the three main reasons.
- Gambling is a hobby or recreational activity.
- The Australian government views winnings from gambling as a result of good fortune.
- Taxes are imposed on operators, while the player is protected. Gambling operators pay based on turnover, player losses, and net income.
The Netherlands
Gambling in the Netherlands has recently transitioned from a ban to a legal grey area. Nevertheless, there are legal ways to gamble without fear of breaking the law.
Here, the government controls all local gambling establishments. This gives Dutch people very few gambling options available. Yet, they can play at international casinos that provide a safe and secure environment.
Before playing at any casinos, make sure you know a thing or two about taxation. Currently, games of chance are subject to a 29% tax.
Gross gaming revenue (GGR), which includes slot machines and casino gambling, is the base for the gambling tax. Things look different for the other land-based licensed services since they regard the prize as the tax base. The gambling tax applies only if you win more than €449.
Romania
Romania is a small, stunning country in Europe that has been through a lot, including Communist rule and a turbulent history. Romania actually acted quickly to legalise gambling once the communist regime fell, realising the enormous economic potential.
This country currently has a thriving land-based and online gambling industry that is entirely legal. If things keep going in this direction, the gaming industry will grow significantly, making it a terrific area to live if you enjoy gambling.
Following the rules imposed by the Romanian government, both betting activities and the winnings resulting from them are 100% legal. Since gambling is taxable in this country, gamblers must always know details on the regulation regarding the taxation of winnings.
In the summer of 2022, the taxes on betting winnings increased. The Tax Code has suffered a few changes as a result of an ordinance that the government adopted. These changes include adjustments to the tax threshold for winnings from sports betting. Thus, on August 1, 2002, the gambling tax increased from 1% to 3%. To understand this a little more clearly, here’s how the government taxes betting winnings following the changes:
- The tax rate on winnings up to and including 10,000 RON is 3% of the amount withdrawn.
- If you win over 10,000 RON, you have to pay a tax of 300 lei and 20% of the amount exceeding the threshold. This tax regulation also applies to withdrawal amounts between RON 10,001 and RON 66,750. Simply put, if you want to withdraw 11,000 RON, you must pay a tax of 300 RON, plus 20% of 1000 RON, resulting in a tax of 500 RON, which they will allocate to the state budget.
- Income over 66,750 lei is subject to high taxes. If the amount withdrawn exceeds this limit, you must pay a tax of 11,650 RON in addition to 40% of the amount over the threshold of 66,751 lei. For instance, if you withdraw 90,000 RON, you will pay tax on 11,650 Ron, plus 9300 RON, resulting in a total tax of 29850 RON.
Even though all these sums sound confusing or complicated, it’s essential to highlight that the gambler doesn’t need to worry about taxation. All this responsibility of tax-paying and legal duties on the income resulting from betting belongs to betting agencies. So rest assured that you won’t have to deal with the Romanian bureaucracy.
Spain
Spain is a stunning European country, a true paradise with a vibrant culture well-known worldwide as a top travel destination. It is also famous that Spanish people love to have fun. Thus, their relaxed culture allows the gambling market to flourish despite facing a few bumps in the road.
In contrast to other European nations, this government never entirely outlawed gambling, yet there were periods of stillness. There’s still a contradiction between land-based operators and newly established gambling websites.
Although the government struggles to find a balance, the economy is thriving, and gamblers are content with the availability of vast selections of casino games provided by top developers in the industry.
With such a flourishing economy, gambling tax is an important factor that influences the outcome. There are two forms of gambling declarations on the current Spanish tax code, one for prizes and another for state lotteries. At the same time, there’s also a separate form for winnings provided by casino games and sports betting.
Currently, there is a 20% tax on lottery prizes over €2,500 in Spain, with an annual personal income exemption of €40,000.
In contrast, they use a four-tier structure for sports betting and casino games, with the base rate being 19% on winnings up to €12,450, a secondary tier of 24% between €12,450 and €20,200, the third tier of 30% on €20,200 to €35,200, and a final top tier charge of 37% on all additional winnings/prizes.
Brazil
With a total area of 3,265,080 square miles and a population of more than 214 million, Brazil is the biggest and most populated nation in Latin America. It is the fifth-largest country in the world concerning size and population.
There are 26 states, one federal district, and 5,570 municipalities constituting the Brazilian federation.
For over 70 years, Brazilian players didn’t have access to any form of gambling activity. There was a general ban on games of chance in 1941, yet they allowed lotteries under the state monopoly and horse-race wagering. Poker is also an exception because according to Brazilian law is more a game of skill rather than one of luck, thus is not illegal.
Given that this country struggles with economic turmoil, they realised that gambling regulation and taxation might help the government raise revenues.
Everyone who wagers and wins keeps 30% less of their winnings because of Article 732 of the RIR/2018, which mandates the levying of Personal Income Tax (IRPF) at a 30% rate.
Gamblers who win don’t have to pay the tax themselves. It is the operator’s responsibility to withhold the needed percentage. Thus, whenever a player wins in a national lottery, the operators will take 30% and send it to the IRPF.
To Sum Up
In some countries, gambling winnings are taxable income. But, there are several countries where you can keep any gambling winnings without worrying about paying any taxes. However, when it comes to taxes, it’s vital to be aware of the regulation in your country because the amount you may owe will depend considerably on your residency.