Do You Have To Pay Tax On Gambling Winnings In Australia

• Do You Have To Pay Tax On Gambling Winnings In Australia Today
• Do You Have To Pay Tax On Gambling Winnings In Australia Dollars
• Do You Have To Pay Tax On Gambling Winnings In Australia Money
• Do You Have To Pay Tax On Gambling Winnings In Australia 2019

Posted in Guides July 25, 2020

In Australia, all the gambling winnings such as lottery winnings, casino gambling, and sports betting is not subjected to any taxes. When gambling takes place for business purposes, the winnings are taxable when you own betting or a gamble. Also, if you are a professional gambler, the winnings will be charged with taxes. So, you can make tax deductions of gambling losses. But to do that you have to declare all your wins as taxable income too and have receipts. If you aren't claiming losses then the ato don't need to know shit.

It's easy to get carried away once you hear the winning music and see the flashing bright lights upon hitting the jackpot on a slot machine. The usual thought process of a soon-to-be millionaire does not involve potential taxes and fees that the win carries. However, there are many factors to take into consideration when winning big on slot machines – the main one being taxed.

If you're a regular slot machine player, you must have wondered about taxes imposed on your winnings. Luckily, we are here to explain in detail how taxes can impact your winnings. Please scroll down to learn all about it.

Taxes in the UK

United Kingdom residents can consider themselves lucky, as there are no tax payments for casino winnings. The same rule goes for all casino games, from poker to baccarat, including slot machines. Regardless of the sum they win, players won't have to report winnings and pay taxes – no matter if it's £50 or £500,000.

Since residents of England, Wales, Northern Ireland, and Scotland do not succumb to any taxes regarding casino winnings, they can walk out with their casino winnings with a spring in their step.

The same rule applies to both land-based and online casinos in the United Kingdom.

However, casino operators and gambling institutions in the UK need to pay a fixed rate of 15% on their profits.

Taxes in the USA

Unfortunately, United States players do not have the same luck as their British counterparts. The problem of taxing has always been present in the USA, and many players have expressed their disagreement when it comes to taxing winnings higher than $1,200. Because of this, all large sums are paid via checks, and winning players need to present their ID if they want to make a withdrawal. Once their name is in the system, the IRS (Internal Revenue Service) requires winning players to report their winnings.

Both a casino and a winning player need to report any winnings higher than $1,200 made on games of chance, such as poker, keno, bingo, lottery, blackjack, and so on.

When it comes to slot machine winnings, there are no exceptions. If you won cash money or prizes (such as a car or a vacation), you are obligated to contact the IRS. A winning player will need to file the winnings under ‘other income' by filling out the 1040 form.

The same goes for online slot winnings. All income made in land-based or online casinos on games of chance is taxable if you're a citizen of the United States. If you win $1,200 or higher, you need to report your winnings to the IRS by filling out the W-2G form.

Be sure to check the taxation laws in your state. American states have the right to make their own laws so they might differ depending on the state you are in.

What Are the Tax Rates?

Once you hit the jackpot on slot machines, the casino will present you with a W-2G form where you will need to fill out some necessary information about yourself, such as your name, address, and social security number.

If you provide your social security number, the IRS will use the 25% rate on your winnings. However, if you fail to provide a social security number, the IRS can take 28% of your total winnings.

The W-2G form needs to contain the total amount of your winnings from slots as well.

If you like to indulge in other casino games, you should know that the W-2G form is also used for winnings made by playing keno, bingo, poker tournaments, and horse track races.

Difference Between State and Local Taxes

Unfortunately, players will need to report their winnings separately to both state and local authorities. This means that, if you travel to another state and win money on slot machines there, you will need to pay local taxes. However, you won't be paying the taxes twice, as your home state is obligated to give you a tax return for the amount you paid to the other state.

Keep in mind that Connecticut, Massachusetts, and Ohio are not subject to this rule.

Can I Deduct My Slot Losses?

Some good news for American players is that they can deduct their slot losses, but with specific regulations. One of the first rules concerning deductible losses says that a deductible amount depends on the number of your winnings. In other terms, if you win $500 on a bet and lose $1,000 on other bets, you will be compensated with $500 since that was the amount of your previous win. Moreover, if your losing streak continues for a year, you won't be able to deduct any losses.

The next thing we want to mention is that you cannot deduct your losses without proper documentation. Keep all documentation regarding your wins and losses, including tickets, checks, slips, and so on.

All documentation needs to include the won or lost amount, date and time, gambling activity, casino address and name, and a list of people that were with you that day. It might sound like a lot of work, but it can significantly help you tighten the hole in your budget.

Taxes in Canada

Although a neighbour of the US, Canada does not have similar rules when it comes to slot machines taxation. Similar to the UK, if you're a citizen of Canada, you are not required to pay taxes on your winnings, as they do not count as your regular source of income.

On the other hand, if you are a professional gambler whose primary job is playing games of chance, you will need to report your winnings.

So, if you like to play a game of poker or spin the reels on a slot machine, you won't have to worry about taxes in Canada. You can walk away from a brick-and-mortar casino with cash in your hands after your big win!

Taxes in Australia

If you're a citizen of Australia and new to casino games, you won't need to worry about paying taxes – simply, concentrate on your gambling skills! Australian players do not need to pay taxes for their slot machine winnings, as the Australian law does not consider gambling to be anything more than a hobby.

Gambling is not considered a profession in Australia. Therefore, the government does not tax those winnings, as they are considered the secondary source of income. With that in mind, the government taxes casino operators and lottery organisers, as providing gambling activities is considered their profession.

Even professional gamblers do not succumb to taxation in Australia, as the government considers casino winnings to be ‘a result of good luck'.

However, you should check taxation laws in your state, as they differ from state to state.

Taxes in New Zealand

Unlike its neighbour, New Zealand has stricter taxation rules. Any winnings made from slot machines or other casino games are considered a taxable income if the player's other incomes are low. This regulation applies to professional players.

Recreation New Zealand casino players are typically not succumbed to taxation. There have been cases of taxation if the winnings were significant, but the New Zealand government does not make it a policy to tax recreational winnings made in land-based casinos. Thus, residents of New Zealand that like to indulge in popular slot games or table games are not obligated to report their winnings.

On the other hand, casinos and other gambling institutions are obligated to pay taxes to the government of New Zealand.

Taxes in Other European Countries

It would prove challenging to list the taxation regulations of every European country, but we would like to give additional information to our European readers.

Players from the Netherlands are required to report any winnings made from slot games or other casino games and pay 29% on winnings higher than €454. Moreover, if you play online slot games on offshore sites, you will need to fill in a gaming tax return and report it to the government.

We need to mention Sweden, as it is one of the biggest gambling markets in the world. Similar rules apply to player's winnings as it is the case in the neighbouring Netherlands. Players are required to report their winnings made in a licensed brick-and-mortar or online casino and pay 18% of their total profit.

However, these percentages are not that high compared to other European countries where the rates can go as high as 35%, like in Greece.

Final Thoughts

Hopefully, this article has proven to be helpful in your search for the best countries to play slots. Keep in mind that these numbers and regulations might change, as some countries are prone to changing their laws regularly, like Canada. Before deciding to try out your luck on slots, take some time to think about the numbers and whether you're ready to pay some hefty taxation rates. Ultimately, we hope you'll push your luck and win big!

We wish you success and remember to gamble responsibly.

All countries and governments have their own online gambling tax policies and legislation so we need to look at this question from a global perspective. Firstly we'll cover the situation in the UK and following that look at how things may differ in the rest of the world.

Do you have to pay tax on your gambling winnings?

UK Gambling Taxes

Key Points

• All winnings either online or offline are tax free!
• Any betting tax abolished in 2001 by Gordon Brown.
• Tax used to be on bookies but they passed to punters.
• Bookmakers must now pay 15% POI tax but not punters.
• POI tax on any games of chance increased from 15% to 21% but again not for punters.

In the UK any and all winnings from gambling – either online or at betting shops – are entirely tax free and do not need to be declared as part of any tax return.

This has been the case since the then Chancellor of the Exchequer Gordon Brown's budget of 2001, when he abolished Betting Duty which had stood at 6.75%. That duty was removed in an attempt to persuade bookmakers not to move their operations overseas and therefore take jobs and revenue away from the UK economy.

All of that is not to say that there is no tax involved when it comes to gambling in the UK, however, and there is a ‘point of consumption' tax related to the activity. This does not affect punters themselves, though, and will be dealt with separately further down this page.

Will the situation ever change? Generally speaking there is little chance that this situation will be reversed, either, as the UK tax system is simply not built in such a way that taxing gambling winnings would be viable. This is the case as it is fairly standard within the system that if tax is levied on the income or profit made through an activity, then there must also be an allowance made against losses through the same activity.

With gambling being an activity where overall more losses are made by punters than winnings, therefore, such a change in the tax legislation would cost the UK government revenue. As a result, it is quite simply not something which would be considered. Your betting, casino, slot machine, poker and bingo winnings are yours to keep tax free.

What About Professional Gamblers?

It may seem logical that the tax situation would be different for professional gamblers than it is for occasional punters. When it comes to pure winnings from betting, however, that quite simply is not the case. As we have discussed above these winnings are not taxable and this remains true even for a ‘professional gambler'. That is because HMRC do not recognise professional gambling as a taxable trade.

In fact, within their most up to date ‘Business Income Manual', HMRC clearly define their position on professional gambling:

‘The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.' BIM22017

Difference Between State and Local Taxes

Unfortunately, players will need to report their winnings separately to both state and local authorities. This means that, if you travel to another state and win money on slot machines there, you will need to pay local taxes. However, you won't be paying the taxes twice, as your home state is obligated to give you a tax return for the amount you paid to the other state.

Keep in mind that Connecticut, Massachusetts, and Ohio are not subject to this rule.

Can I Deduct My Slot Losses?

Some good news for American players is that they can deduct their slot losses, but with specific regulations. One of the first rules concerning deductible losses says that a deductible amount depends on the number of your winnings. In other terms, if you win $500 on a bet and lose $1,000 on other bets, you will be compensated with $500 since that was the amount of your previous win. Moreover, if your losing streak continues for a year, you won't be able to deduct any losses.

The next thing we want to mention is that you cannot deduct your losses without proper documentation. Keep all documentation regarding your wins and losses, including tickets, checks, slips, and so on.

All documentation needs to include the won or lost amount, date and time, gambling activity, casino address and name, and a list of people that were with you that day. It might sound like a lot of work, but it can significantly help you tighten the hole in your budget.

Taxes in Canada

Although a neighbour of the US, Canada does not have similar rules when it comes to slot machines taxation. Similar to the UK, if you're a citizen of Canada, you are not required to pay taxes on your winnings, as they do not count as your regular source of income.

On the other hand, if you are a professional gambler whose primary job is playing games of chance, you will need to report your winnings.

So, if you like to play a game of poker or spin the reels on a slot machine, you won't have to worry about taxes in Canada. You can walk away from a brick-and-mortar casino with cash in your hands after your big win!

Taxes in Australia

If you're a citizen of Australia and new to casino games, you won't need to worry about paying taxes – simply, concentrate on your gambling skills! Australian players do not need to pay taxes for their slot machine winnings, as the Australian law does not consider gambling to be anything more than a hobby.

Gambling is not considered a profession in Australia. Therefore, the government does not tax those winnings, as they are considered the secondary source of income. With that in mind, the government taxes casino operators and lottery organisers, as providing gambling activities is considered their profession.

Even professional gamblers do not succumb to taxation in Australia, as the government considers casino winnings to be ‘a result of good luck'.

However, you should check taxation laws in your state, as they differ from state to state.

Taxes in New Zealand

Unlike its neighbour, New Zealand has stricter taxation rules. Any winnings made from slot machines or other casino games are considered a taxable income if the player's other incomes are low. This regulation applies to professional players.

Recreation New Zealand casino players are typically not succumbed to taxation. There have been cases of taxation if the winnings were significant, but the New Zealand government does not make it a policy to tax recreational winnings made in land-based casinos. Thus, residents of New Zealand that like to indulge in popular slot games or table games are not obligated to report their winnings.

On the other hand, casinos and other gambling institutions are obligated to pay taxes to the government of New Zealand.

Taxes in Other European Countries

It would prove challenging to list the taxation regulations of every European country, but we would like to give additional information to our European readers.

Players from the Netherlands are required to report any winnings made from slot games or other casino games and pay 29% on winnings higher than €454. Moreover, if you play online slot games on offshore sites, you will need to fill in a gaming tax return and report it to the government.

We need to mention Sweden, as it is one of the biggest gambling markets in the world. Similar rules apply to player's winnings as it is the case in the neighbouring Netherlands. Players are required to report their winnings made in a licensed brick-and-mortar or online casino and pay 18% of their total profit.

However, these percentages are not that high compared to other European countries where the rates can go as high as 35%, like in Greece.

Final Thoughts

Hopefully, this article has proven to be helpful in your search for the best countries to play slots. Keep in mind that these numbers and regulations might change, as some countries are prone to changing their laws regularly, like Canada. Before deciding to try out your luck on slots, take some time to think about the numbers and whether you're ready to pay some hefty taxation rates. Ultimately, we hope you'll push your luck and win big!

We wish you success and remember to gamble responsibly.

All countries and governments have their own online gambling tax policies and legislation so we need to look at this question from a global perspective. Firstly we'll cover the situation in the UK and following that look at how things may differ in the rest of the world.

Do you have to pay tax on your gambling winnings?

UK Gambling Taxes

Key Points

• All winnings either online or offline are tax free!
• Any betting tax abolished in 2001 by Gordon Brown.
• Tax used to be on bookies but they passed to punters.
• Bookmakers must now pay 15% POI tax but not punters.
• POI tax on any games of chance increased from 15% to 21% but again not for punters.

In the UK any and all winnings from gambling – either online or at betting shops – are entirely tax free and do not need to be declared as part of any tax return.

This has been the case since the then Chancellor of the Exchequer Gordon Brown's budget of 2001, when he abolished Betting Duty which had stood at 6.75%. That duty was removed in an attempt to persuade bookmakers not to move their operations overseas and therefore take jobs and revenue away from the UK economy.

All of that is not to say that there is no tax involved when it comes to gambling in the UK, however, and there is a ‘point of consumption' tax related to the activity. This does not affect punters themselves, though, and will be dealt with separately further down this page.

Will the situation ever change? Generally speaking there is little chance that this situation will be reversed, either, as the UK tax system is simply not built in such a way that taxing gambling winnings would be viable. This is the case as it is fairly standard within the system that if tax is levied on the income or profit made through an activity, then there must also be an allowance made against losses through the same activity.

With gambling being an activity where overall more losses are made by punters than winnings, therefore, such a change in the tax legislation would cost the UK government revenue. As a result, it is quite simply not something which would be considered. Your betting, casino, slot machine, poker and bingo winnings are yours to keep tax free.

What About Professional Gamblers?

It may seem logical that the tax situation would be different for professional gamblers than it is for occasional punters. When it comes to pure winnings from betting, however, that quite simply is not the case. As we have discussed above these winnings are not taxable and this remains true even for a ‘professional gambler'. That is because HMRC do not recognise professional gambling as a taxable trade.

In fact, within their most up to date ‘Business Income Manual', HMRC clearly define their position on professional gambling:

‘The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.' BIM22017

Gambling winnings, therefore, remain free of tax regardless of whether they make up an individual's main source of income. Where the situation can get a little more complicated, however, is in the case of income related to gambling but not actually direct winnings from gambling. Appearance fees paid to poker players for playing at certain tournaments, for instance, represent payment for a service provided to the tournament organisers and as such may be taxable.

Away from the UK, too, tax laws and legislation do differ and it would benefit a professional gambler outside of the UK to research the specific rules and regulations within their own country.

UK Point of Consumption Tax

Do You Have To Pay Tax On Gambling Winnings In Australia Today

As we mentioned earlier, Betting Duty for gamblers was abolished in 2001 and was at that time replaced by a 15% tax on gross profits for bookmakers and gambling providers. That tax was initially charged on a ‘point of supply' basis, meaning that if the bookmaker or company were not based in the UK, then they were not liable. This situation has more recently changed, however.

Do You Have To Pay Tax On Gambling Winnings In Australia Dollars

From the latter part of 2014, the tax on bookmakers' profits was changed to a ‘point of consumption' tax by a combination of the Gambling (Licensing and Advertising) Act 2014 and by the introduction of ‘Remote Gaming Duty'. This means that regardless of where they themselves are based, providers must pay a 15% duty on any bets placed by UK customers.

In the 2018 budget chancellor George Osborne announced that the point of consumption tax would rise from 15% up to 21% for all games of chance but sports betting would remain at 15%, for now.

Gambling Taxes In The Rest Of The World

Do You Have To Pay Tax On Gambling Winnings In Australia Money

Do You Have To Pay Tax On Gambling Winnings In Australia 2019

As the above table shows, where various types of gambling are legal there are a variety of different attitudes towards taxation on winnings from those forms of betting. If your country is not listed then it's likely gambling is not strictly legal and there is therefore no taxation laws.