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Taxes on Gambling Winnings Full Guide and Analysis

There aren't many people who wonder, "are gambling winnings taxable?". At least not until someone hits a juicy jackpot. Well, the great news is that if you live in certain European countries, you pay absolutely no taxes on gambling winnings. Other jurisdictions may be stricter when it comes to their tax oncasino winnings. That's why it's worth checking with your local tax authority, as not all countries have the same regulations. So, scroll down to learn what the tax rate is on gambling winnings depending on the country you live in.

Europe vs. Other Countries and Territories

Many novice players might ask themselves why there are so many European casinos without tax on the winnings. By levying taxes on the casino companies, casinos in a large proportion of Europe can offer tax-free winnings to their customers. It encourages people to spend their money in the casino, safe in the knowledge that if they have a big win, it's all theirs. This works well for the casino as they have a reason to entice customers. It's also good for the government to collect taxes on gambling but from the casino themselves and not the customer placing the bet.

However, not every single European country allows tax-free casino winnings. So, it's always important to check the country's tax rate on gambling winnings before placing any bets. That way, you can ensure that you receive 100% of your winnings. For example, if you were to be based in the Netherlands, you would pay taxes on casino winnings. This is likely due to the higher tax rates casinos are charged than in other European countries. However, there's no tax on gambling winnings in the UK, for instance. Across the globe, other countries also impose gambling winnings tax on the players. The list includes the USA and the high profile and, currently, only legal place to gamble in China, Macau.

Some countrieswith nogambling taxon winnings:

  • Denmark
  • Germany
  • Italy
  • Malta
  • Finland
  • Austria
  • Belgium
  • Canada
  • Australia
  • Singapore

Some countries where players pay taxes on gambling winnings:

  • Sweden - Only if profits are made at a non-licensed operator, but only if the site is actively targeting the Swedish market or based outside the EEA. In such cases, any winnings over 100 SEK are taxable as capital income, i.e., generally at 30%. This means that gambling winnings at online casinos targeting Swedish players, casinos outside the EEA, foreign physical casinos (Las Vegas, for example), and even participation in pyramid schemes are considered capital income.
  • Netherlands - 30.1% only on winnings of over €449 at a Dutch-based game of chance. You must file a tax report for winnings at foreign gambling operators too. This may change on 1 October 2021 as the law will be amended then.
  • Poland - Tax of 25% deducted from poker winnings. A tax of 10% is deducted from winnings from number games, betting, lotteries, and raffles if larger than 2,280 zlotys (nearly €500). Slot, dice, card games, bingo, and roulette winnings aren't taxable.
  • The Czech Republic - Winnings on lottery over 1 million koruna (about €39,000) are taxed at 15% income tax. Other gambling winnings are taxed annually if they exceed 1 million koruna.
  • Slovenia - Operators withhold 15% on prizes over €300.
  • USA - federal 24% + possible state income tax on gambling winnings.

Could My Casino Winnings Become Taxable in the Future in Europe?

Laws and regulations around the taxes on casino winnings being paid by the winner could change in the future. However, we can see that this tax-free gambling-for-customers model works well in most European countries. Taxing the casinos that don't pass this on to their customers encourages a more buoyant gambling market that inevitably suits all parties involved.

In countries where the gambling tax rates are high and the ability to get licenses are pretty limited, the gambling market tends to be smaller. It results in less money moving through the casinos and, in turn, onto the government in the form of casino winnings tax.

Taxes on Gambling Winnings Rundown

US Gambling Tax Rate

America has always had a bit more complex laws and rules about everything, casino winnings tax rate included. Firstly, it's important to note that you'll require casino winnings tax Form 1040 or Form 1040-SR. Moreover, everyone should focus on gambling taxes by state, as each state has individual regulations for gambling in general. In most states, online gambling is illegal. Some states have land-based gambling only, and some offer everything. However, the federal tax on gambling winnings in the country is 24% on the winnings. There's also the option of deducting gambling losses.

Some states that apply income tax on gambling winnings include Indiana (3.23%), Arizona (4.54%), North Dakota (2.90%), and Pennsylvania (3.07%).

How Much Money Can You Win Gambling Without Paying Taxes?

Just like everything related to gambling winning tax rules, this depends on your jurisdiction. American gamblers have clear limits on this one. Generally, they can make up to $1,200 on slot machines and bingo or up to $600 on horse tracks. Expect to pay taxes on poker tournament winnings if the amount hits at least $5,000.

In Canada, professional gamblers whose primary income source is from gambling and betting must file all winnings. There are no exclusions for this. Yet, casual players don't report any winnings. Swedish players don't pay or report anything on winnings in Swedish-licensed casinos. Yet, they need to file taxes on profits made on non-Swedish gambling sites.

Do Professional Gamblers Pay Taxes on Gambling Winnings?

If you were wondering are gambling winnings considered earned income, the answer is yes. But only if you're a professional gambler. If you're thinking about going pro or wondering what qualifies as a professional gambler, this would typically be if your primary income is predominantly from gambling.

If you're based in a country where there's no tax on betting winnings, you get to benefit from it even as a professional. And yes, all your winnings and earnings are presented to you tax-free. Meaning, there are no taxes on slot machines winnings. There are no taxes on poker tournaments winnings or on any other games, and no taxes on any casino or betting profits will affect you. However, you won't be claiming gambling losses deductibles either.

So, no, it doesn't matter if you win €5 or €5,000,000. If you're in a country where the customer isn't taxed on their casino winnings, you get that same benefit. If you're wondering how this works, then it is pretty simple. The taxman isn't missing out because the company you are gambling with will be paying them an amount of tax depending on the country's specific percentage rate.

Countries That Tax Professional Gamblers

Some jurisdictions impose professional gambling taxes, so beware. For example, the US has such regulations that apply taxes on poker winnings and casino winnings. Another example is New Zealand, where professional gamblers pay taxes on their winnings if they have little to no other income. However, this rule primarily affects poker players, while others don't bother with gambling winning tax rates. Canadians who make money through gambling and betting are considered freelancers. So, they too, must pay taxes on winnings but may qualify for gambling deductions, as well.

Conclusion

In conclusion, gambling winnings in most of Europe can be taken tax-free. This is great news for those of you wanting to spend your hard-earned money in casinos. However, you must check with your local tax authority to ensure the country in which you live does not charge any tax to the punter on their win. After all, when it comes to gambling taxes in Europe, each country will have its own policy. If you're traveling abroad, always be mindful to check the rules not just around taxes on gambling winnings but also on gambling itself. There are countries around the world where it is entirely illegal to gamble. It's essential to ensure you keep yourself and your money safe, as well as keep up to date on the latest tax rules.

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Steven Ford
Steven FordUpdated: 11 Nov 2022
Steve started his iGaming career back in 2007 and he has not looked back since. Various job roles for both global and startup casino brands have given him a deep and thorough under...
Q: 

Do casinos withhold taxes on winnings?

A: It depends on where the casino operates from and what country you live in. In the US, for example, casino winnings are taxable, and casinos withhold taxes on them. In most European countries, consumers don't need to bother with taxes on gambling as operators pay a levy on their earnings.
Q: 

Are gambling losses deductible?

A: In the United States, players can deduct gambling losses. However, that's only possible if they itemize deductions and record both winnings and losses. In the UK, neither gambling winnings nor losses are taxable. The situation is similar in many European countries where there's no tax on gambling winnings.
Q: 

Do casinos report your winnings to the IRS?

A: Yes, casinos report winnings to the IRS. However, there is a threshold that triggers such reporting, and it depends on the type of gambling and betting winnings. For instance, winnings over $1,200 on slot machines and bingo are reported to the IRS, just like winning at least $5,000 in poker tournaments.
Q: 

What happens if I don't report my gambling winnings?

A: This depends on your country of residence and its laws regarding taxes on gambling winnings and penalties for not reporting casino winnings. In the US, first, you may receive a warning from the IRS. If you fail to report again, you can be summoned to court or get a fine.
Q: 

Do you have to pay taxes on gambling winnings?

A: If the country you live in finds gambling winnings taxable, the answer is yes. Note that in most cases, gambling winnings entail everything from online slots and table games to sports betting, lotteries, and more. For instance, US residents must report any income from gambling and betting winnings on their yearly tax report.
Q: 

How to not pay taxes on gambling winnings?

A: The only way not to pay taxes on your casino winnings is if your country doesn't deem them taxable. Usually, gambling winnings aren't taxed in European countries like the UK, Germany, or Australia. If that isn't the case and your country taxes gambling winnings, there's no getting out of it. After all, that would be tax evasion. We never advise you to try and avoid paying taxes because that can result in much more trouble for you down the road.

Q: 

Do I have to pay state taxes on gambling winnings?

A: If you're gambling online in the US, you'll need to pay a 24% federal tax on your gambling winnings plus a possible state tax. So, yes, you need to pay state taxes on your casino winnings if your state requires it. Some of these include New Jersey, Maine, Minnesota, and Arizona.
Q: 

Are poker winnings taxable?

A: Yes, players could be required to pay tax on poker winnings. Once again, the way your gambling winnings get taxed depends on the place you live in. For instance, the tax on poker winnings in the USA is 24% and a possible state income tax. Alternatively, there's no tax on poker winnings in the UK. In some cases, it also depends whetehr you are a professional poker player and that’s your main revenue source.
Q: 

Are casino winnings taxable in Singapore?

A: If you're a passionate iGaming enthusiast living in Singapore, we've got some good news for you. The country doesn't require residents to pay taxes on their online casino winnings. So, you're free to enjoy the entirety of your earned money.
Q: 

Do you pay tax on gambling winnings in Ireland?

A: Players from Ireland will be happy to hear that the country doesn't tax winnings from online gambling. All winnings from betting, online gambling, lotteries, and other sweepstakes are exempt from CGT.

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