Since the appearance of online casinos, interactive gambling has gained a solid scale all over the world. You can get acquainted with one of the market participants at https://www.slotsup.com/online-casinos/slots-empire. Players spend funds and win small and large sums of money, and the turnover of money in the gambling industry reaches billions of dollars. This is confirmed by Grandview Research experts who predict a cash turnover of $127 billion by 2027 if the annual growth rate of 11.5% continues.
Such information could not remain without attention of tax authorities of different countries, fixing significant profits of virtual sites. At the same time, significant changes in the legislation directly affected the players themselves, who receive additional income from winnings at online casinos.
|
Country
|
The tax is paid by the casino, % |
The tax is paid by gambler, % |
|
USA |
– |
25 |
|
Austria |
35-80 |
– |
|
Australia |
Depending on the state: the amount of income or turnover |
– |
|
Belgium |
license fee |
– |
|
Bulgaria |
turnover tax |
– |
|
Canada |
local tax rates on general business rights |
– |
|
Czech Republic |
6-20 |
– |
|
Denmark |
45-47 |
– |
|
Finland |
8,25 |
– |
|
Germany |
5 of loss |
5 of loss |
|
United Kingdom |
21 |
– |
It is worth noting that tax charges on winnings and losses can be radically different, depending on the country and even the region. In some cases the deductions are paid only by the operators, in others – by both parties, in some others – they are deducted only from the player. In order to get a general global trend related to taxes on losses and winnings, we suggest looking at several individual countries and their peculiarities in the legislation related to iGaming. In the review, there are only those states where online casino activity is legalized.
USA
In the United States, gambling is legal, players have access to a variety of types of entertainment, including land-based casinos, lotteries, betting, virtual sites. Millions of gamblers participate in various events involving in-kind prizes and cash drawings. Every year the industry demonstrates positive dynamics, for example, only in the state of New Jersey the profit from gambling games will reach $1 billion in 2020, which is twice more than last year.
Features of the U.S. law require mandatory payment of taxes, not only on winnings, but also on losses. To do this, it is necessary to keep your own statistics to provide correct information in the tax return. Several forms are provided for this purpose:
- 1040 — is designed to enter the amount of winnings from $5 to $5,000, provides a special “Other Income” field»;
- IRS W-2G — has a broader purpose, with separate fields for winnings from $600, if the wager was 300 times less, and earnings over $5,000.
Different withholding rules apply for bingo, keno, poker and slots. Although the Internal Revenue Service does not keep track of small amounts, every conscientious citizen is required to file each amount on the return.
Europe
The European online gambling market takes up the majority of the world’s revenues, 53% to be exact. At the same rate, more legal establishments appear in Europe – from 45% in 2003 to 60% in 2018. And this direction continues to develop, as many states estimated the significant amounts coming into the budget from the gambling industry. How are things in individual European countries?
Austria
The legislation of the country provides for the payment of taxes on winnings from operators only. Players pay nothing, receiving their part of the remuneration. In this case, the loss is deducted from the income, that is, the paid winnings, and only the net profit is taxed. Thus, the established taxes reach 35-80% of the received sum.
Belgium
Here there is a similar situation where the entire tax burden falls on the operators, but not on the gamblers. Licensed casinos pay annual tax, and this applies to both land-based and online entertainment platforms.
Bulgaria
Online gambling remained in the shadows for a long time and only in 2013 all the laws and norms regulating the sites were adopted. As for taxes, the state stipulates fees for the license, location and direct games – roulette, card tables, etc. there are no taxes on winnings either online or fixed sites.
Czech Republic
The country has a rule that players are not charged tax on the money they win. But each registered provider must pay from 6 to 20% of all profits, depending on the sphere of activity. The law is the same for the entire gaming industry.
Denmark
It demonstrates a similar loyalty to the population, not charging any interest on winnings and losses. But the operator must pay the treasury 45-47% of gross revenue recorded for the previous fiscal year.
Germany
At different times, the country’s leadership has made its own amendments to the legalization of online gambling. While in 2000 it was a completely legal activity, for some reason in 2008, there was a law banning online entertainment. But due to the fact that the period came with the rapid growth of the popularity of games on the Internet, the government already revised the legislative initiatives two years later and the industry received the right to operate. In 2010, Germany opened its doors to bookmakers whose activities were legal in the European Union.
Since 2012, the system acquired certain values, and today looks as follows:
- 5% tax is paid by an online casino visitor on his winnings;
- The same amount is paid by the institution from the loss of customers.
The gambling business has not yet been fully regulated, however, there are regulations requiring payment of 5% of a player’s losses and winnings. The regulations apply to land-based formats, online entertainment is still not regulated and remains outside the law.
Great Britain
Only profits, not the amount of turnover, are subject to taxation. At the same time, in some cases there are no fees on users’ losses. These include betting on foreign sports and spreads.
All platforms that provide gambling services to the public must pay tax, regardless of whether they are local or registered in other countries. Foreign companies must necessarily obtain a license by passing a technical check on the compliance of slots. It is noteworthy that if the license is refused, the amount of the fee is not refundable. In addition, the company must pay another 25% of the amount.
Today, the amount of deductions set by HMRC is 21% of all winning bets. These include online casinos and betting companies.
