Gambling Taxation in Different Countries

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Gambling Taxation

“… But in this world, nothing can be said to be certain, except death and taxes.” – Benjamin Franklin.

The tax-free world would be something of a fairy-tale with unicorns, flying piggies, and probably no death, if we were to twist Benjamin Franklin’s words.

Any industry, however big or small it is, is subject to taxes; and alas, gambling is not an exception. The main source of gambling revenue in countries is their betting and gaming establishments; but some nations do also impose duties on players. In this article, we’re going to show you the most prominent gambling countries, along with the taxes they impose on punters and gaming companies.

Singapore

Winners: 0

Land-based casinos: 5-15% of the GGR

Lotteries: 30% of sales

The might of the gambling industry in Singapore is divided between the world famous Marina Bay Sands Casino and the Resorts World Sentosa, the casino-resorts that are also deemed to be the main suppliers of gambling tax in the country. However, the duty they pay is fairly low, and amounts to 5% of the GGR for premium players with a deposit account of $100,000 or 15% of the GGR for all other players.

Bulgaria

Players: 0

Online Casinos: 20% tax of revenue

Land-based Casinos: $58,350 (BGN100,000) licensing fee + monthly fee per machine

Sports betting, Lotteries, Bingo, and Keno: 15%

Bulgaria is indulgent to gambling operators, charging them fairly low taxes. Land-based casinos are obliged by law to pay levies on each gambling machine as well as a licensing fee, while online gambling venues are taxed at a rate of 20% on revenue.

Operators that run such forms of gambling establishments as Dog and Horse racing, Bingo, Keno, sports betting, and lotteries are subject to a 15% tax on the value of bets.

Italy

Players: 0

Online Casinos: 25% of the GGR

Land-based sports betting: 20% of the GGR

Online sports betting: 24% of the GGR

Italy Gambling TaxationCasinos and betting operators were knocked for a six, once the Italian government introduced the figures from the 2019 tax system. According to the information revealed there, venues that offer online casino games to the Italians will be charged a duty of 25% (compared to 20% in 2018) on all revenue.

The land-based and online sports tax rate will now go up by two percent; from 18% to 20% and from 22% to 24% respectively.

Portugal

Casino winners: 0

Lottery winners: 20%

Land-based casinos: 4.5-40% of GGR

Online casinos: at the moment of writing 15-30% of GGR

Land-based bingo: 25% of GGR

Online betting on sports: at the moment of writing 8-16% of turnover

All online sports betting operators in Portugal have been in a lather lately, as the government recently introduced a new tax rate of 25%. Compared to the previous 8-16%, the new tax rate may cause an exodus of operators from the market.

Provided the tax-related legislation comes into force, online casinos will also be subject to the 25% duty on the gross gaming revenue.

As for the lottery winners, they have to cut as much as 20% of their gaming winnings, whereas casino players are exempt from taxes.

Macau

Players: 0

Casinos: 40% of GGR

This small city on the south-eastern coast of China, Macau, is the only gambling destination available for the Chinese and some nearby overseas countries. For this reason or another, the tax rate imposed on casinos is fairly high, reaching as high as 40% of the gross gaming revenue. These levies include a 35% tax on GGR, a 1.6% contribution to the Macao Foundation, and a 1.4 – 2.4% contribution for social and economic purposes.

United Kingdom

Players: 0

Land-based Casinos: 15-50% of the revenue, depending on the GGY of the premises

Online Casinos: 21% of the revenue (from October 1, 2019); now: 15% of the profit

Lotteries: 12% of the turnover

Bingo: 10% of the profit

United Kingdom Gambling TaxationAlbion has long since been among the top gambling countries with the largest revenue gained from games of chance, and indeed, this continues to grow steadily, year in and year out. At the same time, gambling taxes in the United Kingdom are somewhat mild, giving virtually free rein to gambling operators.

The toughest tax laws apply to land-based casinos, with a taxation of between 15% and 50% on the revenue (depending on the GGY of the premises). As for today, online casino operators are charged a fee of 15% on the profit; but from October 1, 2019, they will have to eke out a 21% duty on the revenue.

Lotteries and Bingo are the least taxable forms of gambling, with a tax of 12% on the turnover and 10% on the profit respectively.

Czech Republic

Players: 0

Casinos: 19% corporate tax + 35% of the profits

Sports betting: 19% corporate tax + 23% of the revenue

As early as in 2016, the Czech Republic was welcoming gambling operators, with some acceptable taxes of up to 20% on all types of gambling activities. But on January 1, 2017, the authorities introduced a new, stricter tax system; one which obliges casinos to pay a 35% duty on the revenue and 19% corporate tax.

As far as betting on sports is concerned, the operators are charged a fee of 23% on the profits, along with 19% corporate tax.

Australia

Players: 0

Online/Land-based Casinos: 0 – 62.53 % of player loss/gross profit/net revenue (depends on the state)

Keno: 2.53 % of turnover; 1.75 – 29.4% player losses; up to 29.4% gross revenue

If the countries with the heaviest gambling taxation rates were aligned, Australia would be somewhere in the middle of the spectrum. The imposed taxes on land-based and online casinos vary depending on the state, but they don’t exceed 62.53% on the monthly player losses. In addition, all operators are bound by law to pay license fees.

Denmark

Players: 0

Online Casinos: 20% duty of the GGR (gross gaming revenue)

Land-based Casinos: 45% of the GGR; 75% of the GGR provided that the GGR exceeds $612,000 (DKK 4 million)

Lotteries: 15-17,5% on the winnings that exceed $29.7 (€26)

Sports betting: 20% of the GGR

Denmark Gambling TaxationAmong the countries where gambling is legal, Denmark has one of the stiffest tax systems for land-based casinos. While players are not bound by law to pay any tax on their winnings, the operators are subject to a duty of 45% on the GGR, or 75% on the GGR if it exceeds DKK 4 million. The taxation on online casino is less severe, amounting to a 20% fee on the GGR.

As for the lotteries, both online and land-based operators are charged fees of 15-17,5% on the winnings that exceed €26. Sport betting establishments have to pay a duty of 20% on the gross gambling revenue.

Luxembourg

Winners: 0

Land-based casinos: 10-80% of the GGR

Sports betting and lotteries: 15% of the GGR (except National Lottery)

Despite being easily unnoticed on the European map, Luxembourg possesses about 10 land-based casinos, a great number of which are scattered along the borders with France, Germany, and Belgium. This country, which is literally squeezed between the first two, has fairly high taxes imposed on brick and mortar gambling venues, which range from 10% to 80% on the GGR. Taxes on sports betting and lotteries aren’t as heavy and amount to 15% of the revenue; while the National Lottery is not subject to any duty whatsoever.

Austria

Players: 0

Online/Land-based Casinos: 35 – 85%

Lotteries: 2 – 17.5%

Taxation in Austria bypasses gamblers, giving them a free hand for their gambling activities.

By contrast, the current tax legislation pertaining to games of chance doesn’t spare either online or land-based casinos. Gambling venues are required to pay as much as up to 85% levies on all stakes (minus winnings). Casinos that are subject to a tax rate of 35% get off pretty lightly.

The taxation on lotteries is less severe, amounting to between 2 and 17.5%. Taxes on Keno and sports betting are levied on either the turnover or player losses or gross revenue. Taxation in Australia leaves the players untouched.

Gambling is an indispensable source of income to Australia that generated about 8% of the total country’s revenue in 2015-2016.

Finland

Players: tax-free, except for several cases

Casinos: 10% of the GGR + 30% of the given out winnings

Lotteries: 10% of the GGR + 30% of the given out winnings

Totalizator: 9.5% of the GGR

Finland Gambling TaxationIn addition to its basic meaning, the concept of “lottery” in Finland also refers to slot machines and all other casino games, according to the Finnish Tax Administration’s website (Vero.fi). Therefore, taxation is common to all these forms of gambling.

Citing to Vero.fi, casino and lottery operators are subject to a 10% tax on their Gross Gaming Revenue as well as they have to pay out 30% of the winnings given out to players.

When we were looking for the answer to the question “Are casino winnings taxable?” we again end up on Vero.fi:

The prize is taxable if:

  1. It has the characteristics of wages, paid for work or personal services
  2. The payer is the winner’s employer
  3. It is not based on chance, i.e. unsystematic or random outcomes
  4. It does not arise from an open, public event
  5. It is based on a competition where the best results are rewarded
  6. It is won in a lottery operated outside the European Economic Area.

Germany

Players: 5%

Land-based Casinos: 20-80% of the gross gaming revenue

Online casinos: 19% VAT tax

Sports betting, Horse racing: 5% of stakes (whether online or land-based)

Operators of slot machines outside casinos: from 12% to 20% of the GGR

Lotteries: 16.66% of stakes

With a 5% tax on gambling winnings, Germany is one of the countries which doesn’t consider gambling as a windfall.

Land-based casinos are taxed at a rate of 20-80% on the GGR, while online operators are subject to a 19% VAT tax. Sports betting and horse racing escaped strict taxation, with a fee of 5% charged on wagered stakes.

As far as lotteries are concerned, the tax rate is a devilish figure of 16.66% of the total stakes.

France

Casino Players: 12% of the winnings that exceed €1,500 ($1,710)

Land-based Casinos: up to 83.5% of the revenue

Sports and Horse race betting: social security contribution + percentage of the total amount of wagers

Lotteries: 69.1% of stakes (minus winnings) and VAT of 19.6%

While Monaco is widely regarded as tax heaven, France appears to be the primary executor of the devil’s tax orders. Taxation in France covers every segment of the people’s life, including even gifts given to the family members or relatives; not to mention gambling.

French players, who win over €1,500 ($1,710) at land-based casinos are subject to a duty of 12% on the winnings, while the bricks and mortar casinos themselves have to pay up to 83.5% of their revenues. Establishments that offer lottery tickets are obliged to withhold 69.1% of the stakes wagered (minus winnings) and VAT tax of 19.6% from their revenues.

USA

Casino winners: 25%

International casino winners: 30%

Lottery winners: up to 62.5%

Casinos: 20% (vary depending on the state) of the GGR

Lotteries: yes

USA Gambling TaxationWhen it comes to naming the most prominent gambling destination, there is a stumbling block of two cities continuously vying between each other. The Monte Carlo vs Las Vegas contest for the gambling hub title seems endless, with both cities drawing millions of punters every year.

While it’s still obscure which city will take the lead in this competition, Las Vegas and the US itself lag behind Monte Carlo in terms of taxation on gambling winnings. All casino winnings in the United States are taxed at a rate of 25% for US residents, whereas International recreational players should pay a duty of 30% of the money won. Monte Carlo, in turn, doesn’t burden either its dwellers or foreign casino visitors with taxation on their winnings.

As for the lottery winnings, the tax system is a real thorn in the flesh. In addition to the 25% tax, US residents will have to pony up to 14.6% in federal taxes. And if a jackpot winner decides to withdraw their winnings in one lump sum, they are subject to an additional deduction of 38%. Otherwise, jackpots are paid out in 30 increments over 29 years.

Spain

Winners: declare winnings as income (up to 45%)

Land-based/Online casinos: 20% of GGR

Remote sports betting: 20%

The Spanish parliament has recently slashed taxes on numerous online games of chance, encouraging foreign operators to tap a new market. Since July 2018, the tax levied on remote casinos and bookmakers is a flat 20%, compared to the previous 25%. Taxation on brick and mortar casinos remained at a rate of 20%.

When it comes to the Spanish, their winnings aren’t subject to any fee. By contrast, the legislation obliges residents of Spain to declare their winnings as income; and the tax ranging between 19% and 45% is subsequently charged from the income.

Netherlands

Online/Land-based Casino Players: 0

International website casino players: yes

Lotteries Players: yes

Online/Land-based Casinos: 30.1% of the GGR

Tax legislation on gambling in the Netherlands is vague, as the only reliable source of information, the Netherlands Tax Authority website (belastingdienst.nl), doesn’t provide data in English, while the information in Dutch is fairly ambiguous. The most explicit data available on the website pertains to casino players, who, as the law states, aren’t subject to levies on their winnings; provided that they won money on domestic websites or B&M casinos. By contrast, the winnings gained at foreign online casinos are taxable.

As far as gambling operators are concerned, they are allegedly subject to a fee of 30.1% on their Gross Gaming Revenue.

For more accurate information, please contact the Dutch Tax and Customs Administration.

Canada

Winners: 0

Casinos: yes (allegedly 20% of the GGR)

When speaking about gambling taxes in Canada, there is no open-source information on that. The only reliable fact is that neither casino nor lottery winners are subject to duty on their winnings.

More information can be found on the Government of Canada website.

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