5/31/2021
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Some less salubrious casinos may tell you you have to pax tax on winnings.but if you are tax resident in the UK you DON’T. The USA has tax treaties with many countries and the UK is one of them. If the guy at the cash-out isn’t aware of the rule, call for the boss. You can always print the details out from the IRS website and keep it with you.

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In many countries like the United Kingdom and Germany gambling wins are not taxed by the government because these earnings are seen to happen 'by chance' and are not part of a salary unless you declare yourself to be a professional gambler.

This however is not the case in the United States, and all gambling wins are taxed at the highest possible rate by the Federal government, and being a non-US citizen does not mean that you are totally exempt from jumping through a few of the IRS tax hoops.

Here we take a look at what the tax implications for foreign and European citizens are for all casino winnings when visiting Las Vegas and other US casinos.

Taxation on Table Games Winnings

You may have heard that winnings on table games in Las Vegas are exempt from taxes. This is not exactly correct as all gambling winnings are subject to taxation, the difference however is that table games like Blackjack, Roulette, Baccarat, Pai Gow and Craps work on the honour system where it is up to the player rather than the casino to report any wins.

While no official reason for this has ever been given, it is probably due to the fact that in general the IRS doesn't believe that table games players can generate enough of an advantage multiplier wise to trigger substantial taxable winnings. That said though, casinos are still subject to regulations that require them to report any single win on 300 for 1 or more odds, or an amount over $600 ‐ but this would mean playing much higher stakes games than most people usually do.

Taxation on Slots and Video Poker Wins

Video Poker, Keno and Slots present a whole different ball game when it comes to taxation due to the fact that players can win up to 1000 times or more than their initial bet thanks to multipliers and progressive jackpots on offer in these games.

For this reason any single win exceeding $1200 on one of these machines will automatically trigger a hand pay which requires a casino employee to visit and unlock the machine. This will cause the generation of a W2-G form (if you are a US citizen) and for amounts over $10,000 the casino will be required to file a Cash Transaction Report (CTR) with the IRS.

Exemption for Europeans and other Non-US citizens

Generally if a foreign citizen wins a jackpot, 30% of it will be withheld and paid to the IRS. However the US does have treaties with some foreign countries whereby gambling income is not taxable by the United States Government. These countries include Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom.

In the event of a large win, in order to receive a hand pay from the casino that is tax free and not subject to a withholding fee, citizens of these countries will be required to obtain an ITIN-Number. In general the more reputable Las Vegas casinos will acquire this number on your behalf once you have filled in a few forms. Once you have this number you will be able to walk into any casino with your passport, play and if you win claim your tax free payouts.

Some of the countries mentioned above will however require that taxation on winnings be paid directly to their own governments' tax authorities when you return home, while others do not as gambling winnings are exempt from taxes.

In places like Switzerland, canton Zurich collects 35% of their citizens winnings should they be made aware of this income (which is more than the US's 30% withholding tax) so Swiss travellers should always keep their wins private if they do not want to be liable for the taxes.

While most of us never think about taxes at all when enjoying gambling in Las Vegas it is definitely worth being aware of the tax processes and implications involved should you be fortunate enough to experience a large win. Happy Gambling!

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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

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.

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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

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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.

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.

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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.

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Gambling Taxes In The Rest Of The World

CountryTax On Winnings
AustriaNo
AustraliaNo
AustraliaNo
BelgiumNo
BulgariaNo
CanadaNo
Czech RepublicNo
DenmarkNo
FinlandNo
France2% on poker cash pots, 7.5% on sports (+1.8% levy) and 7.5% on horse racing (+8% levy)
GermanyNo
GreeceNo except lottery at 10%
HungaryNo
IrelandBookies pay 1% on all bets – not winnings.
ItalyNo
KenyaNo – bookies must pay 7.5% on their winnings.
Latvia25%
LuxembourgNo
Macau40%
MaltaNo
Nigeria20%
NetherlandsNo expect lottery at 29% above €454
PortugalNo expect lottery at up to 35%
Romania1% up to 66,750 RON, additional 16% of surpassing margin up to 445,000, additional 25% of surpassing margin over 445,000 RON
SloveniaNo expect lottery at 50% if more than €4,000
SpainNo but must declare winnings as income for taxation
SwedenNo
South AfricaNo except 6% on horse racing.
United KingdomNo
USA25%

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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.