Jul 14, 2008  Dear John, I've read many articles about slot machines on the Internet and almost all of those are offering: 'the truth about slot machines.' With full respect to your educational level and your experience I would like to discuss certain questions regarding the slot machines. Play all free slots machines. Can You Handle the Truth about Slot Machines? Playing slots is the most popular casino game, yet slot machines are most often misunderstood. The funny thing about slots is that so many people know so less about it than they do about more complex machines such as automobiles, for instance. Truth: There was a time, long ago, when casinos did have strategic placement of loose slots to draw people in but that is not necessary any more. Slot players don’t care about being drawn into the casinos; indeed today’s slot players run into the slot aisles to play.

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.

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• Is Online Poker Winnings Taxable
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• Are Online Gambling Winnings Taxed

Do you have to pay tax on your gambling winnings?

UK Gambling Taxes

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.

Canada Revenue Agency, 2013 FC 916. It is the latest decision on the (non-)taxation of poker winnings following the Tax Court of Canada decision in Cohen v. The Queen, 2011 TCC 262. Radonjic is a judicial review of the Minister of National Revenue’s discretion to allow or disallow taxpayer-requested.

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.

• Even online gambling winnings remain a viable source of income and are therefore taxable. Thus they should be reported to your tax report. Just like any other form of income or outcome, referring to money, Bitcoin gambling earnings must be reported.
• Radonjic’s winnings were not taxable, Mr. Cohen’s losses (being losses that did not result from a business) could not be deducted against other sources of income. It will be interesting to see what facts will be necessary in order to tip the balance and turn the amateur poker player into someone that is carrying on a taxable business.

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

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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.

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.

Is Online Poker Winnings Taxable

Gambling Taxes In The Rest Of The World

Are Online Poker Winnings Taxed

Are Online Gambling Winnings Taxable

Are Online Gambling Winnings Taxed

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.