Hang on tight, a delicate topic is about to follow. Delicate and essential, as every casino player should be aware of this info. Let’s have a talk about taxation on your casino winnings.

How much is a player required to cover in taxes based on local laws and regulations? That’s not a simple question, the answer varies and depends a lot also on the type of gambling activity per say. Some countries take it lighter, while others dig really deep into the lucky winner’s pocket. Let’s have a short overview and see where you might consider moving in the future.

US

As we know this is a very wide and complex country, so winnings are subject to both federal and state regulations.

When it comes to federal rules, the flat fee is 24% of your winnings, the IRS requires all winnings to be reported as “Other income” on your tax return. This includes, but is not limited to: casinos, lotteries, horse racing, sports, poker and even some game shows.

Then you’ve got each state’s regulations, which might be more or less favourable. Let’s have a look at a couple of examples. In Nevada for instance, there will be no other extra taxation on gambling winnings. As we know, this state is quite favourable to players when it comes to gambling activities, so winnings are only subject to the federal taxation which we covered earlier.

In New Jersey, the tax rate can range from 1.4% to 10.75%, depending on your total income. In New York, you’ll comply with a rate from 4% going as high as 10.9%, plus a city tax rate worth 3%.

Pennsylvania has decided to impose a flat rate worth 3.07% on all winnings, and casinos will be required to report to the states all winnings worth over $600.

California and Florida seem to be quite relaxed about it. These states don’t add any extra tax (apart from the federal one), while you still have to report any winnings resulted from playing casino games or sports betting.

Keep in mind, if you win above certain amounts, casinos are required to provide you with a special form to report your gambling winnings, which is also reported to the IRS and state tax authorities.

Canada

Good news from Canada! Here, casino winnings are generally not taxable for recreational players. The Canadian tax law treats gambling as a windfall or luck-based activity, not as a source of income. This means that individuals who gamble casually on casino games or sports and win are not required to pay taxes on their earnings.

You do have to keep track of your winnings, however, if someone is deemed to be a professional gambler, where gambling is their primary source of income or conducted in a business-like manner, their winnings may become taxable. In such cases, gambling activities are treated similarly to self-employment, and related expenses can be deducted.

United Kingdom

Another favourable country when it comes to taxation is the UK, as all gambling winnings are completely tax-free. This includes winnings from casinos, sports betting, lotteries, and many other forms of gambling. Here the authorities don’t think of gambling as a profession, so it’s not considered earned income. This policy is meant to make things more appealing for gamblers, as well as for betting companies. Regulations are quite strict when it comes to players’ exclusion and general gambler’s protection.

European Union

Tax regulations on gambling winnings can be quite diverse across the EU countries. Some countries have taxes on winnings, while others avoid that entirely. Here are some notable examples:

• France: tres bien pour vous. Casino winnings are not directly taxed for individual players. However, the government does impose a tax on casinos and gambling operators, which could mean extra fees on your winnings at a casino. It’s always best to throughouly check full terms and conditions at each casino (we know, that’s boring, but best to be safe).
• Germany: casino winnings are generally tax-free for casual gamblers. However, once again, for professional gamblers there is a different matter, if your primary income results from gambling, you may be required a tax on that income.
• Spain: winnings are taxed under the general income tax rules, with rates ranging from 19% to 28%, depending on the amount. However, gamblers are allowed to deduct losses against winnings for tax purposes.

All in all, we hope this won’t bring any dramatic change to your living situation, don’t start packing just yet! Joking aside, we remind you that this is not professional advice on taxation and you should definitely search for someone fully qualified to provide you with such.

Please bear in mind this is no professional advice and tax regulation are constantly changing, so we advise you to consult a professional and get properly familiar with your obligations.

Disclaimer: Players must be 18 years + to partake in any gambling, betting or casino activity. Players are urged to seek help if they require it. Players play at their own risk.