In many countries, gambling has become an important source of entertainment and tax revenue. Looking at Spain and the United Kingdom, we see two nations where gambling is not only a popular pastime; it is also a domain that brings a lot of revenue. For that reason, these activities must comply with different taxation laws that impact the gamblers and the operators as well.

This article will help us reveal how gambling taxes differ between these two pieces of legislation. We will also analyse the legislative changes closely and evaluate the overall tax burden for both players and operators. Let’s begin!

Gambling Taxes in Spain

In Spain, there is a complex five-tier tax system that applies to all gambling winnings. Basically, players are taxed at different rates depending on their winnings:

• 19% on winnings up to €12,450
• 24% on winnings from €12,450 to €20,200
• 30% on winnings from €20,200 to €35,200
• 37% on winnings from €35,200 to €60,000
• 45% on winnings over €60,000

More recently, they have reduced the threshold for declaring gambling winnings. Only in 2022, Spain’s Ministry of Finance authorized the Tax Agency to lower the limits from €1,000 to €300, in the instance the taxpayer earned over €22,000 annually.

This change will have a great impact on Spanish taxpayers. Many of them will now have to declare all winnings, including small ones, in tax returns.

Moreover, in 2023, AEAT issued 164,000 notices regarding gambling profits. This was the first time the agency had specifically examined this domain.

The taxes on sports betting are pretty much the same as for online gambling. The same tiered system applies to the winnings. However, the system applies to domestic and international betting, which are both closely analyzed by tax authorities. In fact, Spanish sports bettors, especially those with high earnings, have to deal with massive tax bills given the latest regulations.

Legislative Changes

Along with the 2022 update of Tax-Module-190, Spain’s gambling tax laws have become stricter. This change actually mandates reporting gambling winnings below €300, which came under political scrutiny.

That year, Partido Popular, Spain’s Conservative opposition party, criticized the measure, saying it was an “unnecessary and punitive tax” on casual gamblers.

However, AEAT claims that the new system streamlines the filing process for gambling, cryptocurrency, and foreign income transactions. All these allow taxpayers to complete their fillings easily.

Gambling Taxes in the United Kingdom

Unlike Spain, the United Kingdom has a different approach to gambling taxes. While gamblers are not taxed on their winnings, all the responsibility goes to operators. The Government charges a 21% tax on the profits made by gambling operators that provide services to people in the UK. This tax applies to all forms of online gambling, including online casinos, poker, and sports betting.

UK bookies must pay a 15% tax on their gross gambling profits. Once again, we remind you that gamblers do not directly pay taxes on their winnings, which is in contrast to Spain’s system.

In the UK, the focus of tax payments falls on operators, which makes things a little bit easier for punters, especially casual players, who would have to pay high taxes if the system was similar to the one in Spain.

In the United Kingdom, casino operators must comply with a tiered tax system that ranges from 15% to 50% depending on the overall profits. This country really has some favorable laws for players, as their gambling earnings remain untouched by tax authorities.

What has changed in legislation?

A major legislative change in the UK was the 2014 Gambling (Licensing and Advertising) Act, which brought offshore operators under UK tax law. What does that mean? Basically, all operators who have their bases outside the UK but offer services to British customers will have to pay taxes on their profits.

Tax Impact on Operators and Gamblers

Operators from Spain and the UK also face significant tax burdens, although the systems totally differ. For instance, in Spain, taxes on gambling actually affect players as well. Whereas in the UK, only the operators are subject to tax burden. As we already highlighted in our article, UK operators must comply with a 21% remote gambling duty that cuts a great part of their profits.

On the other hand, Spanish operators have a system where individual winnings get taxed. Although this seems better for operators, the high taxes can have an effect on player engagement, which leads to a less interested audience.

When it comes to individual gamblers, Spain is clearly the more taxing country. They have to declare their winnings and pay taxes on them. The tax can be as high as 45% for larger winnings.

In contrast, British gamblers enjoy a more favourable environment. They are able to keep their winnings from all forms of gambling, making the UK a more attractive destination for gambling fans.

Avoiding Taxes

While this feels impossible, there is a way in which you do not have to pay any taxes and still enjoy quality gambling. There are multiple sites that, besides educational gambling content, also provide demo games for some casino games.

While you can’t win any real finances, these platforms still offer a great experience while you gain gambling skills. One good example is SlotsCalendar, which, besides offering fun game options, players will also benefit from valuable content. So, keep an eye on them if you want a tax-free experience!

Which Country is More Taxing For Gamblers and Operators?

As you can tell already, Spain is undoubtedly more taxing for players. The high rates, mixed with the need to declare winnings over  €300, are really a tax burden, easily for casual punters. In contrast, players in the UK can keep all their winnings after complying with the casino’s rules.

However, in the United Kingdom, operators must pay higher taxes for their services and comply with the strict regulations imposed by the UK Gambling Commission. So, even though Spanish operators face some strict regulations, they do not have the same intensity as the financial burden faced by British operators.