Online gambling taxation policies adopted in different countries
As the gambling market is expanding at a fast pace, there is one sole issue that concerns the casino operators – gambling taxation. The amount charged for gambling taxation is usually based on the operation quarter and the legislation of that country, and are often more expensive than the other industrial areas. Commonly, casino players pay a meagre amount of tax from their winnings in many countries, and the casinos pay from their Gross Gaming Revenue (GGR). In this way, the economy of the country where the casino is accredited to, benefit from gambling. However, the tax differs from one country to another, although it’s generally the percentage of the player’s wagers minus the wins.
Where does the taxation amount go?
The government has been trying to ban online gambling practices around the world but it has miserably failed to do so, in the past. Thus, considering the amount of taxes levied in each country, the government receives a large number of funds for the country. Consequently, advanced countries have implemented the online gambling tax regulation in recent years. The budgets received from the taxation funds are exercised on the development of tourism and national projects.
CIS countries & gambling
The countries of the Commonwealth of Independent States (CIS) were not permitted to gamble for decades until lately by the government. Particularly in Russia and Ukraine, only forms of gambling such as online betting and lotteries are legally allowed to play.
The Republic of Belarus is the latest country from CIS to be legalised for gambling after the enactment of the new bill. However, the tax rates levied on these countries differed accordingly – like, in the case of Russia, casinos that accept online betting are subjected to pay tax amount of RUB 2.5 to 3 million. As for the players, the taxes are subjected only to those whose winnings are above RUB 15,000. The tax levied on the native Russian residents is 13%, whereas 30% for the international players. In the case of Ukrainian players, they are charged 19.5% taxes, though only lotteries are legal to play, and 1.5% of the total charges are imposed to support the army.
In the year 1968, the practice of gambling was legalised after the official introduction of the Gambling Act in the UK. In 2014, it was announced that the casino operators in the UK are required to pay 15% point-of-consumption tax. However, in 2018, the town lawmakers voted to increase the tax from 15% to 21% by the end of 2019, to compensate for the losses caused due to the fixed-odds betting machines’ maximum stake reduction. But, the players with winnings are exempted from the tax levies.
In the United States of America, the taxes levied on the residents are enacted involving the gambling market, and the gambling taxes are applied only to brick-and-mortar casinos. This is because online casinos are yet to be legalised in most of the US territories, while online sports betting is approved in states like West Virginia, Connecticut, New Jersey, New York, Mississippi, and Pennsylvania. The tax costs differ depending on every state, and, the highest tax-paying state is Pennsylvania with 55%, and 25% for the residents on the winnings, and 30% for international players. As for the lottery winners, their tax value goes up to as high as 62.5%.
The gambling laws in South Africa have been complicated since the year 1673. The government never permitted the residents to play casino games legally until 1965, when South Africa’s Gambling Act officially outlawed all forms of gambling except horse racing. However, it was in the year 1994 that the new South African democratic government finally legalised all forms of gambling. The tax law levied in Africa is 29%, and players with winnings are taxed 15%.
The practice of gambling in Australia dates back to the year 1810 when horse racing was the most relevant form of gambling. Then came the Poker machines in 1956, and since then, the gambling industry has been growing in Australia. However, in 2017, there was a nationwide ban on online gambling. However, from 2019, bookmakers and online casinos have to pay 15% tax from their gross income. There is no tax on winning.
Mexico and Argentina
In these countries, the casino operators normally achieve the gaming license from the local government to operate in the province. In Mexico, the casino operators are levied 30% tax with an additional 12% tax from the winnings, while Mexican players have to pay their share of 6% tax. On the other hand, in Argentina, operators have to pay 41.5% tax rate, and players who exceed 1200 Argentine pesos winning must pay 31% tax.
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