Gambling Tax Around The World
- Gambling Tax Around The World 2020
- Gambling Tax Around The World 2019
- Gambling Tax Around The World Per
Rules concerning income tax and gambling vary internationally.
United States[edit]
Gambling Tax Around The World withdrawn at any time. Real money funds used first. Free Spins: Available after deposit bonus is redeemed/lost, credited as £2 bonus. MONOPOLY Live only. 1x wagering and Max bonus bet of £5 applies to winnings, 7 days to accept & 7 days to complete wagering, maximum withdrawal from winnings is £200.
Germany has the highest gambling tax in the world. Casinos are taxed 90% of their gross gaming revenue! Taxes for private casinos have their own unique taxation rules. The list focuses on the main indicative types of taxes: corporate tax, individual income tax, and sales tax, including VAT and GST, but does not list capital gains tax. Some other taxes (for instance property tax, substantial in many countries, such as the United States) and payroll tax are not shown here. In 1980, corporate tax rates around the world averaged 40.11 percent, and 46.52 percent when weighted by GDP. Since then countries have recognized the impact that high corporate tax rates have on business investment decisions so that in 2020, the average is now 23.85 percent, and 25.85 when weighted by GDP, for 177 separate tax jurisdictions.
In the United States, gambling wins are taxable.
The Internal Revenue Code contains a specific provision regulating income-tax deductions of gambling losses. Under Section 165(d) of the Internal Revenue Code, losses from “wagering transactions” may be deducted to the extent of gains from gambling activities.[1] Essentially, in order to qualify for a deduction of losses from wagering, the taxpayer can only deduct up to the amount of gains he or she accrued from wagering. In Commissioner v. Groetzinger, the Supreme Court Justice Blackmun alludes to Section 165(d) which was a legislative attempt to close the door on suspected abuse of gambling loss deductions.[2]
Wagering Transaction[edit]
The Internal Revenue Service has ruled that a “wagering transaction” consists of three elements.[3] First, the transaction must involve a prize. Second, the element of chance must be present. Finally, the taxpayer must give some consideration.
Section 165(d) and Professional Gamblers[edit]
In Bathalter v. Commissioner, a full-time horse-race gambler had gains of $91,000 and losses of $87,000.[4] The taxpayer deducted the expenses under Section 162.[5] The service argued that Section 165(d) precluded the taxpayer from engaging in gambling as a 'trade or business.'[4] The Tax Court held that the taxpayer's gambling was a business activity and allowed the deductions.[6] In essence, the court held that Section 165(d) only applies when a taxpayer is at a loss instead of a net gain and “serves to prevent the [taxpayer] from using that loss to offset other income.” [7] However, if the taxpayer has a net gain, as the horse-race gambler did, then the taxpayer may deduct the expenses under Section 162, and Section 165(d) does not apply.[8]
Section 165(d) and Recreational Gamblers[edit]
In addition, in Valenti v. Commissioner, the court reiterated that Section 165(d) applies to professional gamblers as well as recreational gamblers.[9] The court stated, '... it has been held both by this Court and various courts of appeals that wagering losses cannot be deducted, except to the extent of the taxpayer's gains from wagering activities, and it has been so held even where such activities were conducted as a trade or business as opposed to a hobby.'[10] Therefore, for example, if a recreational gambler visits a casino one Saturday and accumulates $600 of losses and $200 of gains, that recreational gambler may deduct $200 of the wagering losses (because she can only deduct an amount up to the amount of wagering gains she accrued).
United Kingdom[edit]
In the United Kingdom, wins (unless in the course of a trade) are not taxable and losses are not deductible.
Germany[edit]
In Germany, wins are taxable since July 2012 by 5% of the winnings (profit).
Canada[edit]
In Canada gambling income is not generally taxable. If the gambling activity can be considered as a hobby, the income is not taxable.[11][12]
If the gambling is carried out in businesslike behaviour, then the income is taxable and losses deductible. Making approximately $50 million in sports lottery bets and earning a profit of $5 million was not considered businesslike behaviour in Leblanc v. The Queen. However, in the case of Luprypa v. The Queen the gambling income was ruled to be taxable. The case involved a skilled pool player that profited approximately $1000 per week playing staked pool games against bar patrons.[12]
Poker differs from many other forms of gambling as skilled players may increase their chances of winning significantly. In the case Cohen v. The Queen judge ruled that the gambling activities were not conducted in sufficiently businesslike manner and thus the losses were not deductible.[12]
See also[edit]
References[edit]
- ^IRC Section 165(d).
- ^480 U.S. 23, 32 (1987).
- ^Technical Advice Memorandum 200417004.
- ^ abT.C. Memo 1987-530.
- ^IRC Section 162.
- ^Id.
- ^Id.
- ^Id.
- ^T.C. Memo 1994-483.
- ^Id.
- ^Bonusfinder Canada. 'Do I need to pay taxes on my casino winnings?'. www.bonus.ca. Retrieved 24 February 2020.
- ^ abcRotfleisch, David. 'Taxation Of Gambling And Poker Winnings – A Toronto Tax Lawyer Guide'. mondaq.com. Retrieved 24 February 2020.
With every state in the U.S. now eligible to offer sports betting, we take a look around the world at countries where gambling is legal (and also where it is not) to find out what impact it has had culturally and economically.
Argentina
Is gambling legal? Yes, but only for horse racing.
Year legal gambling was established: Gambling on horses began as far back as the 1880's. Argentina banned betting on soccer results in 2018. It had previously been a lottery system run by the government, which was established in 1971, banned in 1998 and established again in 2000.
Which sports are eligible? With soccer banned, it is only horse racing.
Betting parlors or online? The country is working on an online betting system that could be approved after this summer's World Cup. For horse racing, it is legal only at the track or in designated betting agencies, no online gambling is allowed.
Betting ads permitted on team kits/stadiums? No.
How much money is gambled each year? Figures not attainable.
What positive effects have resulted from sports gambling in Argentina? The revenue from the old lottery system was distributed 45 percent in prizes, 25 percent for regional leagues, 16.5 percent marketing and 13.5 percent for AFA and the Ministry of Sports.
Australia
Is gambling legal? Yes.
Year legal gambling was established: On-track race betting was made legal in 1810, with overall sports betting following in 1980.
Which sports are eligible? There are very few sports you can't bet on in Australia. Most professional events are fair game.
Betting parlors or online? Both.
Betting ads permitted on team kits/stadiums? Yes.
Any restrictions? The main restrictions in Australia come in terms of in-game advertising on television and radio during certain times so as to protect children from a flood of gambling promotion. The timings and what is allowed varies from half-an-hour before a sporting event begins right through to the final five minutes before commencement. A code of practice has been introduced by the government.
How much money is gambled each year? According to Roy Morgan research, sports betting accounted for roughly 25 percent of the money Australians gambled in 2017. Of that, more than half is wagered on the major codes in rugby league and Aussie rules football.
Statistics from the 2015-16 financial year showed sports betting expenditure in Australia increased from AUS$815 million ($609m) to AUS$921m ($690m).
What issues have resulted from sports gambling in Australia? There have been several incidents in Australian sport where the proliferation of gambling, and the problems it can create, has been brought into question. The National Rugby League (NRL) has had two high-profile incidents in recent times. Former Canterbury-Bankstown player Ryan Tandy was found guilty of match fixing in 2010 and banned for life. Tandy was found dead in 2014 after an apparent drug overdose. Last year, Wests Tigers player Tim Simona was banned for life from the NRL after he was found to have placed bets against his own team on multiple occasions.
In Aussie rules, former Collingwood players Nick Maxwell and Heath Shaw were fined and suspended back in 2011 after an investigation discovered they had shared inside information with friends and family.
Tennis has also been affected with Australian Nick Lindahl banned for seven years and fined AUS$47,580 ($35,597) for match fixing.
What positive effects have resulted from sports gambling in Australia?
Sports betting has opened up a relatively new revenue stream for government taxation but the debate continues as to whether the cost of gambling is too great on the wider community. Much of that has to do with a belief that children are far too exposed to gambling advertising, so much so that kids now consider gambling an inherit part of the sporting contest itself.
Brazil
Is gambling legal? No.
Year it was established: Gambling has been banned in Brazil since 1946.
Betting parlors or online? There is no online betting in the country, but it is possible to make online bets through foreign sites.
Betting ads permitted on team kits/stadiums? Yes, but since there are no local betting companies, it is unusual.
How much money is gambled each year? Estimates suggest Brazilians spend around four billion Reais ($1bn) a year in foreign online betting.
What issues have resulted from sports gambling in Brazil? There has been suspicion of match fixing in third-division matches.
Ghana
Is gambling legal? Yes.
Year legal gambling was established: 1960.
Which sports are eligible? All sports.
Betting parlors or online? Both.
Betting ads permitted on team kits/stadiums? Yes.
What issues have resulted from sports gambling in Ghana? Addiction among young people and a sense that it targets the most vulnerable and poor in society. Most parlors are situated in the poorest neighbourhoods.
Gambling Tax Around The World 2020
What positive effects have resulted from sports gambling in Ghana? Employment plus a steady source of income for cash-strapped local football clubs through sponsorship. There has also been a significant boost to advertising in media with major sports shows on TV sponsored by betting companies.
India
Is gambling legal? It depends what state you are in. Forms of gambling are selectively allowed through horse racing, lotteries and casino gambling. Each state in the country has separate legislations on gambling. In some states, gambling is an offence and in others lotteries are banned.
Year legal gambling was established: There is an 1867 British law called the Public Gambling Act which had stated, 'nothing in this Act shall apply to games of mere skill wherever played' and it is from there that amendments and variations around the law operate. In 1998, the Central Lotteries (Regulation) Act allowed state governments to conduct lotteries, to a maximum of one draw a week and the states then made their own laws around their specific lotteries. Thirteen of 29 Indian states have legalized lotteries.
Which sports are eligible? Horse racing (there are nine courses in India formally run by the turf authorities), lotteries and casinos (but selectively allowed only in a handful of states and union territories -- Sikkim, Goa and the union territory of Daman & Diu).
Betting parlors or online? Betting parlors are illegal, while online gambling is unregulated -- only one state, Sikkim, has a regulatory law on online gambling. India's illegal betting market is vast. A poker league has just concluded its second season in Goa.
Betting ads permitted on team kits/stadiums? No.
Any restrictions? The only legal betting allowed as mentioned earlier is in horse racing, lotteries and casinos. There is a large underground betting market that is in operation, the biggest being on cricket matches.
How much money is gambled each year? According to an estimate by the Federation of Indian Chambers of Commerce cited in various sources, the Indian betting market is said to be worth $60 billion, with cricket betting accounting for 80 percent.
What issues have resulted from sports gambling in India? Underground betting in cricket has led to two very big scandals -- in 2000, involving South African cricket captain Hansie Cronje, and in 2013, when three players in cricket's IPL were arrested. The players were subsequently banned, but there has been a further spin-off from this, which still continues. The Supreme Court set up a committee to investigate the BCCI's administration and its structures, with a complete revamp being the conclusion and one which is still being contested.
What positive effects have resulted from sports gambling in India? Very few obvious positive effects.
Mexico
Gambling Tax Around The World 2019
Is gambling legal? Yes.
Year legal gambling was established: 2004.
Which sports are eligible? All.
Betting parlors or online? Both.
Betting ads permitted on team kits/stadiums? Yes. Tijuana soccer team is owned and sponsored by Grupo Caliente, one of Mexico's biggest betting companies.
Any restrictions? No underage betting. The minimum age is 18.
Nigeria
Is gambling legal? Yes.
Year legal gambling was established: 2005, through the National Lottery Act which established the National Lottery Regulatory Commission.
Which sports are eligible? All.
Betting parlors or online? Both, but mostly online.
Betting ads permitted on team kits/stadiums? Not at the moment, but the domestic football league just signed a contract with 1XBet.
Any restrictions? No betting adverts on TV or radio.
How much money is gambled each year? An estimated $4.2 billion per annum.
What issues have resulted from sports gambling in Nigeria? Potential for addiction. More and more young people are crowding betting shops and these days it is becoming common to hear the phrase 'cut my ticket' referring to one or two results ruining a betting slip.
What positive effects have resulted from sports gambling in Nigeria? Perhaps the potential for higher revenues through taxation.
Philippines
Is gambling legal? Yes.
Year legal gambling was established: There is one government regulatory body Philippine Amusement and Gaming Corporation, which was established in 1976 or 1977 -- it largely seeks to regulate the casino business in the country.
Which sports are eligible? Horse racing, sweepstakes/lotteries.
Betting parlors or online? Both.
Betting ads permitted on team kits/stadiums? Yes.
Any restrictions? Only sweepstakes are allowed to advertise.
What issues have resulted from sports gambling in the Philippines? Illegal sports gambling, and a basketball player accused the PBA league of game fixing.
South Africa
Is gambling legal? Yes.
Year legal gambling was established: 1994 nationally (from the late 1970's in some Apartheid 'Homelands').
Which sports are eligible? Most, if not all.
Betting parlors or online? Both.
Betting ads permitted on team kits/stadiums? Yes. Some domestic cricket teams are sponsored by Hollywood Bets (Dolphins) and World Sports Betting (Cobras), while Cape Town City FC are sponsored by SportPesa.
Any restrictions? Every ad for a betting company or lottery on radio or TV must be accompanied by a Gambler's Anonymous-type message, directing people concerned to a helpline. Even local fictionional TV shows that mention a gambling storyline will carry an announcement at the end in a similar fashion.
How much money is gambled each year? Can't say for certain. Billions, surely.
What issues have resulted from sports gambling in South Africa? Addiction, including among women, poor people spending their pensions on the slot machines, corruption.
What positive effects have resulted from sports gambling in South Africa? Job creation and economic influx, especially from things like the Sun Met and Durban July horse races, not to mention casinos like Grand West, Sun City (massive, and one of the originals, even before the 1994 laws changed), and Carnival City.
United Kingdom
Is gambling legal? Yes.
Year legal gambling was established: 1961. Within six months of the law change, it is estimated 10,000 betting shops opened up.
Gambling Tax Around The World Per
Which sports are eligible? All sports.
Betting parlors or online? Both.
Betting ads permitted on team kits/stadiums? Yes.
Any restrictions? None. Betting can take place in stadiums -- most major sports venues have gambling partners who operate booths and/or roaming bet cashiers throughout the stadium.
How much money is gambled each year? Gross Gambling Yield in the UK between April 2016 and March 2017 was £13.8bn ($18.7 billion), according to the industry regulator, the Gambling Commission. That is equivalent to £208.50 ($282.73) for every man, woman and child in the country.
What issues have resulted from sports gambling in the UK? The Pakistan 'spot-fixing' trial involving the captain, Salman Butt, and the bowlers Mohammad Asif and Mohammad Amir was probably the biggest case in recent years, with each receiving custodial sentences. That arose from an undercover reporter's sting on the players and their agent. In 2009, a pan-European police inquiry found 200 matches, including 12 in the UEFA Europa League competition and three in the UEFA Champions League, to have been manipulated after players, coaches and match officials were bribed. Also in 2009, the Football Association banned and fined four players at Football League clubs for their alleged involvement in a fixed match.
What positive effects have resulted from sports gambling in the UK? The Premier League is arguably the most widely viewed season-long domestic sports competition in the world and its commercial success is in part down to its attractiveness to sports betting. But on the governance side, the UK's long history of sports betting does mean it has been able to institute lots of good-practice measures. The 2005 Gambling Act forces bookmakers to share information of corrupt activity with sports authorities. Sports corruption is also a criminal offence under that act and the 2006 Fraud Act. Given the financial rewards, though, there will always be a strong incentive for match fixers to keep trying.