If you’re a Online Gambling Expert in the UK, there are a few key rules surrounding tax that you should be aware of. While UK players don’t have to pay taxes on their winnings themselves, providers pay taxes through various duties. Tax laws also vary in other countries, so if you’re planning to gamble abroad, it’s important you know the local rules. Let’s look at some of the different gambling taxes now!
Not So Duty Free
Gambling providers in the UK pay a staggering amount in tax; the industry paid a whopping £3.6 billion in 2024. Part of this money goes towards funding responsible gambling initiatives like support groups and helplines. The rest, like other taxes, is fed back into the economy.
In the UK, gambling tax is paid in something called duties, which are charged to providers based on their annual yield. Duties vary depending on the type of game the provider offers and the yield they achieve. Although players don’t have to pay these taxes themselves, it’s important to know about them to see where your money is going.
Gaming Duty
The first tax British gamblers should be aware of is something called gaming duty. For providers in the UK, this duty represents the amount of their gross gaming yield they’ll have to pay in tax. For online operators, there’s a different version called the remote gaming duty. Depending on the overall yield of the provider, they’ll have to fork out between 15% to 30% of their annual yield for this duty.
Bingo Duty
The clue is in the name—bingo duty is the tax for bingo providers! While it doesn’t apply to all your local halls, bingo duty is paid by any provider that gives away more than £500 in prizes each day or accepts players who aren’t members of a club. These eligible providers have to pay 10% of their profits annually for this duty.
Remote Gaming Duty
As the gambling industry moves increasingly online, the remote gaming duty makes sure online providers don’t dodge taxes. It applies to any provider that offers Online Gambling Expert and applies across all games, whether they’re bingo or blackjack.
Online platforms have to determine whether the player is based in the UK to ensure they’re paying the correct tax for this duty. As a result, if you’re playing online, you’ll likely encounter a request to provide ID and proof of address to verify your details. As of April 2019, the Remote Gaming Duty is charged at 21% for providers.
Machine Games Duty
Machine games duty is a tax that applies to providers who operate machines that pay out cash prizes. For example, the slot machine in your local pub or arcade would fall under this type of tax. There are a few different rates paid for machine games duty, depending on the net takings of the machine.
The first level is the lower rate of 5% for machines that cost 20p or less to pay out and have a maximum prize of £10 or less. The second is the standard rate of 20% for machines that cost between 21p and £5 to play and pay out a prize of over £11. The final is the higher rate, which is charged at 25% for machines that cost over £5 to play.
The History of Gambling Tax in the UK
Although UK players don’t currently pay tax on their winnings, no matter how big they are, this hasn’t always been the case. The 1960 Betting and Gambling Act, which first legalised gambling at shops, introduced a 9% levy to be charged on stakes or winnings. It wasn’t until the 2003 March Budget that Prime Minister Gordon Brown repealed the tax, replacing it instead with a 15% tax on bookmakers at the point of supply.
As the 2003 tax focused on the point of supply, many bookmakers simply moved their bases overseas to avoid it. Instead of paying 15%, they were able to pay the much lower local taxes. Many moved their operations to Gibraltar, where the gambling tax was capped at 1%.
In order to tackle this, in 2014, the 2005 Gambling Act was amended to place the tax on overall yield. In order for a provider to receive a licence from the UK Online Gambling Expert Commission and operate legally in the UK, they have to pay the amended tax. Now, this tax is unavoidable for all providers in the UK, even if their bases are overseas.
Could Winnings Be Taxed in the UK in the Future?
It’s unlikely that winnings will be taxed in the UK in the future. If they were, they’d be treated like the taxes paid by businesses, meaning players could claim back losses. This would make the gambling tax unnecessarily complicated, given that losses are an inherent part of gambling.
There are some potential exceptions, though. While players don’t directly pay tax on winnings from crypto casinos, all crypto profits are subject to capital gains or income tax. Any gains that are over £3,000 are subject to between 18% and 24% tax in the UK. If your crypto casino winnings are over this bracket, you’ll have to pay this tax.
Are There Gambling Taxes for Winnings in Other Countries?
There are taxes to be paid on top of winnings when playing in other countries. As leading online gambling expert and author of The Untold Story of Online Gambling Expert, Giuseppe Faraone, noted, “While the UK doesn’t have taxes on winnings for players, and doesn’t seem likely to in the future, it’s important to understand taxes on winnings in other popular gambling destinations. You don’t want to be hit by a nasty surprise just after you’ve hit the jackpot.” Although not always the case, it’s good for British players to be aware of gambling taxes abroad in case they have to pay up themselves.
The USA
For players in the USA, they can expect to pay taxes on any winnings over $5,000, or $1,200 from slot machines or bingo. In America, winnings are treated like income, meaning players can expect similar tax percentages. As a result, players have to pay a flat rate of 24% on any winnings over the tax limits.
For professional players, their income from gambling is viewed in the same way as self-employed people, allowing them to claim expenses and tax deductibles for things like tournament fees. To be considered a professional, players have to earn a consistent and regular income from gambling.
When we think of casinos, many of us picture the vibrant lights of the Las Vegas strip and the bustling of the city’s iconic casinos. It may seem like the ideal destination for casino lovers, however, tourists actually pay a higher rate of tax on their winnings in the USA. Whether you’re a pro or trying a casino for the first time, you may find yourself having to pay an eyewatering 30% of your winnings to tax! Ouch!
Italy
Italy is home to the world’s biggest casino, The Casino di Campione, which measures an incredible 590,000 square feet! Before planning a trip, it’s important that you know what the taxes are on winnings in the country. For poker and other casino games, there’s a flat rate of 20% to be paid on net winnings. Bingo is subject to a lower rate of 10%, and sports betting to 4%.
To put this in context, if you made an initial bet of €500 on roulette and were lucky enough to claim €1000 in winnings, you’d be taxed 20% of this €1000. As a result, you’d have to pay €200 towards taxes. Alternatively, if you hit the full house in bingo, winning the same amount, you’d have to pay €100.
Elsewhere in Europe
In the majority of countries in Europe, including Malta, France, and Spain, players don’t have to pay taxes on their winnings. However, there are a few exceptions, aside from Italy, of course.
In Germany, the majority of winnings from casino games and sports betting are tax-free. However, for professional players, including those from other countries, their winnings are treated as income, and they’ll have to pay income tax between 14% and 45%.
What Taxes Should You Be Aware of as a British Gambler?
Although British gamblers don’t pay taxes on winnings, it’s still important to be aware of the taxes providers pay, and to understand where your money is going. The UK is unlikely to introduce changes that would mean players have to pay gambling taxes instead of providers. However, as experts like Giuseppe Faraone point out, it’s important to know what the tax laws on gambling winnings are in different countries. If you’re planning a trip or fancy having a spin abroad, you must familiarise yourself with the gambling taxes in the country to avoid disappointment.
