Are You Tax Efficient With Your Gambling Habbits?

[SirJohnVonSlotty]

I'm researching the topic on how many users actually report their winnings or losses to the tax authority, and from the current research there's a major discrepancy in the processes from country to country;

#1. Residents of the UK, Canada, and Australia don’t need to pay anything at all, as these governments view this money as the result of good fortune and do not view gambling as a profession. These earnings do not need to be reported, and nothing is owed on them.  
#2. Malta is also pretty simple. Gambling winnings are only taxed if the player is a professional gambler, though this term is not strictly defined, but if you're earning above the "grace amount" of 12950 EUR, you can apply for it.
#3. The US taxes all gambling winnings as income. In fact, there’s even a special form for documenting your gambling wings: Form W-2G. This money is counted towards your yearly income and will be taxed at whatever bracket you fall into at both the state and federal levels. You must keep track of the type of gambling, the amount of the gambling winnings, and the general ratio of the winnings to the wager, as these will all be needed for filing. Conversely, any gambling losses that occur on a real money online casino platform can be tax deductible in an amount up to your total yearly winnings. Losses and winnings must be filed separately and not as a net amount.

Source: EsportsHeadlines.com


Now I'm quite curious how other gamblers are managing this part of the story, if they manage it at all.

So, question to you, did you ever consider paying taxes on your gambling winnings, or deduct the taxes with the losses you've created? If not, what is the reasoning behind it?

[Yogee]

[....]
If not, what is the reasoning behind it?

I hardly make a big bank from gambling on a yearly basis so it doesn't make sense to even add that to the income tax returns. I think authorities should only go after casinos since they rarely end up in a loss. It's probably more costly for them to go after most casual gamblers that don't even keep a record of their wins and losses.

[Poker Player]

Well, you only talk about Anglo-Saxon countries and I am going to add the socialist Europe which is the most heavily regulated in the world in terms of gambling.



https://www.egba.eu/eu-market/licensing/

Let's put this in a more global perspective.



https://slotegrator.pro/analytical_articles/where-online-gambling-is-legal.html

So, without knowing exactly what happens in all the countries of Europe, in most of them taxes are paid for gambling, which the user has to declare in the income tax return.

Are gambling winnings taxable in Italy?

The tax regime applying to online gambling is profit-based. The tax rate is 20% for games of skill (including poker tournaments) and casino games, card games (including poker) and bingo. The rate is 22% for sports betting...

Are gambling winnings taxable in Europe?
In Europe, not all jurisdictions are tax free. Germany, for example, not only taxes winnings but stakes as well. German gamblers need to pay a 5% fee on any stake wagered whether they're betting online or playing online casino games. Those who lose are not required to pay more tax.

[Latviand]

Now I'm quite curious how other gamblers are managing this part of the story, if they manage it at all.

So, question to you, did you ever consider paying taxes on your gambling winnings, or deduct the taxes with the losses you've created? If not, what is the reasoning behind it?

Tax code in my country which is the Philippines is pretty vague when it comes to gambling winnings, although it says that if my winnings are around 200 USD below are taxed at 10% while anything above would be taxed at 20% pretty big to be honest and this is the first time that I've known of this because I don't think the Revenue Service in my country hasn't been on my ass yet for taxes regarding gambling winnings, I only play poker though so it's possible casinos and lottery wins are a different thing.

[Poker Player]

I forgot to say earlier that I think there are a lot of tax efficient gamblers on this forum because they don't declare any of their crypto bets, and I would be the vast majority of them don't get caught. Someone playing from regulated Europe or from countries where gambling is prohibited with vpn and/or Tor to get past the blockades and play in unlicensed crypto sites or licenses from places like Curacao is not going to shoot himself in the foot by declaring a prohibited activity to their country's treasury.

[Crypt0Gore]

I think it makes sense if casinos are the ones paying the government, I believe that's what they are doing presently, it's why they are allowed to run their business after they are registered, tax on casinos itself makes sense than tax on gamblers jackpot, anyway, I am not from any of these countries so I will never know.

I am from a country that tax payment on gambling is not even needed, whatever the government wants is going to come from the casino owners pocket, and seriously I don't like exposing how I make my money to the banks, if the bank knows then the government knows too, this is why I don't use Fiat for gambling, I'm grateful that we have crypto for this purpose if not I won't be a gambler or a investor today.

I don't want situations where I won millions of dollars and withdraw that money into my bank account, it's going to be a problem as I will have to prove where that money comes from, any big money is probably a fraud or other illegal cases in my country.

Whatever I do about Money must stay away from centralized entities, they will monitor my life if they noticed my net worth.

[Accardo]

I forgot to say earlier that I think there are a lot of tax efficient gamblers on this forum because they don't declare any of their crypto bets, and I would be the vast majority of them don't get caught. Someone playing from regulated Europe or from countries where gambling is prohibited with vpn and/or Tor to get past the blockades and play in unlicensed crypto sites or licenses from places like Curacao is not going to shoot himself in the foot by declaring a prohibited activity to their country's treasury.

This is risky in some countries, and can be considered tax evasion. If unfortunate, the player can in a day get unlucky twice, if caught by the casino, he'll lose his earnings and as well face the Government. There are other means of avoiding the tax, like compiling a good number of losses amounting to less winning amounts when checked alongside your winnings. Since smaller amounts don't get taxed. I read on quora a player that gets slips of losses from different players and submit as their own losses, thereby, deducing the amount of tax expected to be paid for winning. But, for how long will that be? any player that wins big may not continue to avoid paying taxes.

I think it makes sense if casinos are the ones paying the government, I believe that's what they are doing presently, it's why they are allowed to run their business after they are registered, tax on casinos itself makes sense than tax on gamblers jackpot, anyway, I am not from any of these countries so I will never know.

In some countries, the casino deducts the tax from the winning of the player, which is then forwarded to the government and the player assigned proof of payment. The  tax on gamblers who win big, are also seen as income, used by the government to maintain the country. That's why different countries differ in terms of gambling winnings, in some countries it's not required for a gambler to pay tax for being lucky.

[aioc]

So, question to you, did you ever consider paying taxes on your gambling winnings, or deduct the taxes with the losses you've created? If not, what is the reasoning behind it?

We don't have this in our country and I don't include it in my tax report I'm not a whale and I never made a profit from my gambling I win some but most of the time I lose and I don't want to deduct my losses to my tax, gambling for me is only recreational, our government does not charge taxes to small time gamblers but it's different when you win a lottery which the favorite gambling form in our country.
They deduct 20% from your winning of course since the government run the casino and lottery they targeted big winners instead of small bettors.

[Jating]

So, question to you, did you ever consider paying taxes on your gambling winnings, or deduct the taxes with the losses you've created? If not, what is the reasoning behind it?

We don't have this in our country and I don't include it in my tax report I'm not a whale and I never made a profit from my gambling I win some but most of the time I lose and I don't want to deduct my losses to my tax, gambling for me is only recreational, our government does not charge taxes to small time gamblers but it's different when you win a lottery which the favorite gambling form in our country.
They deduct 20% from your winning of course since the government run the casino and lottery they targeted big winners instead of small bettors.

Same goes with me, so I will say that I don't pay any gambling taxes because it is not mandated by law here. On the other hand, it is the casino themselves who pay taxes to the government, but I think it's very lenient to some extend as our government are trying to attract casinos to put here, to bring jobs in our country.

But if they are going to say that we will have to pay taxes then why not? So I guess we are just lucky that our government even how small or big gamblers we are, we are not on any tax bracket.

[Z390]

Governments are benefiting a lot from casinos in the countries, they pay a lot of money to keep their business running, I have heard stories about how the government will tax you when you want to build a casino in a particular city, you will be paying a lot, running a casino is not for a fainted heart.

I don't know about other countries but in my country you don't need to pay anyone to keep gambling, it's a game of luck and many gamblers will lose money, the government understand this, if it's other way around every single gamblers will be forced to pay tax or something related to it, I mean isn't it why the government in some countries are going after crypto investors?

They know that casinos will never lose or run out of business because its a win situation for those who are running the business, it's like feeding off people and the government understand it, only few countries ban casinos, it's a lucrative business.

[xSkylarx]

In my country the lottery winners that won over $200 they are already automatically deducted with 20% tax on it meaning you wont received your full winnings because it was already deducted 20% in that shop and they are the one who will remit it to the tax department, below $200 is not taxable but in casino if you win a jackpot or you have been lucky that win good amount of money this depends if someone in authority will ask you to go to their office to fill out a form that you've declared that winning  because mostly ive noticed that those jackpot winnings like in slot machine they tend to pay tax over the counter as they declare their winning but to others that playing multiple games and got multiple winnings I don't see that they declare it as they just leave.

Tax is everywhere in our country and most of the people that notice that you won in gambling over $200 tend to report it to the tax department which is actively contacting you to pay their cut. That is why others keep quiet on it and they are also gambling online in crypto because no one will know you won unless you tell them.

[SirJohnVonSlotty]

In my country the lottery winners that won over $200 they are already automatically deducted with 20% tax on it meaning you wont received your full winnings because it was already deducted 20% in that shop and they are the one who will remit it to the tax department.

The lottery part was always interesting, every country has some type of "national" lottery and usually that framework is automatically (and heavily) taxed. If someone wins a million on the lottery, they don't even get a chance to get the whole amount onto their bank account, the tax is automatically deducted before they even get the winnings.

[piebeyb]

Usually, if it's in a legal country, of course every gambling site, whether it's a lottery, will automatically deduct tax on their users' winnings, just like crypto exchange sites in my country, but since casinos and gambling of any kind are illegal in my country, I don't have to pay tax on my winnings, but If it is possible in my country to legalize casinos or other gambling sites, of course I will pay taxes if I get a big win.

Moreover, gambling will be used for development as well as for the country, so there is no problem if it has to be taxed, but since I never use my bank account to gamble, of course the government will also find it difficult to track that, because I am more active in using crypto to gamble in the end. This means it is still considered safe from taxes, after all I haven't won any gambling lately  

[pawanjain]

I'm researching the topic on how many users actually report their winnings or losses to the tax authority, and from the current research there's a major discrepancy in the processes from country to country;

#1. Residents of the UK, Canada, and Australia don’t need to pay anything at all, as these governments view this money as the result of good fortune and do not view gambling as a profession. These earnings do not need to be reported, and nothing is owed on them.  
#2. Malta is also pretty simple. Gambling winnings are only taxed if the player is a professional gambler, though this term is not strictly defined, but if you're earning above the "grace amount" of 12950 EUR, you can apply for it.
#3. The US taxes all gambling winnings as income. In fact, there’s even a special form for documenting your gambling wings: Form W-2G. This money is counted towards your yearly income and will be taxed at whatever bracket you fall into at both the state and federal levels. You must keep track of the type of gambling, the amount of the gambling winnings, and the general ratio of the winnings to the wager, as these will all be needed for filing. Conversely, any gambling losses that occur on a real money online casino platform can be tax deductible in an amount up to your total yearly winnings. Losses and winnings must be filed separately and not as a net amount.

Source: EsportsHeadlines.com


Now I'm quite curious how other gamblers are managing this part of the story, if they manage it at all.

So, question to you, did you ever consider paying taxes on your gambling winnings, or deduct the taxes with the losses you've created? If not, what is the reasoning behind it?

I guess I am good at taxing my gambling because I make zero profits from gambling which means zero tax.
If I don't have to pay any tax why to take the burden of reporting it(although we should).
I play gambling for fun and keep playing until I lose it all over a certain period of time.
Then next deposit comes in after a cooling period and then the cycle repeats.
So I never make any net profit out of gambling.

[edmundduke]

Generally speaking i think we do not need to pay taxes on gambling here so not an issue. But its a completely different ballgame when it comes to paying taxes on trading. We need to pay taxes on every winning trade, while losses are not counted. So that messes up people a lot

[coin-investor]

I'm researching the topic on how many users actually report their winnings or losses to the tax authority, and from the current research there's a major discrepancy in the processes from country to country;

Now I'm quite curious how other gamblers are managing this part of the story, if they manage it at all.

So, question to you, did you ever consider paying taxes on your gambling winnings, or deduct the taxes with the losses you've created? If not, what is the reasoning behind it?

Just to be fair to our government I don't state my winnings and deduct my losses with so many losses I incur our government will lose from my tax so I prefer not to include my gambling activity from my paying taxes besides I'm a small player this only applies to a big-time gambler and I don't think they bother to mention winnings coming from online casinos.
They usually deduct coming from physical casinos and lottery but they don't oblige gamblers to online casinos and they are not tracking people who gamble at online casinos at this point in time.

[Yogee]

Generally speaking i think we do not need to pay taxes on gambling here so not an issue. But its a completely different ballgame when it comes to paying taxes on trading. We need to pay taxes on every winning trade, while losses are not counted. So that messes up people a lot

Trading crypto is synonymous to trading stocks and forex so I think it's only normal when gains or losses treated the same way when it comes to tax. Different states have different taxation rules but have you checked if capital losses from stocks or forex are also not deductible from capital gains?

[....]
But if they are going to say that we will have to pay taxes then why not? So I guess we are just lucky that our government even how small or big gamblers we are, we are not on any tax bracket.

It may be unwise for the Government to do so. The problem with that is it's going to reward gamblers by giving them tax incentives from their fun and leisure since most of us end up losing. Imagine if you're supposed to pay $5,000 tax but it's been cut to just $2,000 because you were allowed to deduct gambling losses.

[Wexnident]

In the PH afaik, there is a law though afaik that requires gambling winnings from a certain amount to be taxed (I'm not familiar with how much), but I don't think the government actively looking for tax traders of gambling winnings. I've never filed one in my entire life to be fair (don't report me  ), but I don't think I've ever won anything big enough that I need to pay tax for it, at least from what I know. I never really looked up the minimum amount needed for tax reports anyway.

Maybe if I win a big jackpot then I'd move my way to file my taxes for it, but for small amounts? Not worth the personal effort (unless they actively require it ofc).

[Fortify]

I'm researching the topic on how many users actually report their winnings or losses to the tax authority, and from the current research there's a major discrepancy in the processes from country to country;

#1. Residents of the UK, Canada, and Australia don’t need to pay anything at all, as these governments view this money as the result of good fortune and do not view gambling as a profession. These earnings do not need to be reported, and nothing is owed on them.  
#2. Malta is also pretty simple. Gambling winnings are only taxed if the player is a professional gambler, though this term is not strictly defined, but if you're earning above the "grace amount" of 12950 EUR, you can apply for it.
#3. The US taxes all gambling winnings as income. In fact, there’s even a special form for documenting your gambling wings: Form W-2G. This money is counted towards your yearly income and will be taxed at whatever bracket you fall into at both the state and federal levels. You must keep track of the type of gambling, the amount of the gambling winnings, and the general ratio of the winnings to the wager, as these will all be needed for filing. Conversely, any gambling losses that occur on a real money online casino platform can be tax deductible in an amount up to your total yearly winnings. Losses and winnings must be filed separately and not as a net amount.

Source: EsportsHeadlines.com


Now I'm quite curious how other gamblers are managing this part of the story, if they manage it at all.

So, question to you, did you ever consider paying taxes on your gambling winnings, or deduct the taxes with the losses you've created? If not, what is the reasoning behind it?

There are exceptions but you could generally consider most gamblers to be in the general league when it comes to their finances. It's a fun hobby and they spend a bit of leisure cash on it, winning some weeks and losing other weeks. There is only a tiny fraction of people who will need to look at their gambling winnings to the level that you are suggesting. People who might be in the esports scene, especially good sports bet gamblers and even professionals in areas like poker. I wouldn't imagine that most countries will benefit from doing anything when it comes to their gambling spend, they won't get any tax breaks because it is considered a leisure/optional activity and has even traditionally been frowned upon as a "sin" so is more likely to be penalized than anything.

[michellee]

I am not required to pay taxes on my gambling winnings because I do not gamble at offline casinos. And even though I gamble at an offline casino, no tax is charged. Even when I play online gambling, I will not be asked to pay taxes because it might be outside the government's authority, especially if the casino is not in my country.

But if I enter a government-sanctioned lottery and win, a winnings tax must be submitted to the organizer.

And even when there is a loss, the government does not collect the tax because gambling is each person's responsibility. But casino owners pay entertainment taxes and other taxes because the casino provides a gambling place for people who gamble at the casino.

There are already taxes imposed on people as income tax so the government has not collected taxes from the gambling business.