Why paying tax on gambling winnings when government doesn't regulate Gambling?

[Dewi Aries]

What I want to say is that reality is not as ideal as the law is enforced. The authorities impose taxes on gambling companies to allow them to operate and grant them licenses, which is a logical equation. In return, they require them to provide them with data on the financial activity of their citizens upon request so that they can track what they are doing. Of course, the reason for this is not primarily to protect users, since the authorities will rarely be able to intervene if a problem arises between the casino and the user, but to track their financial activities and impose taxes accordingly. In this case, citizens will always try to find any way to evade these taxes, including using unlicensed platforms or transferring assets through black market transfers.

You are right about what happen to the reality because we can see that many government officers imposing the casino and other business but they use the money for their own without think about how their country can develop better with that tax. And if the government can be at citizens side, they will trying to help their citizens once they have a problem with the bad casino. But yes, in this matters government is not intervene the problem when its arises between the casino and the user and let the user search for their own way to solve the problem. That makes citizens don't want to pay tax because they thinks that the money will be used by the corrupt government officers so they will hide their money and just report what happens to them.

Yes, that is the most appropriate reason why the majority of gamblers do not obey the tax regulations set by the government, on the other hand I understand that even if the government is wise in this matter in the sense that it is willing and able to overcome every problem that gamblers have with casinos, there will definitely always be some gamblers who do not obey the rules which most likely will be done by gamblers who are really chasing victory and do not want part of their winnings to be given to anyone for anything, or it could be as you said due to thoughts and concerns that the tax money is not entirely for the benefit of the state but rather to be used as a place for officials to commit corruption.

Back to the initial discussion that everything should look balanced, in the sense of mutual benefit in terms of money and also mutual benefit in terms of security and comfort for gamblers in carrying out their gambling habits.

[Ultegra134]

You are right about what happen to the reality because we can see that many government officers imposing the casino and other business but they use the money for their own without think about how their country can develop better with that tax. And if the government can be at citizens side, they will trying to help their citizens once they have a problem with the bad casino. But yes, in this matters government is not intervene the problem when its arises between the casino and the user and let the user search for their own way to solve the problem. That makes citizens don't want to pay tax because they thinks that the money will be used by the corrupt government officers so they will hide their money and just report what happens to them.

I'm sorry, but are you implying that the government should assist citizens having issues with casinos? This is completely unreasonable, not only due to the casinos being registered in tax paradises such as Curacao or Cayman Islands (even those that are regulated and have tax deducted from your earnings isn't based in your country of residence), but mostly because it's an unreasonable and unfeasible request. What are you expecting—the government to intervene with the random casino that isn't approving your withdrawal?

Taxes are necessary for the country; however, I'm not keen on losing a reasonable cut of my earnings in a country where our tax money isn't being put into actual use.

[Russlenat]

The state will be interested in working with legal gambling providers, as this will in the long term give more taxes and more control in the industry, but it is more profitable to fight and liquidate the semi-legal ones, as this can damage the reputation of the former. At first, there is always an imbalance when the state gets involved in controlling an industry that is new to it.

The issue with unlicensed casinos is that once the government starts enforcing strict laws, these casinos usually won’t comply. They know they'd have to pay penalties first for operating without a license before even starting the legit licensing process. Given the strict requirements they’d need to meet, it’s often not worth it, especially for smaller casinos. Many of them just opt for licenses from lenient providers that don’t enforce effective regulation, which doesn’t really help them when stricter oversight step in.

[Kavelj22]

What I want to say is that reality is not as ideal as the law is enforced. The authorities impose taxes on gambling companies to allow them to operate and grant them licenses, which is a logical equation. In return, they require them to provide them with data on the financial activity of their citizens upon request so that they can track what they are doing. Of course, the reason for this is not primarily to protect users, since the authorities will rarely be able to intervene if a problem arises between the casino and the user, but to track their financial activities and impose taxes accordingly. In this case, citizens will always try to find any way to evade these taxes, including using unlicensed platforms or transferring assets through black market transfers.

You are right about what happen to the reality because we can see that many government officers imposing the casino and other business but they use the money for their own without think about how their country can develop better with that tax. And if the government can be at citizens side, they will trying to help their citizens once they have a problem with the bad casino. But yes, in this matters government is not intervene the problem when its arises between the casino and the user and let the user search for their own way to solve the problem. That makes citizens don't want to pay tax because they thinks that the money will be used by the corrupt government officers so they will hide their money and just report what happens to them.

In your answers you always link taxes on gamblers' winnings to the development of the country. Theoretically this is true. But we should not forget the responsibility of the state authorities to protect citizens if a problem occurs with a licensed gambling platform. I mentioned in my previous comment that the authorities have legal powers to impose taxes on all financial activities of citizens and this is considered legitimate. But citizens know that these taxes are deducted without the authorities providing them with protection and support for the safe use of these platforms. I cannot remember exactly, but I do not remember that the authorities of any country (except for a few countries) have intervened to protect their citizens against scam schemes with any platform, including licensed ones.

[Su-asa]

It's simply a means of extortion, the government has been doing this in so many ways. There's absolutely no reason why the government should demand for taxes in gambling winnings because they have no business with it, just like you said they don't regulate it. If they can at least try to monitor the age limit and try to make sure that no one under the age of 18 is actively involved in it then paying taxes might be worth putting into consideration. This is something they can't demand for, there are other sectors of businesses that they get taxes from and the citizens have no idea on what they are using all the money for.

[taufik123]

Yes, if the casino is operating without a license in that country, nothing can be done when the player is scammed or fall victim of frozen account but if it's a licensed casino, there's always a way to report but I think it can be a bit expensive. That's why I am as saying that if the government can just appoint some individuals that can easily handle these kind situation without a serious charge.

Yes, there will be additional fees that need to be paid to handle such cases.
But if the player is only deceived with a small amount then there is nothing to do, but if many people feel deceived then it is necessary to do.

The government also has an obligation to eradicate these illegal casinos that harm many people as well as they do not pay taxes to the government by making their servers hidden in other countries that legalize gambling.

Even illegal online casinos like this have become a polemic that has never been finished in my country,
because there are several individuals who protect with great rewards.

[GxSTxV]

Honestly, this new tax policy just feels unfair to me for many reasons . They are going to take a cut from both the winnings and the betting houses, but when there’s an issue for example like a casino refusing to pay out a big win then suddenly the government wants no part of it for no reason. They will say that the casino isn’t licensed here or that we cannot handle those cases. So they are cool to collect the money but won’t lift a finger to protect gamblers when things go wrong.
If they want to take a percentage of the winnings let’s say it’s fine, but at least offer some protection in return. The whole system just feels like it's set up to make gains for them, with no real concern for the people who are actually putting money down.

However, As a gambler in a place where gambling isnot regulated well, I have never anything to think much about taxes on my winnings. Here, it's more about finding a reliable betting online crypto casino that pays out without issues or complicates the KYC process. I’ve always been used to just playing, winning or losing, and not dealing with any tax cuts on my winnings. It’s been direct , no one to answer to, no forms to fill out.

But now, seeing other countries taxing both the casinos and the players, it makes me think about how things might change. The idea of paying taxes on every win sounds discouraging, especially when there is no guarantee of protection if the casino decide to not pay players.

[ethereumhunter]

Yes, that is the most appropriate reason why the majority of gamblers do not obey the tax regulations set by the government, on the other hand I understand that even if the government is wise in this matter in the sense that it is willing and able to overcome every problem that gamblers have with casinos, there will definitely always be some gamblers who do not obey the rules which most likely will be done by gamblers who are really chasing victory and do not want part of their winnings to be given to anyone for anything, or it could be as you said due to thoughts and concerns that the tax money is not entirely for the benefit of the state but rather to be used as a place for officials to commit corruption.

Back to the initial discussion that everything should look balanced, in the sense of mutual benefit in terms of money and also mutual benefit in terms of security and comfort for gamblers in carrying out their gambling habits.

That is normal if some citizens doing that thing because they thinks that is their money that they can win from gambling so they  can enjoy that money without reporting to the government. Maybe it needs explanation to that people so they will understand that the taxes is for developing their country better than before.

If there taxes that needed to be paid, we can follow the rules to avoids any problem. But the government must realize that some of their citizens needs their help to solve their problem so the citizens will not thinks negatively to their government.

I'm sorry, but are you implying that the government should assist citizens having issues with casinos? This is completely unreasonable, not only due to the casinos being registered in tax paradises such as Curacao or Cayman Islands (even those that are regulated and have tax deducted from your earnings isn't based in your country of residence), but mostly because it's an unreasonable and unfeasible request. What are you expecting—the government to intervene with the random casino that isn't approving your withdrawal?

Taxes are necessary for the country; however, I'm not keen on losing a reasonable cut of my earnings in a country where our tax money isn't being put into actual use.

If they can make agreement with the casino regulator, that can be done but that will depends on how good the government to helps their gamblers. The government with the regulator can investigates the case and will know what is the real problem. But we know that the government won't be bothers to do that and only wait for the taxes comes from people.

We as a gambler and citizens can only follow the regulation. If the country needs us to pay the tax, we can pay it especially if we win. But if we lose, we can explains the real situation and conditions.

In your answers you always link taxes on gamblers' winnings to the development of the country. Theoretically this is true. But we should not forget the responsibility of the state authorities to protect citizens if a problem occurs with a licensed gambling platform. I mentioned in my previous comment that the authorities have legal powers to impose taxes on all financial activities of citizens and this is considered legitimate. But citizens know that these taxes are deducted without the authorities providing them with protection and support for the safe use of these platforms. I cannot remember exactly, but I do not remember that the authorities of any country (except for a few countries) have intervened to protect their citizens against scam schemes with any platform, including licensed ones.

Speaking about the responsibility of the state authorities to protect citizen maybe will not be the same between country that allows and prohibit gambling. Even if the country allow gambling, that doesn't mean they will protect and help their citizens to solve the problem. That will be worst if the country have so many corrupt people who only care with the money from tax that they can use. I can not remember either but I think if they cares with their citizens, they will help to solve it. Maybe in the future, we will see the government publish the news about they helps their citizens to protect and solve the problem from the scam casinos but that will needs work together from many parties and not from the government and the regulator.

[Sanitough]

But now, seeing other countries taxing both the casinos and the players, it makes me think about how things might change. The idea of paying taxes on every win sounds discouraging, especially when there is no guarantee of protection if the casino decide to not pay players.

When a government is very aggressive about taxing casinos and the winnings from gamblers, it’s expected that they will also regulate the gambling industry strictly. Your point about there being no guarantee of protection from regulators isn’t entirely accurate. The reality is that many gamblers with problems at casinos often don’t pursue legal action because it can be costly and a waste of time for them. For regulators to take action, there needs to be a complaint against a specific casino. If we stay silent about issues, they won’t be aware of them.

[Kavelj22]

In your answers you always link taxes on gamblers' winnings to the development of the country. Theoretically this is true. But we should not forget the responsibility of the state authorities to protect citizens if a problem occurs with a licensed gambling platform. I mentioned in my previous comment that the authorities have legal powers to impose taxes on all financial activities of citizens and this is considered legitimate. But citizens know that these taxes are deducted without the authorities providing them with protection and support for the safe use of these platforms. I cannot remember exactly, but I do not remember that the authorities of any country (except for a few countries) have intervened to protect their citizens against scam schemes with any platform, including licensed ones.

Speaking about the responsibility of the state authorities to protect citizen maybe will not be the same between country that allows and prohibit gambling. Even if the country allow gambling, that doesn't mean they will protect and help their citizens to solve the problem. That will be worst if the country have so many corrupt people who only care with the money from tax that they can use. I can not remember either but I think if they cares with their citizens, they will help to solve it. Maybe in the future, we will see the government publish the news about they helps their citizens to protect and solve the problem from the scam casinos but that will needs work together from many parties and not from the government and the regulator.

It is not necessarily because of corruption in the state, but because the state does not have the tools to do so. The judicial system is backward and unable to intervene to protect citizens, especially with crypto-based casinos when crypto is not recognized by the authorities. The authorities impose taxes on citizens on the basis that they obtained their money from gambling and do not care about the type of gambling. This factor encourages gamblers to avoid declaring their income and even trying to manipulate the system. Most of them sell their balances for cash on the black market, peer to peer. In my country, for example, the authorities impose a 25% tax on all income from gambling and entertainment competitions, but I do not remember them ever intervening to help any of their citizens who were victims of scam schemes.

[Fortify]

Recently many countries around the world are now introducing gambling taxation on it citizens and even charging betting houses and casino's some amount of money to operate within it jurisdiction, and recently my country just introduced a 5% Revenue sharing and taking from both betting houses and gambler's winning and this news make me to ask why the government takes such money from gambler's but won't protect the gambler when their is troubles with the betting house.


Because we have loads of cases where gambler's win some huge amount of money and the casino refusing to pay and when reported to the authority you here such things like the casino is not licenced by them or they don't have control over the casino case, the government is only interested in the tax and not protecting the interest of it citizens.

Leaving aside the fact that you are wrong - gambling is a heavily regulated industry in most countries, it is also not true that every country taxes gambling winnings. If you look at the UK for example, any winnings you might get there will not be taxed at all. They tax the gambling companies and that is where the government takes it's cut, which seems like the fairest way to do it really. It is rather crazy that you only get to take a portion of your winnings in somewhere like America because the state and federal government stick their claws in. Be careful about making sweeping generalizations because there are plenty of countries out there which strike a much better balance than you might find in your local jurisdiction.

[Ultegra134]

If they can make agreement with the casino regulator, that can be done but that will depends on how good the government to helps their gamblers. The government with the regulator can investigates the case and will know what is the real problem. But we know that the government won't be bothers to do that and only wait for the taxes comes from people.

We as a gambler and citizens can only follow the regulation. If the country needs us to pay the tax, we can pay it especially if we win. But if we lose, we can explains the real situation and conditions.

I don't find it necessary, how is it the government's job to assist you dealing with a casino based in the other side of the world? On top of that, we've seen many cases of gamblers abusing bonuses, loopholes and the TOS only to be stopped during the withdrawal process because the system has flagged them as suspicious activity. Imagine each one of them complaining that they've been scammed, when in reality, it's the other way around.

Gambling taxation usually occurs during the withdrawal process, the system automatically deducts a percentage of your earnings, you're not taxed if you don't withdraw, or if you ultimately lose your balance.

[Botnake]

I don't find it necessary, how is it the government's job to assist you dealing with a casino based in the other side of the world? On top of that, we've seen many cases of gamblers abusing bonuses, loopholes and the TOS only to be stopped during the withdrawal process because the system has flagged them as suspicious activity. Imagine each one of them complaining that they've been scammed, when in reality, it's the other way around.

Casinos feel secure in their operations when they have proof to back up their actions. No government will go after a casino just for enforcing its terms of service, as long as they follow the country’s regulations. The government has more on its plate than just casinos, so it wouldn’t make sense to spend too much time on this issue when there are easier ways to regulate them effectively.

You’re right, there are plenty of people out there who abuse the system. They throw around scam accusations but often can’t provide solid evidence when asked. We see this happening in our own forum too.

Gambling taxation usually occurs during the withdrawal process, the system automatically deducts a percentage of your earnings, you're not taxed if you don't withdraw, or if you ultimately lose your balance.

Not every win gets charged with withholding tax; there’s a ceiling for that....

For smaller wins. It’s the gambler’s job to report those to the tax agency, like the IRS in the U.S.

[tread93]

Recently many countries around the world are now introducing gambling taxation on it citizens and even charging betting houses and casino's some amount of money to operate within it jurisdiction, and recently my country just introduced a 5% Revenue sharing and taking from both betting houses and gambler's winning and this news make me to ask why the government takes such money from gambler's but won't protect the gambler when their is troubles with the betting house.


Because we have loads of cases where gambler's win some huge amount of money and the casino refusing to pay and when reported to the authority you here such things like the casino is not licenced by them or they don't have control over the casino case, the government is only interested in the tax and not protecting the interest of it citizens.

In the US gambling is highly regulated especially the lottery. In the lottery it’s something like 40-50% or more which is nuts but it’s true. The good thing is if you win you’re still getting a crap ton of money regardless lol. Gambling tax together as a phrase doesn’t sound good at all haha

[Ultegra134]

Casinos feel secure in their operations when they have proof to back up their actions. No government will go after a casino just for enforcing its terms of service, as long as they follow the country’s regulations. The government has more on its plate than just casinos, so it wouldn’t make sense to spend too much time on this issue when there are easier ways to regulate them effectively.

You’re right, there are plenty of people out there who abuse the system. They throw around scam accusations but often can’t provide solid evidence when asked. We see this happening in our own forum too.

It would be unreasonable to even think about it, and wouldn't be possible if the casinos were even based on our country of residence. Imagine how many reports they'd receive if this hypothetical scenario were true. This is never going to happen, and it's actually in the best interest of both parties.

Not every win gets charged with withholding tax; there’s a ceiling for that....

For smaller wins. It’s the gambler’s job to report those to the tax agency, like the IRS in the U.S.

That's true, but perhaps it varies from country to country of residence. Here in Greece, you're automatically taxed, provided that you use regulated casinos and not cryptocurrency ones, from any amount of €100 to €500 with 15%, and from €500 and upwards, 20%.