Taxes on Casino Winnings: How Much Should You Pay?

Since the emergence of gambling, victories have caused particular interest and even envy of people around. Over time, this moral standard was reflected in the legislation of almost every country. Even if the victory is an accident and the result of luck, the citizen is obliged to pay a percentage of the amount to the state. How much, when, and how to pay taxes on casino winnings – read below.

General Principles of Taxation

Residents (citizens), and sometimes non-citizens of the country, are obliged to pay taxes from income received in tangible or intangible form. To ignore this requirement of almost any state may cause legal consequences. In general, the following rules are applied:

  • You cannot pay the fiscal charge twice on the same win;
  • Either the citizen himself or the tax agent – the organizer of gambling must transfer the required amount to the budget;
  • Land-based casinos and officially registered lottery operators are usually tax agents. Meanwhile, the sites of online casinos for real money on the Internet – are usually not the tax agents in this regard.

To find out exactly who should pay contributions to the budget in online casinos – a player or a provider, you need to read the user agreement. It indicates whether the site that gives access to gambling activities is a tax agent or not. Usually, all the bureaucratic duties of online playgrounds are shifted to customers. The winner is obliged to independently transfer to the budget a percentage of the money received.

Taxation in different states

There is no single world rule regarding winnings. Depending on the jurisdiction, income tax is applied on a general basis, and in some countries, there is even an increased or progressive tax.

1)    Monaco

You will have to pay money to enter the casino, but prizes, according to the laws of the country, are completely exempted from income tax. ​​The main source of the country’s profit is fiscal revenues from casinos, so ordinary players can pay nothing.

2)    USA

The opposite approach is taken by the US authorities. A progressive scale of taxation operates here. At least, the state will require to pay 25% of the winnings, but depending on the amount and the federal tax rate, the percentage can reach 35-40%.

3)    Canada

State authorities made a generous gift to citizens and non-residents. Here, an individual’s income from gambling is completely tax-free. After the law was passed, many professional poker players changed their place of residence and moved from the United States to neighboring Canada.

4)    Macau

Having hit the jackpot in the “Chinese Las Vegas”, the visitor must pay 35-40% to the budget of the PRC. But large establishments can help bypass this norm. The player is invited to open an account, put his own money there, and then exchange them for chips and back. Formally, in this case, the base for taxation does not arise, and you will not have to pay the local budget.

About the author: Cory Weinberg

"Student. Subtly charming organizer. Certified music advocate. Writer. Lifelong troublemaker. Twitter lover."

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