Global Gambling Tax Rates

The world of online gambling is home to countless rules and regulations that change significantly across different locations. While some countries offer a wide variety of betting markets, casinos, and online betting facilities, others completely prohibit gambling.

As a highly profitable industry, the taxation of gambling revenue from operators can add considerable sums to national budgets. In some cases, bettors may also have to declare their winnings when completing tax returns.

This article will explore the different tax rates that are in place in some of the world’s most popular gambling regions.

U.S.A

The legality of betting in the U.S. is determined by individual states with some like Utah and Hawaii completely outlawing all betting activities, and others operating a more open policy.

At present, only six U.S. states allow online casino betting, Delaware, Connecticut, New Jersey, West Virginia, Michigan, and Pennsylvania. Betting expert Sergio Zammit explains that since Pennsylvania passed legislation to legalize online casinos, 16 platforms have been made available by operators. (Source:https://www.sportstalkphilly.com/pa/casinos/new)

Gambling winnings are taxable in the state of Pennsylvania with a federal gambling tax rate of 24% and income tax rate of 3.07%. These taxes are applied on different thresholds for different betting markets.

The American online betting market has an estimated value of over $9.5 billion, and states are benefiting from licensing fees and taxes.

Some states that operate online and retail betting tax both at the same rate like Maryland and Nevada who operate with 15% and 6.75% tax rates respectively.

Other states choose to impose different levies on online and retail betting, with many using a higher tax rate on online betting as a way to push through legislation. New York operates a 10% retail betting tax in comparison with its 51% tax rate on online sports betting.

The 51% tax rate is the highest in the U.S. and is also in place in New Hampshire and Rhode Island which also charge 51% on retail betting operations.

UK

The UK has a long and proud betting tradition and its betting industry has recently exceeded £15 billion. The UK does not tax winnings, however, operators do face levies. Previously, bettors could pay a 9% tax when placing bets or have 9% taken from their winnings.

An example of this would be a bettor paying £1.09 for a £1 bet where they would receive £11 back in a 10/1 shot. Alternatively, they could pay £1 for the bet but they would only receive £10.10 back. (Both of these examples include the return of the £1 stake.)

Retail betting tax in the UK changed in 2001 to 15% of the total stakes taken minus winnings. Online gambling in the UK is subject to a higher tax rate of 21%.

Other Countries that Don’t Tax Bettors

Rather than taxing players on their winnings, many countries impose levies on operators that include taxes and license fees.

Austrian tax rates vary from 35% to 85% for all retail and online casinos. Similarly, Bulgarian betting operators pay set tax rates for different markets and must also pay €17,500 for each license.

Maltese casino licenses cost operators €46,000 with additional taxation on gross turnover varying between 15% and 40%.

Countries with the Highest Tax Rates

French betting operators face the highest tax rates with land-based casinos facing charges of up to 83.5% and online poker sites paying 40.8% tax rates. Germany has similar tax rates of up to 80% for retail casinos and a 16% gross gaming revenue tax rate on gaming operations.

Denmarks online casinos face 20% GGR tax rates compared with 45% to 75% rates imposed on land-based casinos.

Countries with the Lowest Tax Rates

It is not all bad news for betting operators, with those in Russia working completely tax-free. Of course, this is the exception to the rule. However, there are some highly competitive rates that can make setting up operations an excellent prospect.

Singapore operates with typical betting tax rates of 5%, but this can be as high as 15% for retail casinos. Finland and Belgium are also great examples of countries that don’t impose huge taxes on betting operators, with tax rates of 10% and 11% respectively.