How Much Taxes Do I Pay on Sports Betting?

In a bid to curb their country’s growing reliance on gambling, the Maltese government has decided to levy a special tax on sports betting. The amount of tax is set at 10%, but it’s only paid by high-ranking officials and people who make a living from sports betting, apparently. Since the new tax law was passed in September 2019, the Malta Gaming Authority (MGA) has taken the rare step of publishing the current tax rates for all industries.

Tax Rates For All Industries

While the government’s main motivation for imposing the special tax on sports betting is to raise much-needed funds to support a soccer-specific hospital, there’s also the issue of reputation to consider. The fact that many people in positions of power and authority are betting on sports – usually big-name football matches – gives the entire island nation a black eye.

The tax applies to all sorts of sporting events including football, rugby, tennis and horse racing, as well as greyhound and dog racing. The only events that aren’t subject to the tax are competitions involving animals, such as hunting and fishing. The tax is calculated on the total amount of winnings rather than the individual wagers made on sporting events.

Malta is the smallest of the three major European islands, spanning 4.9km of coastline. It currently has a population of around 413,000, which amounts to roughly 8.6 people per square kilometre. The island’s geography is rather uneventful, consisting of rocky hills, sandy beaches and deep sea inlets. Although the economy of the island heavily relies on tourism and retirement, there isn’t much in the way of exciting futurism or modern architecture to keep the young population interested in Malta.

Why Are The Maltese Taxing Sports Betting?

The island nation of Malta has long been looked upon as one of the most alluring destinations for people who want to indulge in some high-stakes gambling. Even prior to the financial collapse in 2008, the Maltese government had implemented several fiscal policies aimed at attracting high-rollers to their shores. One of the most significant changes to the tax code was the introduction of the national debt tax in 2015.

The rate for this tax is 24% and it’s levied on any individual or company that enjoys a fiscal income above a certain threshold (€26,000 annually for individuals; €72,000 for companies). At the MGA, we can now add national debt tax to the long list of special taxes that apply to sports betting in Malta.

Key Takeaway

What will the Maltese government do with all of that cash? Well, they’ve earmarked the money for a variety of soccer-related projects, including a nascent soccer-specific hospital that will be supported by the new tax revenues. The government also plans to invest the funds in national infrastructure projects (roads, schools, etc) which will benefit everyone, not just people who enjoy gambling.

But the fact remains that the Maltese government is taxing a pastime that many people look forward to enjoying in their free time, as it gives them a break from their busy workdays. This also means that the tax code regarding sports betting will likely become more complicated as more stakeholders enter the equation.