What Are Sports Betting Gains Taxed at?

Sports betting is one of the most exciting and entertaining experiences that you can have as a fan of a particular sport, team or organisation. The chance to make a wager on the outcome of a sporting event is appealing, but there are also various ways that the government taxes you on your wagers. Here, we’ll discuss what are the main taxes that you need to be aware of when making wagers on sports events.

Tax on Wagers Made in Britain

If you’re reading this article, it’s likely that you’re located in the UK and making wagers on sporting events. The government in London imposes a tax on sports bets that you make within the UK, in addition to any other tax that you may have to pay. The UK government website states:

“The government collects a separate tax on wins and losses from wagering activity. This is called the ‘betting tax’ and is based on your winnings. The rate for this tax is set by the government. It currently stands at 20p per £1 wager.”

Keep in mind that this is a special rate for sports betting, not regular wagering activity. If you’re located in the UK and making wagers on regular things like baseball or football, then you’ll be subject to the standard rate of income tax as set by the government.”

GST On Wagers Made In Continent

In the same manner as the UK government, the French tax authorities also impose a tax on sports bets that you make in France. However, the rate is much lower at just 2%, as stated on the French government’s website:

“The [French] IRS also taxes wagers. However, the rate is 5% rather than 20p per £1 win as in the U.K.”

Consequently, if you’re located in France and make wagers on sporting events, you’ll only need to pay €200 ($260) per year in taxes rather than the £240 ($310) band that applies to UK bettors. Not bad considering that you’re dealing with the French government, eh?

IGST On Wagers From Overseas

The International Gaming and Sports Tax (IGST) is a tax that all wagering jurisdictions must adhere to. It was originally designed to tax the “winnings” of sports gamblers, with a base rate of 15% plus 10% on any winnings over £100. Like the other two taxes discussed above, this is a tax on your winnings, so if you win €100 on a €20 wager, you’ll need to pay €25 in IGST. However, there’s a good news for international sports bettors – the IGST base rate for 2018 is now 10%, which is the same rate as the UK betting tax. The bad news is that the minimum taxable amount has also increased significantly, jumping from £200 to £420. Fortunately, there are ways around this. If you’re located in a country that imposes an IGST rate of 15%, then you can avoid the additional 5% by submitting your wagers via a payment service provider. This way, the provider will handle the calculations and tax payments for you. Keep in mind though that this only applies to foreign wagers, not UK bets. The more you wager, the more you’ll need to pay in tax, as the law considers you to be’resident’ in the country that you wager in.

Pay Only The Amount You Need To Pay

One of the simplest ways to avoid taxes on sports bets is to pay only what you need to pay. It’s simple, if you win, you pay the tax. If you lose, you don’t. No big deal. This can be a little hard to do if you’re an amateur or a small-time bettor who doesn’t regularly win big sums of money. In that case, it can be a good idea to set up a separate account just for your wagers at a bookmaker that specializes in low-taxed sports. That way, you won’t have to worry about getting your money back if you lose. Plus, you can use that account for other wagers as well that you might make in the future.

Tip For Better Tax Flexibility

If you’re looking for ways to get around paying taxes on your sports wagers, then there’s always the option of trying your hand at gambling rather than betting. The less you know about the various taxes that you may be liable for, the easier it will be to get away with not paying them. Sure, there’s the element of chance when it comes to gambling, but it’s a skill that you’re using rather than just relying on luck. In many ways, becoming a professional gambler can be seen as a better option than just betting, considering that you can setup various gambling accounts to hide your wagers from the tax man. Additionally, you can use gambling to fund your sports betting budget, as there’s no government limit on how much you can wager on sports. Finally, if you’re ever caught out and the tax man asks what you were doing with all that money, you can always point to your gambling account and say “This is all from betting”. Most people would assume that you’re a gambler anyway, so it’s not like they’re going to question your story.

Hopefully, this article has helped you understand some of the taxes that you may be liable for when betting on sports. Remember that there’s always alternative ways to avoid paying taxes on your wagers, so don’t get too discouraged if you end up with a tax bill at the end. Just know that not all is lost, as there are ways to pay as little as possible while still following the rules. Setting up a separate account for your betting at a tax-friendly bookmaker is one good option. Alternatively, you could try your hand at gambling rather than betting – it’s certainly a way of earning some extra cash. Last but not least, remember to tip your waiter or waitress if they do a good job – it’s the polite thing to do. And for those of you reading this in France, don’t forget to pay some attention to our lovely French cousins across the pond – they may try to scam or trick you into paying more in taxes than you actually owe. So, be careful out there, folks – maybe put a bit of sunscreen on before you leave the house this summer – and good luck out there on the tennis courts, the golf course or the stock market.