Ever wonder what percentage of your gambling activity is actually taxed? If you’re like most people, you’d assume that all of it is, but that’s not true. In this article, we’ll explore the varying percentages of taxation that casinos across the world apply to their betting, starting from the most popular games and working our way down. Just remember, this ISN’T tax advice – take it as you will. Also, keep in mind that this data is somewhat dated, as gambling has become more and more electronic in the last few years, so there may be some differences in how different countries handle taxation today vs. 10 or more years ago.
Global Tax Rates From Highest To Lowest
Let’s start our journey at the top – the highest taxed gaming activity is Grand Cayman, where the overall combined federal and local tax rate on gambling is 49.98%. Now, 49.98% is a whopping amount, but it’s not as bad as it could be, as there are no state taxes in Grand Cayman, so all of those dollars go straight to the treasury. No wonder why Grand Cayman is such a popular place for wealthy individuals and businesses to invest – they get an amazingly good return on their investment, plus all the federal and local taxes they have to pay!
Next up is the Bahamas, where the overall combined federal and local rate on gambling is 40.96%. It’s not a bad rate either, as there are no state taxes in the Bahamas either, so all that money stays in the country. The difference in these two places is quite significant – it’s only 5.02% in the Bahamas vs. 49.98% in Grand Cayman, meaning that if you place a bet in the Bahamas, you’ll only pay 5.02% in taxes vs. 20% in Grand Cayman. Not a bad deal if you’re a gambler living in the Bahamas, no?
And last but not least, we have the United Kingdom, where the overall combined federal and local rate on gambling is 28%, as of January 2021. This amount is a combination of the UK national gambling tax and the local rate in England, which is 28%. Gambling is very popular in the United Kingdom, and a lot of people assume that all of that activity is taxable, but that’s not necessarily the case. In fact, the amount of federal tax that is applicable to gambling activities in the United Kingdom is quite low. What this means is that even though they have a high rate of taxation overall, it doesn’t necessarily apply to all of the activities that people engage in there. For example, people can own a lot of slot machines and still be able to pay very low amounts of taxes on that activity. It’s also worth noting that some of the more obscure types of gambling that are available in the United Kingdom, like bingo and poker, are not subject to any taxation.
Let’s take a quick look at some of the other major rates around the world:
Australia
In Australia, the overall rate of taxation on gambling is 35%. However, the situation is a little different from the other places we’ve discussed so far. In Australia, all income earned from gambling is considered income from a non-sporting activity, and therefore is not subject to any taxes. Gambling is considered a vice, and the government heavily regulates the industry, so much so that most of the profits go back to the government. The major exception is made for social clubs and charitable gambling, which is exempt from taxation. This means that if you’re a registered member of a social club in Australia or you participate in a charitable raffle, you won’t have to pay any taxes on your gambling activity. That’s pretty well-covered, then – if you’re in Australia and you’re not involved in a social club or a charitable raffle, you’re going to have to pay taxes on all of your gambling activity.
France
France has a fairly high rate of taxation where gambling is concerned, as of January 2021. The overall rate, which is a combination of the national tax and the local tax, is 45.75%. However, there are some exemptions to this rule. For example, if you’re a professional gambler, you can get a special tax rate of 10%. If you’re a high school or university student, you can get a 15% discount on all your gambling activity. This brings the rate down to 37.5%, which is still a pretty high rate compared to other places. It’s important to keep in mind that these are all exemptions, and they don’t apply to everyone. What this means is that if you’re not in one of the exempted categories, you’ll still have to pay the standard rate of taxing on gambling.
Singapore
In Singapore, the overall rate of taxation on gambling is 33.33%. This means that regardless of whether you play at a land-based casino or an online casino, you’ll still have to pay the standard rate of 33.33%. Another important point to make is that in Singapore, all gambling activity IS taxable, including social casino games. That’s a pretty broad category, but it basically includes any game that you play for money. This includes not only land-based casinos and online casinos, but also pokies, scratch cards, and any other type of gambling that involves taking a gamble. The good thing is that you don’t need to worry about filling out any tax forms – it’s all taken care of for you. Just make sure that you report all of your winnings, as well as any losses, on your annual tax return. If you decide to play online or in a land-based casino, you’re going to have to register with the appropriate authority – be it the federal or the local government. This is going to be a matter of just filling out a couple of forms and paying the yearly registration fee. The process is straightforward and easy to follow.
New Zealand
In New Zealand, the rate of taxation on gambling is 30%. Just like Australia, all gambling activity, including that conducted online, is subject to taxation. However, the good thing is that the amount of tax you have to pay depends on how much you earn from gambling. For example, if you earn more than $100,000 a year from gambling activities, you’ll have to pay income tax at the standard rate of 30%. But if you earn less than $100,000 from gambling, you’ll only have to pay income tax at the reduced rate of 15%. The reduced rate applies to all individuals and to most businesses, including partnerships and trusts. What this means is that if you’re involved in a business that earns more than $100,000 a year from gambling activities, you’re probably going to want to consider registering that business as a trust
United States
In the United States, the overall rate of taxation on gambling is between 12% and 35%, depending on the state. When it comes to individual taxation, however, things get a little complicated. In most states, you’ll have to file a tax return regardless of how much you earn from gambling. But some states, like California and New York, have their own separate tax on gambling. It depends on whether you live in one of those states – in California, it’s zero, and in New York, it’s 12%. Regardless of whether you live in one of those two states or not, you’ll still have to file a federal tax return every year, as well as pay federal income tax on all of your gambling activity. The good thing is that when it comes to paying taxes on your gambling activity in the United States, it’s quite flexible – you can either pay the standard rate, or you can file an extension and pay the lesser rate.
As you can see, there’s a huge difference in the rate of taxation on gambling around the world. Some places, like France, have a high rate of taxation, where other places, like the United Kingdom, have a fairly low rate of taxation. The great thing is that no matter where you live, you can always find a place to play and an amount that you’re comfortable with. Just remember the tax rules and don’t break any laws – you’d be surprised how many people forget about that last part.