Gambling Taxes # 1: The Status Quo
There are huge differences in the amount of taxes levied in different countries where legal gambling is practiced. In some countries, players can expect to lose up to 10% of their winnings to the tax office , while in other countries it can be anywhere from 1-3%. The type of elevation also varies greatly; In some countries, gambling taxes are levied indirectly and not directly on winnings, but are distributed across the industry through various financial engineering methods.
Adjusting payout rates is an efficient way for operators to collect taxes and not burden customers' profits. The end result is the same no matter which method is used – taxes are inevitable. All we can do as gamblers in casinos, on online gambling platforms or in sports betting is to continue to observe the global markets and select the countries to play with that offer the most favorable tax laws for gambling customers.
Gambling Taxes # 2: Top Countries for Low Profit Taxation
There is a great financial incentive for countries to maintain low taxation on gambling. The countries that are the friendliest to accept new casinos enjoy large shares of the profits indirectly. Gamblers also benefit financially.
Since the gambling winnings tax rate in the lowest taxed countries offers the best deals to gamblers, international gamblers will intentionally go to these locations for their games. Of course, sometimes the differences are not that great, and the material differences only really become noticeable when you start betting really large sums of money . Below we take a closer look at the top countries for low gambling taxes.
Of all the countries in the world that have low taxes on gambling, Russia is the most welcoming. The Russian government levies 0% on gross gaming revenues from the operators. Instead, the operators only have to pay a monthly fee, which is adjusted to the number of gaming terminals, tables and machines that they have on their premises.
This method results in a much lower tax liability for the gambling operators and casinos in Russia, and these favorable circumstances are passed on to customers in the form of much higher payout rates and better returns across the range of gambling products.
However, the laws in Russia are constantly changing and a bill was introduced in late 2018 that has the potential to shake the gambling industry in Russia quite a bit. A new flat tax will be applied to customers who make profits over $ 200, and there has even been talk of doubling the monthly fee rates to be applied to casinos – again adjusted to their size.
All of these changes are being considered by the government and their impact on foreign investment is being considered. Big plans for Vladivostok are already underway in Russia's Far East. A huge casino hub the size of Las Vegas is to be built here, which is dependent on foreign investors. These would of course be sensitive to Russia's gambling tax laws. So it remains to be seen!
Italy has a long history of gambling and its betting culture dates back to prehistoric times, when the Roman Empire was born. The citizens of ancient Rome often played games of dice and other early forms of gambling. The oldest casino in the world opened in Venice in 1638, and the country has been a welcome home for gamblers ever since.
The industry has expanded rapidly since then, offering a whole range of different gambling options, from traditional casinos to online gambling providers and sports betting. Italy is now one of the countries with the most liberal gambling laws in the world. The Italian gambling tax is one of the lowest levied in the entire legal gambling world.
Most casinos pay 0% on gross gaming revenue, and similar to Russia, they only pay based on the size of their casino offerings. Customers who play at these locations enjoy the financial benefits and there are few places in the world where players can get better value for their winnings and payout rates than in Italy.
The United States has a complicated relationship with gambling , largely because of its legal code and because individual states can set their own laws and taxes. The federal government has legalized many forms of gambling in the United States and set a low property tax rate of around 3%.
In addition, the states where gambling is legal have their own taxes, which in most countries are between 2-5%. Taking both federal and state taxes into account, players in some parts of the country can enjoy a relatively low tax on their winnings of around 5% .
While these rates seem particularly low, some states vary widely, so if you are planning a trip this is definitely an option to consider. For the lowest gambling taxes in the United States, head to either Nevada, New Jersey, or South Dakota .
Good news for Las Vegas fans: Sin City has a relatively low tax rate compared to the rest of the country. Gambling in the United States, and especially Las Vegas, comes with a slew of extra luxury extras that you won't find anywhere else in the world. Overall, the states can be considered one of the best countries in the world for your gambling.
Gambling Taxes # 3: Countries with high tax rates
While there are some places that a thrifty gambler would enjoy because of the low profit tax, there are also some countries whose high tax rates make them less attractive to gambling. The following three countries were selected because of their particularly high gross gaming income tax . Here the high tax rate also affects your net profit!
German gambling has long been fully legalized and citizens can enjoy a whole range of gambling options both in person and online. The country is packed with casinos and poker rooms, with large budgets devoted to marketing and the development of new gambling technologies across the country.
For all of these reasons, many people in Germany gamble, but unfortunately the tax laws for the industry in Germany are tough and players here usually get prices that are more below the average market price . The taxes on the gross gaming revenues can be up to 90% with some casino operators. In reality it is much lower. Nevertheless, the high tax rate ensures that the winnings of the casinos are reduced to a very fine margin.
All of this extra burden is passed on to the customers who have to pay a percentage of their profit in taxes. Most online sports betting sites in Germany show the gross profit on the betting slips . In order to calculate the net profit, you can usually deduct at least 5% from this total amount for every bet.
The United Kingdom is perhaps the most intimate gambling country in the world. The British have a very liberal approach to the gambling industry . Even the great Winston Churchill loved to gamble and would often play cards late into the night while planning his war strategies with his top generals. Incidentally, one of his favorite games was an old Württemberg card game. The market is pretty saturated with new operators, but the government continues to collect enormous taxes from them.
UK based gambling operators can pay up to 50% on gross gaming revenue , but in reality this rate is much lower. Home to some of the largest and richest gambling operators in the world, UK gamblers have excellent choices when it comes to online casinos and sports betting. This huge abundance of online gambling options usually makes it possible to find top value.
Asia has several gambling hotspots, but none of them are as popular as the high roller mecca in Macau. The coastal city, which basically operates with economic freedom, is the only legal place to gamble in China. The Chinese government was only willing to make this concession if it was amply rewarded for it, and in fact the Macau gaming industry generates enormous tax revenues for the Chinese state .
The extremely lucrative business is taxed at up to 39% on gross gaming revenues. With massive revenues, Macau is one of the richest and most capital-heavy gambling industries in the world. Most gamblers are willing to compromise when it comes to Macau: although they get less income, they can get a luxury stay in Macau that includes glitz and glamor in return.
Gambling Taxes # 4: High Or Low?
The question of whether to go high or low is difficult to answer for most countries when shaping their tax laws. In order to attract foreign investment and drive growth, it is better to start with low taxes and, once a well-functioning gambling industry is established, gradually increase the tax rate levied . This approach is used around the world and ensures that governments can enjoy huge revenues straight out of gamblers' pockets.