Do I Have to Pay Tax on My Online Gambling Win?

Published October 18, 2012 by OCR Editor

Do I Have to Pay Tax on My Online Gambling Win?

Will the tax man come looking for your jackpot?

In short, probably not - if your place of residency is in the UK or mainland Europe. In the United States, offline gambling winnings are taxed (wins on the lottery, from sports bets, and in land-based casinos). Online gambling is still illegal in most of the United States; therefore the issue of tax on online gambling winnings in the USA is not relevant.

Know the Law

A little disclaimer before we continue. Any information we provide is intended as a guide to help you search for further, official regulations. The ONLY way to know which - if any - tax rules apply to your online gambling winnings is to check with the relevant authorities in your country. In the UK, for example, this would be HM Revenue & Customs.

Obey the Law

Furthermore, once you've clarified the law for yourself - follow it. It's understandably annoying to have to part with some of a large jackpot, but if that's the law, do it! You might lose even more if the tax man catches up with you later.

Tax on Lottery Wins

Several countries in Europe do tax lottery wins. Presumably, even if you've bought your lottery tickets online, you're still going to have to pay that tax. In many cases, however, that money would be deducted even before the win was transferred to your bank account. But, as we said above - check! National lotteries provide support for winners. If your lucky numbers come up, they'll be able to advise you.

Is Online Gambling a Trade?

Going back to the example of the UK: there, someone who scores a lucky online gambling win, small or large, generally isn't expected to pay tax on it. This is because online gambling is not considered a trade or a business. Most online gamblers have day jobs, after all. But - there is a possibility that professional gamblers might have to pay some tax. Once again, the only way to know for certain is to ask the tax authorities where you live.

Mentioned in this article

See also

Australia Exploring Online Gambling Point of Consumption Tax

Irish Online Gambling Tax Worth €25m Annually

Isle of Man & UK Agree on Automatic Sharing of Tax Information

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