Taxing gambling winnings has always been a debated area. On the one hand, all earnings are taxed, so why not money earned from pokies? On the flip side, players generally lose more than they win, and since a gambling tax return is not provided – how would authorities justify only taxing players when they have a lucky break?
Despite the nuisance going into this area, many countries have taken a strict approach – taxing winnings of gamblers at progressive rates, often starting at 15 – 20%. Americans are subject to heavy taxation, starting from winnings over $600 every year. But what about Australia?
The Australian Taxation Office (ATO) has made it clear that gambling taxes apply only to businesses and professional gamblers. Casual players who had a big win on pokies, poker, blackjack, roulette, and other casino games are not subject to tax.
Understanding more about this topic is essential since things could change at any moment. The Australian gambling industry is huge, with $24 billion in gambling losses annually and over 80% of the adult population gambling. As such, the Government could easily alter its approach to change the Australian gambling landscape and take a cut of the money invested in the industry.
Due to the lack of clear guidelines and informational blogs on this topic, our team here at Pokies.bet researched the gambling tax laws in Australia to provide you with insights on several areas, including:
- Are players’ gambling winnings taxable?
- In which territories do players need to pay taxes on gambling winnings?
- What tax rate applies to gambling tax earnings?
- Can you get a tax return on gambling losses?
- Who needs to pay taxes on their gambling winnings?
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Do gamblers pay taxes in Australia?
Simply put, no, Australian casino players do not need to pay taxes for their winnings. It doesn’t matter how much you win or lose, if you are a typical player and have a lucky break – all winnings are yours to keep.
The ATO only taxes assessable income, and gambling winnings are not classed as such. Exceptions to this rule of course apply, as in the case of professional gamblers, which we discuss later below.
The Australian taxation authority states that Australian gamblers can exclude all casino and betting wins from their income. Professional players and gambling operators are subjected to taxation, though.
What About Returns on Gambling Losses?
Like ATO doesn’t impose taxation on your gambling winnings, it won’t reimburse you for your losses. That makes sense, and in this case, is quite sensible.
Nonetheless, countries that impose taxes on gambling winnings do not allow for returns on gambling losses, which is flat-out unfair!
Professional Gambling Winnings Tax
The more peculiar exception to the tax-free gambling winnings rules described above is professional gamblers. If you are playing casino games often, and win more often than not, you should know what constitutes a professional player.
According to the ATO, and taxation ruling IT 2655 on income tax, a professional gambler is a person who:
- Gambles in a business-like manner.
- Possesses specialist knowledge related to the gambling industry.
- Gambles on a huge scale, similar to a business operation.
More often than not, poker players can be classified as professional players and have to pay taxes on their winnings. Other examples could be when someone was a coach of a professional team or worked as a bookie.
You can contact ATO or the respective authority for your state to ensure you are not classed as such before filing for taxes. At least if you could potentially be classified within the above categories.
Potential Issues
The average Australian gambler doesn’t have to worry about taxation for gambling online. Players who are betting professionally shouldn’t disregard the current laws, though, since they could face legal troubles at any time.
Not long ago, the ATO established a specialized department that reviewed casino files to identify players who are winning consistently. Such players often received ‘Amended Tax Notices,’ which indicated the amount they should pay within a short time frame for gambling tax evasion within their past activities.
If you happen to be the recipient of such a notice, the situation could look dire. Since the scandals of Crown Casino, ATO, and the Australian Government are closely looking into gambling matters to ensure no more problems arise. Be cautious!
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Online pokies and casino games account for a huge part of gambling winnings in Australia. In fact, most Australians gamble at online casinos these days. The good news is that since online casinos are based offshore, their income and any paid player winnings are not taxed. That’s because the ATO only taxes wagering and betting entities.
Under Commonwealth law, gambling from home in Australia is illegal – and operators that offer these services cannot be considered legal entities. That means more income for them, and the potential for higher returns for you.
In contrast, Australian states that allow online sports betting sites and betting exchanges that are based offshore but are regulated in Australia do impose fees on operators. Still, players who win on legal Australian betting platforms are not subject to any taxes.
Gambling Tax Regulations Across Australian Territories
Gambling and common laws vary per Australian territory, but that’s not the case when it comes to gambling taxation. Thankfully, the current bill that makes gambling winnings tax-free is a federal law, overruling local state laws.
Nonetheless, you can learn more about gambling in each territory from the below links; we have also attached links to the authorities responsible for regulating gambling tax winnings in each state. If you are a professional gambler, gambling entity, or the laws surrounding gamblers change – you can learn more about the regulations applicable to your location from the following:
- Queensland Online Gambling – QLD Gambling Tax
- New South Wales Online Gambling – NSW Gambling Tax
- Tasmania Online Gambling – Tasmania Gambling Tax
- Western Australia Online Gambling – Western Australia Gambling Tax
- Victoria Online Gambling – Victoria Gambling Tax
- South Australia Online Gambling – South Australia Gambling Tax
As a general rule, you can remember the following:
- Players are not taxed for gambling winnings in any Australian state.
- The standard betting operator tax rate is 15%, but it can vary for lottery, fixed odds, and totalizator.
- Players cannot file tax returns on gambling losses.
- Offshore casinos offering pokies and interactive games are not subject to taxation.
Gambling Tax Advice
Our team always strives to provide up-to-date and accurate information on any topic we cover. Gambling is spot on our strong suit, but taxation is not so much. We have done our best to gather official data and information to help you understand whether your winnings from gambling are taxable, but we urge you to seek professional advice if you think that you fall under one of the categories that should be paying taxes on gambling activities. Professional players are the most stand-out example.
In such instances, we recommend contacting the gambling authority in your state, a lawyer versed in gambling laws, an accountant, or the ATO. They could clarify any matters that we might have failed to address here.
Australia’s Gambling Tax Calculator
For now, you don’t need to calculate your taxes since Australian gambling laws do not impose any fees on player winnings.
If this changes, we will incorporate a plugin that will let you input your age, annual income, gambling winnings, gambling losses, and state – to receive the total amount you will need to pay based on your situation.
Summary
This article should be great news for any player concerned about getting taxed for their gambling winnings. Thankfully, the ATO is yet to extend its reach to gamblers’ winnings. Still, operators and professional players should stick to the current guidelines and follow taxation laws as described in the above resources.
You should bookmark this page to stay on top of any changes relating to gambling tax winnings since most countries take a different approach than ours. Hopefully, this won’t change here anytime soon.
FAQ’s
Do you get taxed on gambling winnings in Australia?
No, the ATO clearly states that players do not need to pay taxes on their gambling winnings. Exceptions to this rule are professional gamblers and gambling operators, who are subject to fees based on their operations.
Do gamblers pay tax in Australia?
No! Unlike other countries, the Australian Government doesn’t impose any taxes on winnings produced from gambling activities.
Is gambling tax-free in Australia?
Yes, gambling is tax-free for Australian players. Professional gamblers and betting entities need to file taxes regarding their gambling net winnings.
What is a gambling tax?
A gambling tax is a form of regulation imposed by certain countries on players and operators. When it applies, gamblers and gambling institutions must report any net winnings over an amount and they will be required to pay a tax based on their annual earnings.
What is the tax rate on gambling winnings in Australia?
Players do not need to pay taxes on their gambling winnings. Gambling operators, on the other hand, are subject to a 15% tax rate, with varying rates for specific activities – like the public lottery or fixed odds betting.
How much tax to pay on gambling winnings?
You don’t need to pay any taxes on money won through gambling at retail casinos in Australia or offshore gambling operators.
Are winnings taxed in Australia?
Players’ gambling winnings are not taxed in Australia. A 15% tax rate applies to professional gamblers and gambling entities.
Are Melbourne Cup gambling winnings taxable?
No! You can place your bets on the Melbourne Cup without having to worry about any fees.
Do I need to pay taxes for winning on pokies machines in Australia?
Interactive gambling activities, often including casino games operating with a random number generator like pokies, are not subject to tax. Even if you win a big jackpot on pokies, you won’t need to pay any taxes!
How can I avoid paying taxes on casino winnings?
Luckily for you, there is no law requiring players to file for taxes in Australia. That’s unless you are a professional gambler.
Are poker winnings taxable in Australia?
Unless you are a professional poker player, you don’t need to pay taxes on your gambling winnings. This rule applies to legal online poker, and other table games, like blackjack, roulette, baccarat, and live casino games.
- About the Author
- Affiliate Disclosure
Michael has reviewed and verified all information on this page. Having worked in the iGaming industry for over 8 years, he is the most capable person to help you navigate online casinos, pokies, and the Australian gambling landscape.
