If you are lucky enough to land a big win at a UK casino, you might find yourself wondering whether you need to pay tax on your winnings, and, if so, how much? Well, good news! Casino winnings, as well as all other gambling winnings, are not taxable in the UK, regardless of how much you win. In this article, we are going to take a look at UK gambling law history, implications for bettors, and what the future might hold.
Gambling Laws History
Betting shows were legalised in Britain in 1960 with the introduction of the Betting and Gaming Act. Initially, bettors were taxed 9% on all of their gambling winnings, a figure that is astonishing by today’s standards, even if the strictest of regulated markets.
This law stayed in place until 2001 when Gordon Brown abolished taxes for punters in a popular budget move in 2001. In its place, UK bookmakers would foot the bit, paying 15% tax on their total profits. Of course, this led to many companies moving to other countries, with modern iGaming hubs Malta and Gibraltar both being popular options thanks to their low tax rates.
Eventually, changes were made to prevent this, with companies, including offshore ones, paying 15% at the point of consumption. In short, if companies wanted to obtain a UK gambling license, which is seen as one of the best to have given the popularity of the British market, then they would need to pay taxes.
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The gambling industry has grown an exponential amount in recent years, and it is continuing to evolve at a rapid rate. As such, regulations, especially financial ones, must adapt to keep up with these changes. The United Kingdom Gambling Commission (UKGC), the body tasked with managing all gambling activity in the UK, is widely considered one of the best regulators in the world, and it is constantly changing its regulations to keep up with an expanding market.
All regulators that operate in the UK must be fully licensed by the UKGC. They must also pay a 15% tax, regardless of whether they are based in the UK or not. The UKGC’s regulations are an excellent way of ensuring a level playing field between the operator and the players.
Do Professional Gamblers Pay Tax on their Winnings?
No. Regardless of your gambling success, you never have to pay any income tax on them. Equally, you can not register gambling losses as a work expense. This includes professional poker players.
Are Bingo Winnings Taxable?
No. Bingo winnings are considered gambling winnings are not taxable in the UK, regardless of how much you have won. Like casinos and bookmakers, bingo providers pay the taxes instead, with the rate set at 15%.
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Why Gambling Winnings are not Taxable?
Gambling winnings are not taxed in the UK because the bookmaker is the one that pays taxes. There is also a logic in not taxing gambling winnings. If winnings were taxable, then losses could also be tax-deductable, and this could make things very complicated. Instead, the government has opted to tax the bookmakers and casino a flat-rate, which has proven to be a hugely beneficial system for the entire British gambling industry.
Responsible Gambling in the UK
It is important to remember to gamble responsibly at all times in the UK. The laws in the UK are extremely favourable towards gamblers, and the lack of taxation makes gambling an extremely attractive prospect for many. However, you should always remember that gambling should be fun and should never be relied on as a form of income. You should always practise responsible gambling, which includes setting limits on your betting activities and never chasing losses. If you feel as though you are having issues with your gambling, do not hesitate to check out our dedicated responsible gambling page here at Gambling Zone.
