A big win at the casino can be quite life changing, hitting the seven-figure jackpot is something that few people have experienced in life, but five and six figure winnings are much more common to see too particularly with the growing online space – with the good news comes the bad for some though, as countries that tax on casino winnings can sometimes take away a huge portion of the winnings. The biggest stories come from the US particularly with the lottery, those who have won the $1 billion Powerball only to see nearly half taken away for tax purposes – but how are the taxation rules in other countries?
Heavy taxes for US players, but some deductibles too – As noted above, it won’t come as any surprise that US players are quite heavily taxed on winnings that come from any gambling or game of chance including things like the lottery and bingo too, and state taxes are applicable here too. Players can seek out the states that have the most favorable tax rates on winnings but will still have to pay for the big wins regardless. There is something positive on the other hand though, and something unique to the US – whilst winnings are taxed, losses can be deducted from taxes too but only based on winnings. If a player wins $200 on a bet, but loses $400 on a few others, $200 can be deducted from taxes as a loss. It’s not a perfect system but does help balance things out for some.
UK gambling remains tax free – Another of the biggest gambling markets in the world, and one that has no taxes assigned to winnings, but that also means no deductibles for losses either. This is true for many different types of games from the slots to the lottery, and any winnings made are kept in their entirety. It has been suggested in recent years that this may change in the future, but for now all casino winnings and winnings from gambling or betting are free and clear. Canada, Australia, and New Zealand – Whilst there’s a bit of a distance between these three countries, there are plenty of similarities between the three. For all three, recreational gambling is often considered to be the result of good luck with winnings and aren’t subject to tax, but players in Canada and sometimes in New Zealand who gamble for a living and make it a profession may be subject to unique taxes on winnings as it’s a vocation and not recreation. These laws change regularly, however, so may go through lots of changes regularly.