Are Bet Winnings Tax-Free?

The short answer is – Yes.

All your gambling winnings in the UK are completely tax-free. You don’t have to pay income tax to the government for your gambling winnings. There is no gambling tax.

But this also means that you cannot deduct taxes from any gambling losses you may incur while playing casino games or sports betting.

What if you are outside the UK?

The tax exemption only applies to players who play from the UK and gamblers who are playing on gambling and betting sites that are fully licensed to operate in the UK.

If you are not a resident of the United Kingdom, you will be subject to your own countries tax laws. Other countries have different tax laws.

Are Profits and Earnings from Bet Winnings Tax-Free?

No. Earnings and any interest you earn from bet winnings will be taxed according to regular tax laws.

The tax exemption only applies to the actual winnings and not to any profit that results from its use. Even if it just sits in your bank account and earns interest, the interest will be taxed too.

If it’s passed from one person to another as an inheritance, it will also be subject to an inheritance tax.

Making Sense of the Betting Taxation in the UK

The most important points you have to remember when it comes to betting taxation in the UK are:

  • Players in the UK do not pay taxes for their gambling winnings on casino games, sports betting, or other gambling activities.
  • This applies to both online and offline gaming in the UK.
  • Countries included are: England, Scotland, Wales, and Northern Ireland.
  • No distinction is drawn between amateur and professional gamblers. Both are untaxed.
  • If you gamble on a gambling website outside the UK or on a site that is not registered in the UK, you may have to pay taxes.

The Gambling Act of 2005

The UK Government passed the UK Gambling Act 2005 in order to make gambling in the UK Tax-Free. This was done to combat the number of online casinos that were going off-shore to avoid the UK gambling taxes.

After the act was passed, residents of the UK were able to bet tax-free and gamble tax-free as well.

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Chancellor Gordon Brown

Players who have been gambling online for a while may remember having to play gambling duties for their earnings. This is until then Chancellor of the Exchequer, Gordon Brown, scrapped taxing on gambling earnings in 2001.

The act established the UK Gambling Commission (UKC). And it introduced tax legislation that made gambling winnings tax-free for UK residents.

Are the Casinos Taxed?

Yes. They pay a betting levy.

In fact, the UK Government made nearly 3 billion Pounds on gambling duties and remote gaming duty between 2017 and 2018. These duties and tax revenue are not paid by the players directly but by the casinos and betting sites.

Gambling operators are required to pay a 15% tax levy. This includes those operating poker rooms, betting shops, casinos, and other gambling and betting establishments in the gambling industry.

Do the Casinos Pass their Tax Spending on to the Players?

Technically, yes. Players do not have to pay directly to the government but most casinos and online betting sites do pass the tax spending onto the customers.

The same applies to bookmakers. They have to pay levy and betting duty for any profit they make. Punters are not taxed.

It is Usually Built into the Odds

There is no direct “tax fee” that players have to pay. This is usually built into the odds and the players pay for the tax and the betting levy and betting duty indirectly.

Betting FAQ

  • Are Professional Gamblers Taxed?

    No. Neither professional nor amateur gamblers are taxed. The UK government does not make a distinction between amateur and professional gambling. Any profits you make from gambling won't be taxed.

  • Can You Still Play on Off-Shore Sites?

    Yes. Many online gambling sites that are registered to operate in the UK are based off-shore. UK players can still play tax-free on these gambling sites, as long as they are registered in the UK. If you play on an unregistered gambling site, then your gambling winnings may be subject to taxes.

  • Is Gambling Income Taxable?

    It is not taxable in the UK. Even if you consider yourself a professional gambler, your earnings from gambling won’t be taxed. This is true no matter what form of gambling you earn your money from. Be it blackjack, sports betting, etc.

  • Can you Deduct Your Gambling Losses from your Taxes?

    No. In the same vein that your gambling winnings aren’t taxable, your gambling losses aren’t deductible either.

  • Do you Need to Declare Winnings?

    Yes. You are required to declare winnings even if you will not be taxed. It has to be declared on your annual tax return.

  • Are Lottery Winnings Taxed?

    Lottery winnings are not taxed in the UK.

  • Is there a cap before your gambling winnings are taxed in the UK?

    No. No matter how much you win in the UK, your gambling winnings are not taxable.

  • Which Countries in the UK won’t tax my winnings?

    Every country in the UK does not tax gambling winnings. This includes England, Scotland, Wales, and Northern Ireland. If you live in those countries, your gambling winnings will not be taxed. As long as you win from a gambling-related industry such as betting, casino gaming, sports bets, and more.