Do You Have to Pay Taxes on Winnings at Online Casino Games?

Do You Have to Pay Taxes on Winnings at Online Casino Games?


Every year, thousands of Arab players visit online casinos and sportsbooks to enjoy gambling and bet on an event from the world of sports or eSports. Although iGaming platforms like VipArabClub allow their visitors and users to play some gambling games in free demo mode, it is the opportunity to risk their money for big winnings that attract players. However, can you keep every penny of your winnings or is there a tax on winnings that needs to be paid? 

In many countries where gambling is legal in terms of current legislation, there is a tax on winnings. This means that if you win any amount of money playing online slots, online blackjack, or online roulette, you will have to pay a part of it to the government as tax. In addition, some governments have introduced the concept of a professional gambler. That is, if you view your gambling activities as a source of regular income, then you are a professional gambler and should pay tax on casino winnings. What about taxation in Arab countries where most of them are so-called grey gambling zones? So, keep reading to find out all the important things about online gambling and winnings tax. 

Gambling Activities Which May Be Taxed

As we mentioned above, many Arab countries are still grey gambling regions because they have not yet introduced clear laws regarding the regulation of online gambling. This means that locals can play their favourite gambling games as well as bet on sports and eSports events via iGaming platforms without any restrictions whatsoever. In addition, they can withdraw their winnings to any available financial instrument without paying taxes on their winnings. However, if you live in a country that has laws regarding online gambling regulation, it is likely that your winnings are tax-deductible. If this is the case, here are a few things you should know about the taxation of gambling winnings:

  • Sports betting. Whether you like to bet on traditional sports like football, basketball and ice hockey, or on rarer variants like football or rugby, your winnings are taxed. This means that you have to transfer some of the money you win as a result of a successful prediction to the state treasury. Generally, winnings over a certain amount are taxed by the tax authorities. This means that you will probably not have to pay tax on every win.
  • Tax on winnings from online slots and bingo. Because they are chance games, they are generally taxed somewhat more favourably. For example, in some countries, you will only be taxed on winnings from online slots and bingo if your winnings are worth more than $1,000 or the equivalent in another currency.
  • Tax on winnings from skill-focused casino games. Generally, skill-focused games are commonly understood to be options such as poker or blackjack where being able to think strategically can improve your gambling results. Such games may be subject to taxes on winnings equivalent to those imposed on winnings from sports betting. 

Before you join an online casino and make a deposit, make sure you are aware of the gambling laws in your country. If you are in a grey gambling zone, you can feel free from worrying about paying taxes on winnings, as they most likely do not apply. However, if online gambling/betting has been legalized in your country, you should find out what taxes you have to pay on winnings. Firstly, find out if you have to pay taxes immediately or if you have some time to do so. Secondly, check whether there is some kind of special tax return where you have to list your gambling winnings. Thirdly, be aware of the possible consequences of not paying taxes on winnings that can be expected. Since gambling laws differ from country to country, you need to do your homework to learn about all the subtleties and pitfalls. 

Important Tax Tips for Gambling & Betting Winnings

Online gambling and betting are developing rapidly in Arab countries. Today, there are many online casinos and sportsbooks offering a wide variety of gambling activities. However, before you start putting your hard-earned money at risk, you should familiarize yourself with all the specifics of online gambling regulation, including whether your winnings are tax-deductible or not. So, if you live in a country where you have to pay taxes on winnings, then you should follow the advice and recommendations below:

  • Report all winnings from online casinos and betting shops. Whether you think of gambling simply as a way of killing your free time or as a way of earning a living, you should report your winnings to the tax authority. Even if your winnings are minuscule, you still need to report them. Keep in mind that some online casinos like VipArabClub may also offer non-cash prizes such as gadgets or trips. Note that these are also regarded by the tax authorities as income and are therefore tax deductible.
  • Get a special form to fill in before you go to the tax authority. In some countries, for example, there is a special form that taxpayers have to fill in. When you receive such a form, you have to state your gambling profits for the period so that the tax authority can calculate the amount of tax you have to pay. Some online casinos and sportsbooks give out tax forms to their players almost immediately after they have placed their first real money bet. Please note that you must submit the form correctly by the due date as stipulated by law. Should you fail to submit your tax form on time, you may be liable to penalties under applicable legislation.
  • Also report your gambling losses as these can be deducted from your total winnings tax. Whichever gambling games you play, they all have a house advantage. This means that if luck is not on your side, you may incur gambling losses instead of your desired winnings. However, if you are not a professional gambler, it will be more difficult for you to convince the tax authority that you have incurred gambling losses, which will have to be deducted from the tax total. Also, you will not be able to deduct losses that exceed winnings. Let's say you made two bets on online roulette, and one of them brought you a winning of $200, and for the other, you lost $400. You will be able to deduct no more than $200 in losses. In some countries, professional gamblers can deduct their losses as a business expense. However, your gambling activity can only qualify as a business activity if gambling is your main occupation.
  • You should report your gambling winnings and losses separately. Even if you have won and lost over a short gambling session in one particular casino game, you should separate your winnings and losses when you report them. The fact is that you will not be able to downplay your gambling and sports betting winnings at the expense of the losses incurred. You should therefore declare them separately.
  • Always keep a record of your gambling bets. To fill in the tax form correctly, you must list all your winnings and losses over the period. You can either keep manual records or you can use spreadsheets to simplify the task. Notably, some advanced iGaming platforms keep a history of all your bets from which you can easily display all your winnings and losses for the relevant time period.
  • Taxes on winnings can be either national or local. Check your tax form carefully to see if there is a field for reporting winnings to the local authorities. If such a field exists, you will likely have to pay state and local taxes on gambling winnings. Notably, if you move to another region of your country, you may find that the local authorities also wish to collect tax on gambling profits. However, you don't have to pay taxes twice, so contact the local tax authority in your home region to get a tax credit. 

Finally, there are countries where taxes on winnings are imposed on the operators of online casinos and betting platforms. In this case, the operator charges an additional fee on the sum of winnings withdrawn. For example, withdrawing $500 winnings, you may find that the actual amount of money credited to your bank card or e-wallet will be somewhat less. 

Possible Consequences of Not Paying Taxes on Gambling Winnings

In countries where internet gambling has been legalized, players are under the watchful eye of the tax authorities. This means that information about your gambling winnings may become available to the tax authority. If you do not fill in the tax form on time and refuse to pay taxes on winnings, a tax audit may be carried out and a fine on top of the amount of taxes you have to pay may be imposed. Ultimately, if you live in a country that has a gambling winnings tax, you should check the current legislation carefully and stick to it to avoid serious consequences.

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