In most countries, gamblers are required to pay a percentage of their winnings to the government in the form of various gambling taxes, although some countries charge far more than others when it comes to taxing the proceeds of wagering.
Giving a portion of your hard-earned money that you have just won at a casino back to the government can feel pretty unfair. However, this taxation is also applicable to casinos, where their gross gaming revenue (GGR) is taxed. In theory, the government is supposed to use the money generated from regulated gambling to benefit the economy and communities.
Every country taxes GGR differently, although it’s usually a percentage of net profit that a casino brings in. Naturally, governments want to scoop up as much of the sin tax as possible, but not so much as to discourage new business. To maintain this delicate balance, many governments review their taxation formulas every couple of years.
5 Countries with the Highest Gambling Taxes
While some states consider gambling as immoral, there is no doubt that it can be a cash cow for national budgets. Here are the countries that have the highest gambling taxes:
- France – France is a chart-topper when it comes to gambling taxes. It recently updated its taxing system from overall turnover to GGD, leaving casinos in a slightly better position. Nonetheless, land-based casinos still need to cough up a staggering 83,5% GGR, sportsbooks are liable for 52,2%, online poker operators pay 40,8%, and horseracing is set at 37,7%.
- Denmark – Denmark taxes land-based casinos at 45% of the GGR. However, if a casino’s GGR exceeds US$612,000 per annum, this percentage shoots up to a far more sizeable 75%.
- Australia – The tax rate in Australia varies from state to state, although in some places it can be as high as 65% on lottery. However, gaming machine tax is a mere 25%, with table games even lower at 20%.
- United Kingdom – A tiered system is used in the UK, where casinos pay a fixed percentage based on their revenue. This starts at 15% and can go up to 50%.
- USA – Taxation variations are considerable across the states, although it is the player who pays, and not the casino. Rhode Island has the highest rate of 51%, while Colorado and the District of Columbia have the lowest tax of only 10%.
5 Countries with the Lowest Gambling Taxes
Some countries’ taxes might make you cringe, although there are those that have gambling taxes so low that you might be left in disbelief.
- Russia – Russia is the hottest place to be if you are a casino owner. Currently, no tax is paid on any gaming revenue in the Russian Federation, with only a flat fee charged on gaming tables and electronic gambling machines, and a similar system used for bookmakers.
- Singapore – Singapore levies a minuscule 5% tax on online casinos, although this amount goes up to 15% for land-based operations.
- Argentina – Argentina was for a long time one of the top havens for online gamblers, with tax-free winnings legislation. However, this is about to change, with a 2% fee and 15% gross income being considered, which is still a pretty light tax.
- Kenya – Although one of the places with the lowest gambling tax, there has been some fallout from the sports betting tax that was recently doubled to 20%. However, the Kenyan National Assembly overturned this increase on 25 June, scrapping the new and controversial 20% turnover tax.
- Italy – Although not the lowest of taxes, Italy did turn itself around over the past few years and currently charges online operators a 25% tax.
How Will the Coronavirus Impact Taxation?
With the global gambling industry heavily affected by the ongoing coronavirus pandemic, many countries have offered various incentives to assist their casinos. Singapore, for example, has extended a 10% tax break on its gaming sites and 30% on casino hotels.
In the US, Atlantic City has reduced gaming taxes and fees for the remainder of 2020. Ultimately, it is only with these types of incentives that many casinos will be able to weather the current storm and survive.
