Gambling is one of the oldest human engagements in history, and the UK has the oldest gambling laws on record. The law was passed in 1190 by King Richard I of England and King Philip of France in the same year. Today, gambling has become a big business. The gambling industry in the UK is one of the biggest in the world, and many people engage in it for fun according to the UK online casino.
But what does the law say about gambling taxes? Do you owe taxes on your casino winnings? We do know that UK laws have strict laws on gambling, including winnings and commissions. So if you are a casino gambler, we are sure you would like to know whether you can keep all your winnings or pay a percentage to the government.
This guide will answer all your questions.
UK Gambling Laws
The gambling laws of the UK are designed to protect gamblers from being ripped off by casinos. These laws prevent sharp practices synonymous with gambling. The two laws that regulate the gambling industry are the Gambling Act 2005 and the Gambling Licensing and Advertising Act 2014.
Gambling Act 2005
The Gambling Act 2005 has the following objectives:
- Prevent gambling from being a source of crime and public disorder
- To ensure fairness and openness
- Protect children and other vulnerable persons from harm and exploitation
- To ensure all gambling outfits have an operating license
Gambling License & Advertising Act 2014
This act is the legal framework for the Gambling Act of 2005. It is designed to regulate online gambling and casinos as well as online sports betting facilities. It does the following:
- Ensures that advertising of gambling is done through remote communication
- Repeal existing offenses regarding foreign gambling adverts
- It makes unlicensed remote gambling adverts illegal in the UK and Northern Ireland
Do Casino Gamblers In The UK Pay Tax On Winnings?
The UK is one of the few countries in the world that does not tax gamblers on their winnings. This means that if you stake your money and win a huge pile of cash, you can walk away with your bounty without having to share part of it with the taxman.
But this wasn’t always the case. Before 2001, gambling winnings were taxed by the government, but all that ended under Gordon Brown. At a time, he was the Chancellor of The Exchequer and got rid of eye 6.75% General Betting Duty (GBD) imposed on casinos.
This levy was very prohibitive, and Casino houses and platforms were not as profitable as they should be. This caused many of them to take their operations out of UK shores to other countries.
This led to a loss of revenue for the government since many online gamblers could still access some of these platforms over the internet and still place bets.
But with the cancelation of the GBD tax, casual gamblers no longer have to pay taxes on winnings, and this covers both online and physical casinos.
What Does The Law Say About Pro Gamblers?
What if you are a pro gambler? Will you still have to pay taxes on your winnings? The sentiment of the UK government is not to tax casual gamblers because they see it as a fun activity that participants should not be taxed for it. But the same is the case for pro gamblers.
Pros are high rollers who place huge stakes on their plays compared to casual gamblers, but the tax authorities leave them out of the tax net as well. So if you are a professional casino gambler, you can keep all your winnings.
But if you are in the UK but want to gamble on foreign platforms, you will most likely pay tax on winnings. Unlike in the UK, many foreign governments charge taxes on winnings. So make sure you do your due diligence to know the percentage of your winnings you will pay as tax before you fund your account. UK gambling laws are only active within UK jurisdiction, not abroad.
What About UK Casino Houses?
While casual and pro gamblers are not taxed, casinos are not exempt from paying taxes. The income these companies generate is subject to taxes for in house and online outfits. However, the percentage varies depending on the type of gambling outfit.
Online casinos pay Remote Gaming Duty, which is a percentage of their profits. Currently, the percentage is between 15%-21%. For land casinos, the tax they pay depends on the games they offer and their earnings. A land casino may pay between 5%-25% tax on profits from slots and 15%-50% on other games. For sports betting, the standard tax is 15% on profits made from wagers.
As you can see, the percentage varies and is subject to change, but one thing is clear; players don’t pay tax on their winnings, but Casinos don’t.
If you earn winning from casino gambling, UK gambling laws allow you to keep all your winning and pay no taxes.