This is such a common question! We have found if asked, most online pokie players have little to no clue if they are required to pay taxes on their winnings here in Australia. Some claim they are unsure due to the fact that they are playing on an foreign site.
Let us end the confusion, the bottom line is that winnings are not taxed in Australia, thats right NONE. There are no exceptions to this rule, all gaming be it pokies or casino winnings are completely tax free.
But what if gaming is taxed in the country you are taking the winnings out of?
Due to the way online casinos are structured, if you stick to the casinos we recommend you will not be required to pay any taxes on your winnings if brought into Australia even though they are coming out of another country. So rest assured that when you hit the jackpot and win over a million dollars (which a few of our happy customers already have) you will not need to pay a cent in tax, it’s all yours to enjoy. Now that you know you can gamble tax free, please check out our top performing casino:
What if the site your winnings comes from is off shore?
With our casinos this makes no difference. The way it works with Australia is what country you are bringing the winnings into and if you are bringing the money into Australia you are exempt from paying any taxes.
In many countries around the world, when you hit a big jackpot, win the lottery or win a huge amount of money by one form of gambling or another, it is treated like part of your regular income and you are taxed accordingly. This rate can be very high, and to make matters worse, your winnings are often doubly taxed due to dual federal and state taxes. Sometimes winners of around $200,000,000 end up with around $80,000,000 after taxes depending on where they live. Now, don’t get us wrong, $80,000,000 is not an amount any of us would sneeze at, and anyone in the world would be thrilled to receive such an amount. But still – that is $120,000,000 paid in taxes. That is more than 50% of your winnings to the government. This seems pretty excessive to us. So what is the situation in Australia? Well, Australian winners of all sorts of forms of gambling are luckier than a lot of other gamblers around the world. Gambling taxation in Australia does not affect the average Australian winner directly as gambling taxation is effected on a corporate level, not an individual one. This is very different from many places around the world, like the case of the United States above, where the inner pays the taxes on the gambling prize. Many countries that levy taxes on gambling winners will not tax small amounts. The line between a small amount and a large amount is arbitrary and varies from country to country. In many states of the United Sates it is around $600 and winners of that amount and less can take all their winnings tax free. But after that line is crossed and the winnings become “large” or significant, the taxes can be huge. So we as Australians are very lucky indeed, but we have to hope that the Australian government doesn’t decide to change its gambling taxation policy and move to mirror one of those winner-based taxation system. Let’s have a closer look at Australia’s current approach to gambling winnings and gambling taxations.
The Australian government views gambling winnings slightly different than many other countries and this is the cause of the different approach to gambling taxation. Where many nations, like the United States, view gambling winnings and income, Australia views it as luck. The rationale for this is simple. When people gamble – whether on the pokies, or playing poker, or blackjack or craps or whatever – most of the time, they lose. Gambling sees more money leave gamblers pockets on average than enter it. Also, when people do win, they usually don’t win large amounts. Gambling cannot reasonably or rationally be considered income, because it’s making people lose money more than make it. Another reason that gambling winnings are not taxed as income is that “gambler” is not considered a profession in Australia. Gambling is considered a pastime or a hobby and a form of entertainment. Gamblers mostly gamble for the enjoyment that it offers rather than the possibility of any winnings they might make. Now there are gamblers out there who are definitely not in it primarily for the enjoyment of it, but are seeking money as a first priority. They work systems to reduce their losses and increase their winnings as much as possible and generally do considerably better than those more recreational gamblers who do not pay attention to systems or patterns and just play, sometimes winning and sometimes (more often) losing. Even this type of gambling, what these more “professional” gamblers are doing, is not considered a profession. Consider this – if it was a profession, would the “professionals” be able to write off any of their losses on their taxes? Very unlikely.
We are sure that you can think of a great many areas in which you are paying taxes that you don’t think are very fair or just or even make much sense. So why this seemingly reasonable and sensible and fair approach to gambling taxation? Well, there is a third reason that gambling winnings are not taxed, and it is this reason that really keeps the government’s hands of your jackpot or lottery or sports bet winnings. What is that reason? Gambling is already taxed. It is not fair to tax that gambling again by taxing the winner. Gambling is taxed at the corporate level in Australia, with online gaming sites and casinos paying the taxes and the individual avoiding them. A number of politicians would like to tap into this potential reservoir of wealth by taxing winners but politically it is a minefield. Legislation that targets the gambling winnings of individual gamers for taxation is incredibly unpopular. Australians are on average, very big gamblers. The average Australian spends nearly eight thousand dollars a year on gambling – including online sites, in casinos and on sporting events such as horse races or greyhound races or football games. Internationally, this is well above average, and this incredible popularity of gambling in all its forms creates quite a powerful lobby group that can fight any efforts by politicians to increase/create taxes on individual gambling winnings. You might think that casinos and online gaming sites would be in favour of shifting a certain percentage of the tax burden onto winners and off the casinos and gaming sites themselves. However this is not the case, even these companies are firmly in favour of the current system and oppose any change. Even though it is true that a change in the gambling taxation policy would mean a decrease in the rates of tax that those companies pay, the companies and the industry as a whole fears that a shift in taxation policy moving towards taxing gambling winnings would means a significant loss in customers. Some gamblers, particularly those who work the systems and aim to make money through gambling, would likely significantly reduce the amount the gamble or give it up all together should they suddenly have to start paying taxes on their winnings.