Paying Taxes on iGaming Winnings

0
45

Depending on where you are in the world when playing the plethora of iGaming titles available today, you may be asked to pay taxes on your winnings, should lady luck be on your side. However, given all the different laws around the globe, it’s unsurprising that the regulations will differ depending on your location and that is evident in two huge markets, notably this can be seen in action by taking a closer look at the rules regarding these taxes in the United States and the United Kingdom.

The current process for our friends across the pond in America can often be rather complex to understand to the casual gamer, as in the United States, each individual state is responsible for the regulation of gambling, whether it be in person at a land-based venue or online. This means that not all forms of betting are legal across all states, like they are for example in the UK. So, due to these changes in the rules regarding online gambling, especially with the advent of sports betting, which is slowly growing more traction across more states, each individual state can now decide if they would like to make all forms of online gambling legal. So, with this freedom, it is understandable that some have decided to do so already and one of the benefits to the state of making online gambling legal is tax.

There are millions of people in the United States who enjoy gambling and by introducing a gambling tax, this now allows each state a new way of generating funds which can be used in local communities. This may not do wonders for the reputation of Las Vegas being the gambling capital of the USA, however, it is not always easy to work out exactly how much tax you must pay on gambling winnings in the United States but the tax calculator on GambleColorado is a great help. Aiming to streamline the process and make it easier for punters of all experience levels, the tax calculator can be used to work out the amount of tax payable using the state in which you reside, relationship status, total annual taxable income, and gambling win amount.

So now with this new helpful tool in place, you do not have to be already acquainted with the specific tax structure or physically within in Colorado to make use of the tax calculator, as you can select your state from the drop-down menu when using the calculator to do the heavy lifting for you. When gambling in Colorado for example, the Internal Revenue Service considers all gambling winnings as taxable income, so this covers even lesser-known forms of income such as with game shows, bingo, lottery, casinos, sports betting, and racetracks are all included.

However, if we cross the Atlantic back to the United Kingdom, the regulations are different regarding taxation on gambling winnings. At the time of writing, there is no gambling tax in the UK. Therefore, weekend punters find it is possible for gamblers in the United Kingdom to keep the entirety of their winnings from gambling, whether it be a hand of poker in a casino game or by backing their local football team with a sporting wager.

There was a time when betting duties were in place in the UK but this was scrapped by the then Chancellor of the Exchequer, Gordon Brown, in 2001. One of the main reasons why the British government decided to end betting duties was due to the rise of offshore gambling websites in the early noughties. As a result of this change up to the market, these websites were leading players to gamble online using companies which were not registered to offer their services in the UK and thus posed a risk to the individual making the bet, as often their legitimacy could be called into question. This resulted in huge risks for players, as the operators provided no guarantee the gambling website was going to pay out winnings, not sell on customers personal or financial data and it was often extremely difficult to get in touch with the customer support teams to resolve any issues that may have arisen.

Following the end of betting duties, the UK government passed the Gambling Act of 2005 and went on to stabilise the entire gaming sector by establishing the UK Gambling Commission to regulate all forms of gambling in the country, all without the need to apply tax to gambling winnings.