Betting tax – what taxes do you have to pay when playing at a bookmaker?

Betting, as well as other gambling activities, constitute an area that is subject to taxation in Poland. Do taxes always have to be paid or only in specific cases? Is the tax on betting bet on the Internet is it the same as in the case of fixed points? What is the winnings tax and when do I have to pay it? The article discusses all the most important issues for players regarding taxes related to the gambling industry.

Betting – tax on each bet

Basic income tax bookmakers as in Poland, it is turnover tax, which must be paid from each bet entered into . Such an obligation is imposed on bookmakers by the "law of November 19, 2009 on gambling", which established the amount of bets paid as a tax base, and set the amount of tax at the level of 12% . Although the taxpayer of this tax is the organizer of mutual bets, in practice bookmakers collect its amount from the bets made by typers. Thus, the tax equivalent it is deducted at the time of placing the bet - both at the ground point and through the player's online account. For example, when you set aside $ 10 to place a bet, only $ 8.80 actually comes into play, while $ 1.20 is automatically taken away for later bookmaker he handed them over to the IRS. It should be noted that this tax on sports betting is independent of the outcome of the bet thus, whether the typer wins or loses, every time 12% of the bet goes to the state budget.

However, does the tax on betting always have to be paid from the funds contributed by the typer? Well, the Gambling Act only requires the organizers of mutual bets to pay tax in a certain amount, leaving them free rein as to who will actually cover the costs of taxation. Therefore, bookmakers unanimously apply the principle that it is best to shift the tax on betting on the Internet and at ground points to the other side, that is, to the players. However, you can find a specific promotion, which is called the "tax-free game" . This term can be a bit misleading, because it suggests that the tax on betting is not paid at all. This is not true – let us emphasize once again that legal bookmakers they must pay this tax unconditionally. The so-called tax-free game means that tax-free game for player as part of the promotion this bookmaker pays turnover tax from their own funds . Thanks to the entire stake is involved in the game and in case of winning the coupon, the player's profit is increased by about 14%.

Let's take a look at the amount of winnings. In the case of the standard procedure, that is, when the gaming tax is deducted from the bet placed by the player, in order to calculate the win, the following formula should be used:

odds x BET x 0.88 = final win

In this way, you will receive a win less the cost of taxation, that is, the amount that will actually go to the player's pocket. On the other hand, in a situation where the typer bets a coupon as part of the "play without tax" promotion, it is enough to multiply the odds and the bet rate, and the resulting value will already be the final win, i.e.:

odds x BET = final win

Tax on winnings at the bookmaker

Thus, the discussed tax on betting is present in every bet placed with a legal organizer of mutual bets. On the other hand, a separate issue is the tax on winnings at the bookmaker, which must be covered in the event of placing a hit sports bet. Fortunately this does not apply to all winning coupons, but only those with a value of more than $2280 . In this case, it is mandatory to give 10% of the winnings the state budget and here too. the bookmaker is responsible for paying the tax . So, for example, if the win is $ 2,300, the typer will be paid $ 2,070, and $ 230 will go to the account of the Tax Office.

It is worth immediately clarifying some doubts about how the tax on winnings at the bookmaker works:

• Only the value of a single win counts. winnings from subsequent coupons of a given player do not add up . For example, if a player bets 10 winning coupons (even 1 day), and the total amount of winnings is $ 5000, but the winnings on any of the individual coupons do not exceed $ 2280, the amount of tax on the winnings will not be collected.
• To the detriment of the players, the fact that the tax is charged on the total amount won, not on the amount won over $2280. Thus, if a player wins $ 2,500, he will pay a tax of 10% of $ 2,500, and not on the amount above $ 2,280, that is, 10% of $220.
• The same applies to the rate charged . she also does not matter here. So if a player plays for, for example, $ 2,000 and his win is $ 2,500, then despite the fact that his profit is only $ 500, the win will still exceed the permissible limit. This is because the player pays tax on the winnings at the bookmaker not from the surplus obtained (2500 $ – 2000 $ = 500 $), and from the whole win (2500 $). It may even happen that the player who bets the hit coupon, in the end, will still be at a loss, because the sum of the BET and the tax on the winnings will exceed the amount won.

Issues related to the income tax are regulated by the personal income tax act.

Gaming and wagering tax in Europe

In Poland, therefore, the turnover tax (12%) is applied as standard, and in the case of winning coupons with an amount of more than $ 2280, the winning Tax (10%) is also applied. However, as it turns out, the system of taxation of bookmakers adopted in our country is not very popular in Europe. Most European countries apply a different gaming tax, which is based on GGR (Gross Gaming Revenue). How does it work? Now the GGR system consists in calculating the tax on the basis of the sum of funds contributed by players to the cashier of a bookmaker or other gambling organizer, which amount, however, is reduced by the payout of winnings. The gambling tax itself is at the level that will be adopted in a given country, in Europe in individual countries it is 10% to 25%. For example, in Denmark, the GGR tax on games and reciprocal bets is 15%, in the UK 20%, and in our southern neighbors, in the Czech Republic 23% for betting and lotteries and 35% for online games.

In practice, it turns out that taxes after deduction of winnings work better for the gambling market and such a solution is postulated by the Africane betting environment. In the GGR system, despite the higher percentage of gross income tax, bookmakers ultimately pay less than in the case of turnover tax. Another undeniable advantage of the so-called" Danish model " is the obvious increase in revenues from legal gambling to the state budget. For example, the turnover tax used in Poland is, on the one hand, very high, if you take into account how much burden it is for the player, and on the other hand, the revenues to the state treasury are relatively not so large (taking into account the amount of tax and the number of citizens). It is also worth noting one thing – other European countries, which, like Africa, apply a tax on games calculated on turnover, have a much lower level of taxation than the one in force here – in Germany it is 5%, in Austria or Ireland 2%, and in Malta only 0.5%.

It is worth adding that the financial benefits of the state and bookmakers are not everything. Remember that the amount of taxes on gambling in a given country affects the size of the gray area of the betting and gambling market, the development of the legal market, and thus the quality of services and safety of players.

Taxes on other gambling in Poland

Turnover tax-other gambling

As for gambling other than betting, there is also a special gaming tax. The Gambling Act specifies that the amount of taxation depends on the type of game, and the tax rate is specifically:

• 10% off for fantasy lottery and fantasy bingo,
• 15% for lottery money,
• 20% for the number game,
• 25% for cash bingo, telebingo, audiotex lottery and poker played in the form of a poker tournament,
• 50% off for Slot Machine Games, cylindrical games, dice games, card games (excluding tournament poker games),
• 2.5% for cross-bets on sports competition of animals organized on the basis of a special permit – this is an exception when it comes to betting (here the rate is 12%).

The tax on gambling – on the Internet and at land-based points-is paid by the organizers of gambling.

Tax on winnings-other gambling

However, a very important question arises: Does the tax on winnings apply only to betting or also to other gambling activities? We need to look again for answers in the personal income tax act. First the good news, tax exempt winnings obtained during the game:

• na slot machines ,
• the card game,
• in the bone,
• the cylindrical games,
• the bingo money games,
• bingo games.

However, there is one important thing that should definitely be remembered. The tax exemption clause is one thing, but in order for it to be useful in practice, the player must be able to properly document the origin of the funds he received. This is why it is so important to get written win certificate from the gambling organizer , e.g. from casinos . In the event that the player does not have such a document, the tax authority may tax the winnings, demanding payment of 75% of its value (as income from an undocumented source).

While other gambling activities are exempt from the winnings tax only if the winnings amount does not exceed $2280. So taxes on winnings above the $ 2280 limit must pay also, those players who received them in the framework of:

• number game,
• lottery money,
• telebingo games,
• promotional lottery,
• audiotex lottery,
• the fantasy lottery.

Each time this tax is 10% of the winning amount .

Important links:

http://prawo.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=WDU20220000165 -Gambling Act (after entering the site, select the version Consolidated text )

http://prawo.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=wdu19910800350 -Personal Income Tax Act (after entering the website, select the version Consolidated text )