No matter where you decide you want to play, it is incredibly important that you know how the nation's taxation works. Some countries might have legal gambling but strict taxation rules in place. One such country is Australia. Let's take a look at what you need to know if you are thinking of gambling Down Under.
Gambling in Australia
While many nations around the world enjoy gambling, Australians have to place in the highest. It is thought that approximately 80% of Australian adults engage with gambling in some way. There are casinos and pokies everywhere, and many major events pass through here like the World Series of Poker. No matter what type of gambling you enjoy the most, you should be able to find it in abundance here. However, that has not necessarily always been the case. Casino bills have slowly been introduced across the territories. Many gambling establishments have slowly been set up over the past few years. The introduction of online gambling took a little longer, but the Interactive Gambling Act of 2001 was passed by the parliament in June of that year. It is targeted at the operators over the players, instead seeking to protect the latter while still allowing them to play as they wish.
Taxation for Players
As a player in Australia, there is no rate of taxation for winners. This allows winners in Oz to keep 100% of any winnings they receive from a casino, be it online or a physical location.
The Australian law views any sort of gambling not as a profession but as a hobby. It is very difficult to make money professionally from gambling. Even many of the top players you see at an event like WSOP are not actually professional poker players and have a day job they go to on top of playing poker. Only the best of the best make an actual living from their gambling skills.
Instead, big wins are treated as an act of good fortune for the rest of the public. By choosing to not tax the average gambler, the Australian lawmakers instead recognise that the winner may also have lost a fair amount of money to gambling before landing the win. The lack of taxes then means that they can enjoy more of their wins.
This is also to try to avoid professional gamblers claiming losses back as business expenses. Anyone who sets themselves up as a self-employed professional will be able to put down business expenses for tax exemptions. When it comes to gambling, Australian lawmakers do not want to do this.
Taxation for Overseas Players
If you are a foreign player who has come to Australia to play in a tournament, or you are on holiday and just want to try a few games at a site like 5 Star Pokies, you still need to be aware of what the law potentially says about you. There is a chance that you may not be taxed by the Australian tax system, but your home nation could claim some of the money.
A player from another country that treats casino wins as luck - like the UK - does not have to worry. However, things can become slightly tricky for a country like the USA. The IRS considers any money won through a casino game to be taxable income. Luckily, the taxation rate is fixed and not progressive, so you will always be paying the same percentage rate whether you win $100 or $100,000. It is important that you as a gambler knows what is happening here. Just because Australia will not tax you does not necessarily mean that you are going to completely get away without paying any form of tax at all.
Taxation for Operators
Many of the big heavy hitters in Australian taxation laws are aimed at casino operators themselves. Obviously, the Oz lawmakers want to come down hard on the casino operators and not the players, and this can be seen reflected in the rates that they tax these operators at.
The tax rates vary from territory to territory, but there are some things that they all have in common. Primarily, the amount of quarterly player loss the casino sees will greatly alter the rate of taxation that casinos have to pay.
Therefore, the more they let players win, the lower the rates of tax they have to pay. It encourages them to boost RTP in favour of the player and dull down some of the casino's edge, especially when you consider that some territories have tax rates over 50% for the worst offenders. Many casinos also have to pay some sort of extra levy that goes towards either responsible gambling programs or back into the community in some way.
Many of these taxation rules do not apply to those operators outside of Australia. As a result, the Australian government encourages players to avoid overseas operators as much as they can. These can sometimes get around some of the restrictions that have been set in place to protect others. It is important that all players research a casino before signing up to it to ensure that it is as safe as possible. They should also make sure that they are following responsible gambling guidelines as closely as possible to avoid any further issues.
Taxation, A Subject Worth Knowing About
Taxation might be one of the drier subjects in the world of casinos, but it is incredibly important as it can dictate how a casino operates. This is one of the main tools governments can use to keep casinos in check, making sure that everything is as fair as possible. As an individual, all players need to know how taxation will affect them. Whether it is part of your winnings leaving you before they are even-handed over, or your own government back home taking some as taxable income, you always need to know where you stand. Make sure you always know how taxable income works for casinos and casino gambling, no matter where you are located.
