Betting Sites With No Tax

ATLANTIC CITY, N.J. Gambling industry wants additional financial aid from the next round of coronavirus stimulus legislation, and promises to fight new or higher taxes on its. Online sports betting and mobile sports betting apps will be available in May 2019. You must physically be located within the PA state border to place a bet online. Does the high PA Sports Betting tax impact my winnings? No, the 34% state tax and local 2% tax is on the sportsbook revenue generated by the PA Casino who owns the betting license. Finding the best online sports betting site can be challenging. As legal sports betting options become more prevalent, both dedicated bettors and everyday sports fans are looking for the best online sportsbooks and betting apps. We've reviewed 228 online betting sites and spent hundreds of hours identifying the top sites for betting on sports.

Tax Day is right around the corner, and sports wagering winnings should be part of a bettor's annual filing.

Nathan Rigley, a lead tax research analyst at H&R Block, spoke with TheLines.com to offer advice for bettors making preparations for 2018 and beyond.

The first thing to realize is that any winnings are taxable and bettors should include it on a tax return.

'Just because a taxpayer doesn't receive a tax form, (it) does not make the winnings tax-free,' he said. 'Taxpayers still have a responsibility to report their prize on their tax return as ‘other income.''

Don't neglect to report it

Don't be caught unaware. No matter the amount, gambling winnings are taxable. Those winning a substantial amount are likely to receive a tax form, and the IRS will also receive that form.

Those winnings will usually be reported via form W-2G or 1099-Misc. The IRS will then compare the information to the taxpayer's return. Not reporting can be costly, triggering penalties and interest.

'Failing to report the prize as income is the surest way to get audited,' Rigley said.

That could certainly be uncomfortable and cause the type of scrutiny most bettors would like to avoid.

Record keeping 101

Serious bettors must not only be savvy with betting lines, but also with record keeping. The IRS advises gamblers to keep an accurate diary or record to substantiate wins and losses on a tax return.

Plan to keep track. A little extra work can pay big dividends in the long run. Rigley recommends bettors include the following in their records:

• The date and type of each wager.
• The name and location of the bet.
• The names of other people with the bettor at the betting establishment.
• The amount won or lost.

Bettors should also keep verifiable documentation of losses, which include:

• Wagering tickets
• Canceled checks
• Credit card records

Mobile wagering makes keeping track of wagers much easier. Players should have easy access to bets made throughout the year. That helps in reporting overall wagering income.

Track those wins and losses

Bettors should keep track of their winnings, but also their losses. If they won big and show a profit for the year, they can offset winnings with losses to help lower a tax burden.

Only winners can deduct losses, and the full amount of winnings and losses must be reported when filing. However, Rigley notes that gamblers may deduct losses, but only by as much as they report in winnings.

For example, suppose a taxpayer entered two betting pools: One at the office and one among friends. Both had a $10 entry fee, and the player won $100 from the office pool. The bettor should report $90 in winnings, deducting the $10 fee.

For itemizing, the entry fee from the losing pool and other gambling losses could be taken as an itemized deduction. That would be capped, however, at a maximum of the amount won being reported, in this case, $90.

Do the new tax laws have any impact?

Taxpayers will notice some changes when filing this year. The Tax Cuts and Jobs Act changed many aspects regarding itemized deductions. That includes the elimination of some deductions that were subject to a 2% floor of adjusted gross income.

'This has been impactful for many taxpayers,' Rigley said. 'Luckily, the deduction for gambling losses, though a miscellaneous deduction, was not subject to this floor.'

This is advantageous to gamblers. They can continue to claim gambling losses as an itemized deduction to the extent of their gambling income.

Sports betting as a full-time job

The majority of bettors may fall into the recreational or hobby group. But those who bet professionally as their sole means of earning a living have different benefits and requirements.

These bettors would need to file as a business with a Schedule C form.

Filing as a business allows deducting expenses, but also subjects them to self-employment tax and possibly quarterly estimated payments. It's as if that bettor runs his or her business and files accordingly.

The new tax laws have had some changes on this aspect, however. Bettors can no longer deduct non-wagering business expenses in excess of net wagering income. Thus, reporting a loss as a gambler isn't possible.

Planning for next year

The new sports betting landscape has brought many more into the wagering ecosystem. Players new to betting may want to start planning for filing their 2019 taxes.

Rigley strongly advises maintaining detailed gambling records.

'The foundation of any tax return is one's records,' he said. 'In order to ensure the best outcome on the tax return, you have to make sure you can back up anything reported on your return, including the reporting of inherently personal activities like gambling.'

And if you do make a nice score, Rigley suggests making that first check to the tax man.

Nathan Rigley, a lead tax research analyst at H&R Block, spoke with TheLines.com to offer advice for bettors making preparations for 2018 and beyond.

The first thing to realize is that any winnings are taxable and bettors should include it on a tax return.

'Just because a taxpayer doesn't receive a tax form, (it) does not make the winnings tax-free,' he said. 'Taxpayers still have a responsibility to report their prize on their tax return as ‘other income.''

Don't neglect to report it

Don't be caught unaware. No matter the amount, gambling winnings are taxable. Those winning a substantial amount are likely to receive a tax form, and the IRS will also receive that form.

Those winnings will usually be reported via form W-2G or 1099-Misc. The IRS will then compare the information to the taxpayer's return. Not reporting can be costly, triggering penalties and interest.

'Failing to report the prize as income is the surest way to get audited,' Rigley said.

That could certainly be uncomfortable and cause the type of scrutiny most bettors would like to avoid.

Record keeping 101

Serious bettors must not only be savvy with betting lines, but also with record keeping. The IRS advises gamblers to keep an accurate diary or record to substantiate wins and losses on a tax return.

Plan to keep track. A little extra work can pay big dividends in the long run. Rigley recommends bettors include the following in their records:

• The date and type of each wager.
• The name and location of the bet.
• The names of other people with the bettor at the betting establishment.
• The amount won or lost.

Bettors should also keep verifiable documentation of losses, which include:

• Wagering tickets
• Canceled checks
• Credit card records

Mobile wagering makes keeping track of wagers much easier. Players should have easy access to bets made throughout the year. That helps in reporting overall wagering income.

Track those wins and losses

Bettors should keep track of their winnings, but also their losses. If they won big and show a profit for the year, they can offset winnings with losses to help lower a tax burden.

Only winners can deduct losses, and the full amount of winnings and losses must be reported when filing. However, Rigley notes that gamblers may deduct losses, but only by as much as they report in winnings.

For example, suppose a taxpayer entered two betting pools: One at the office and one among friends. Both had a $10 entry fee, and the player won $100 from the office pool. The bettor should report $90 in winnings, deducting the $10 fee.

For itemizing, the entry fee from the losing pool and other gambling losses could be taken as an itemized deduction. That would be capped, however, at a maximum of the amount won being reported, in this case, $90.

Do the new tax laws have any impact?

Taxpayers will notice some changes when filing this year. The Tax Cuts and Jobs Act changed many aspects regarding itemized deductions. That includes the elimination of some deductions that were subject to a 2% floor of adjusted gross income.

'This has been impactful for many taxpayers,' Rigley said. 'Luckily, the deduction for gambling losses, though a miscellaneous deduction, was not subject to this floor.'

This is advantageous to gamblers. They can continue to claim gambling losses as an itemized deduction to the extent of their gambling income.

Sports betting as a full-time job

The majority of bettors may fall into the recreational or hobby group. But those who bet professionally as their sole means of earning a living have different benefits and requirements.

These bettors would need to file as a business with a Schedule C form.

Filing as a business allows deducting expenses, but also subjects them to self-employment tax and possibly quarterly estimated payments. It's as if that bettor runs his or her business and files accordingly.

The new tax laws have had some changes on this aspect, however. Bettors can no longer deduct non-wagering business expenses in excess of net wagering income. Thus, reporting a loss as a gambler isn't possible.

Planning for next year

The new sports betting landscape has brought many more into the wagering ecosystem. Players new to betting may want to start planning for filing their 2019 taxes.

Rigley strongly advises maintaining detailed gambling records.

'The foundation of any tax return is one's records,' he said. 'In order to ensure the best outcome on the tax return, you have to make sure you can back up anything reported on your return, including the reporting of inherently personal activities like gambling.'

And if you do make a nice score, Rigley suggests making that first check to the tax man.

Set aside an estimated payment on taxes you'll owe on those winnings.

'This is essentially a deposit toward your tax liability,' he said. 'The reason we suggest this is that it helps to avoid any underpayment penalties for failing to deposit enough taxes throughout the year. And, psychologically, it seems easier to write that check when the income is new rather than be hit with the balance due down the road when the return is filed.'

Here's hoping that big win comes, though bettors should plan on paying Uncle Sam.

All countries and governments have their own online gambling tax policies and legislation so we need to look at this question from a global perspective. Firstly we'll cover the situation in the UK and following that look at how things may differ in the rest of the world.

Do you have to pay tax on your gambling winnings?

UK Gambling Taxes

Key Points

• All winnings either online or offline are tax free!
• Any betting tax abolished in 2001 by Gordon Brown.
• Tax used to be on bookies but they passed to punters.
• Bookmakers must now pay 15% POI tax but not punters.
• POI tax on any games of chance increased from 15% to 21% but again not for punters.

In the UK any and all winnings from gambling – either online or at betting shops – are entirely tax free and do not need to be declared as part of any tax return.

This has been the case since the then Chancellor of the Exchequer Gordon Brown's budget of 2001, when he abolished Betting Duty which had stood at 6.75%. That duty was removed in an attempt to persuade bookmakers not to move their operations overseas and therefore take jobs and revenue away from the UK economy.

All of that is not to say that there is no tax involved when it comes to gambling in the UK, however, and there is a ‘point of consumption' tax related to the activity. This does not affect punters themselves, though, and will be dealt with separately further down this page.

Betting Sites With No Tax Returns

Will the situation ever change? Generally speaking there is little chance that this situation will be reversed, either, as the UK tax system is simply not built in such a way that taxing gambling winnings would be viable. This is the case as it is fairly standard within the system that if tax is levied on the income or profit made through an activity, then there must also be an allowance made against losses through the same activity.

With gambling being an activity where overall more losses are made by punters than winnings, therefore, such a change in the tax legislation would cost the UK government revenue. As a result, it is quite simply not something which would be considered. Your betting, casino, slot machine, poker and bingo winnings are yours to keep tax free.

What About Professional Gamblers?

Betting Sites Online

It may seem logical that the tax situation would be different for professional gamblers than it is for occasional punters. When it comes to pure winnings from betting, however, that quite simply is not the case. As we have discussed above these winnings are not taxable and this remains true even for a ‘professional gambler'. That is because HMRC do not recognise professional gambling as a taxable trade.

In fact, within their most up to date ‘Business Income Manual', HMRC clearly define their position on professional gambling:

‘The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.' BIM22017

Gambling winnings, therefore, remain free of tax regardless of whether they make up an individual's main source of income. Where the situation can get a little more complicated, however, is in the case of income related to gambling but not actually direct winnings from gambling. Appearance fees paid to poker players for playing at certain tournaments, for instance, represent payment for a service provided to the tournament organisers and as such may be taxable.

Away from the UK, too, tax laws and legislation do differ and it would benefit a professional gambler outside of the UK to research the specific rules and regulations within their own country.

Kenyan Betting Sites With No Tax

UK Point of Consumption Tax

Betting Sites With No Taxes

As we mentioned earlier, Betting Duty for gamblers was abolished in 2001 and was at that time replaced by a 15% tax on gross profits for bookmakers and gambling providers. That tax was initially charged on a ‘point of supply' basis, meaning that if the bookmaker or company were not based in the UK, then they were not liable. This situation has more recently changed, however.

Betting Sites With No Taxation

From the latter part of 2014, the tax on bookmakers' profits was changed to a ‘point of consumption' tax by a combination of the Gambling (Licensing and Advertising) Act 2014 and by the introduction of ‘Remote Gaming Duty'. This means that regardless of where they themselves are based, providers must pay a 15% duty on any bets placed by UK customers.

In the 2018 budget chancellor George Osborne announced that the point of consumption tax would rise from 15% up to 21% for all games of chance but sports betting would remain at 15%, for now.

Gambling Taxes In The Rest Of The World

As the above table shows, where various types of gambling are legal there are a variety of different attitudes towards taxation on winnings from those forms of betting. If your country is not listed then it's likely gambling is not strictly legal and there is therefore no taxation laws.