Evaluation of Gambling Taxes in Canada and Beyond

Think Canada gambling taxes are high? Don’t open a casino in Kenya!

Gambling is a legally regulated activity in most countries. Governments collect a great deal of money from gambling operations by way of taxation. But if you think the gambling taxes in Canada are high, think again. Some countries are gouging their gambling operators, and even the players, while claiming it’s for the greater good.

Canada Gambling Taxes

Here in the Great White North, the government of each province where gambling is legal collects a cool 20% of all gross revenue. A casino operator who harvests $1,000,000 will have to fork over $200,000 of that to the treasury department. However, those operators can also claim deductions on their taxes to bring that cost down.

For players, it’s a whole different ballgame. Fortunately, we’re on the winning team. The Canadian Revenue Agency does not require residents to claim gambling winnings on their taxes. Every dollar we win is ours to keep, whether its from casino games, poker, sports betting, the lottery, you name it.

The only Canadians who are required to report gambling winnings on their taxes are “professional” gamblers. According to the CRA:

“…an individual may be subject to tax on income derived from gambling itself, if the gambling activities constitute carrying on the business of gambling.”

A professional gambler who makes a living from poker, blackjack, race betting, etc. – even if that betting takes place online – is considered to be operating a freelance business. Thus claiming that income on taxes is mandatory. Of course, a professional gambler can list their losses in the deductions column, which makes tax time all the more interesting.

Oh yes, we have it pretty good here in the Land of Sweet Maple! But what about elsewhere?

Gambling Taxes in Other Countries

The United States is one of the worst in terms of gambling taxation. Not only do individual states scoop a hefty portion of the profits from operators, they take a mighty chunk from their gambling citizens, as well.

At US casinos, if you win a prize of $1,200 or more, you’ll have to hand about 30% of that over to the state and federal government. The actual rate depends on the casino’s location. States charge anywhere from 3-5%, while the federal tax coffers collect 25%.

Don’t even think about not claiming those winnings, either. The casinos require you to fill out a special W-2G form before they hand you the cash. That form is sent to the proper government office, so Americans can expect a swift audit if they convenient forget to claim it.

Over in Kenya, gambling operators are up in arms over their countries new gambling tax regime. As of January 1, 2018, casinos there must fork over 35% of their revenue. They aren’t allowed to write off any deductions, either.

That’s a far stretch from the 6% gambling tax in Tanzania, 9.6% in South Africa, and 13% in Uganda. Over in Germany, operators only pay a measly 5%, while the UK charges a reasonable 15%. But rarely do countries tax the players the way the US does.

Imagine paying for a lottery ticket issued by a government-run agency, winning millions of dollars, then being told you must hand 30% of that back to that government? I realize the point of a lottery is to raise money for the government, but ticket sales do that. Turning around and taxing the prize is beyond ridiculous. I’ll take Canada gambling taxes over the US any day!