If you go to any casinos or make any bets online in the UK, you’re probably aware that gambling in the country is 100% tax-free for the player.
There’s no possible scenario in which the government can take a cut of your winnings.
So how does the government get their share from the gaming industry? The answer is quite simple: they tax the casino operators instead of the players. Casino operators in the UK can expect to pay a tax of 15% on their profits. So how does the UK system compare to the rest of the EU? Here’s how gambling tax in the UK and Europe work.
In the Netherlands, the gambling industry was once monopolised by the government; however, this has changed in recent years. The Netherlands has now opened the door for foreign operators to start doing business in the country.
Compared to the UK, the taxation that applies to the operators is fairly steep. Casino operators must pay a 29% tax on gross gaming revenue. On top of this, they must also make a 1.5% contribution to the gaming authority and a 0.25% input into the addiction fund.
Unlike the UK, the Netherlands taxes players. In certain circumstances, Dutch players are obligated to report their winnings to the taxman.
Sweden is regarded to be a major player in the online gaming scene, so what do their gambling taxes look like? They’re fairly similar to the UK; Swedish casinos are obligated to pay a tax of 18% of their gross gaming revenue.
In order to do business in the country, you must also purchase a license. This can cost anywhere from €6,000 to €70,000. In Sweden, you’re not subject to any taxes as a player.
Greece is quite possibly one of the worst places for casino operators to do business in all of the EU. Not only are there very few gambling licenses available, but those who can get a license are subject to a massive 35% tax.
Despite the tax, a large number of key betting sites have expressed a desire to invest in the country. In order for them to do this, the Greek government will need to grant new gambling licenses.
While a lot of other EU countries apply a flat tax on gambling, the amount you have to pay in the Czech Republic depends on the type of operation you are running. For example, sports betting operators will need to pay a 23% tax. On the other hand, if you run slot machines, a massive 35% tax applies.
The Czech Republic also has some rather unique rules when it comes to gambling. If you are receiving financial assistance from the government, or if you have filed for bankruptcy, you are explicitly forbidden from gambling online.
In 2012, Italy issued 200 AAMS (Amministrazione Autonoma dei Monopoli di Stato) licences. Since then, they have enjoyed steadily increasing revenue from the gaming industry. One of the keys to their success has been their relatively low 22% tax rate.
As you can see, UK-based operators have gotten a fairly good deal. The 15% tax rate is significantly lower than in many other countries in the EU.
If you look across the whole of the EU, it seems that countries with the most successful gambling industries use a fixed tax rate on their gross gaming revenue, with no other additional charges.
In some cases, you might see iGaming operators relocate to another country in order to pay lower taxes. Governments see this as somewhat of a loophole, and many have implemented rules to ensure they can still collect their taxes.
For example, according to CasinoGuide, the UK has recently introduced a Point of Consumption Tax. With this tax, casino operators are still required to pay UK taxes when they serve UK-based players.
Because of these new measures, it has become more difficult to use “tax haven” loopholes when operating a casino site.