The Interactive Gambling Act (IGA) 2001 was recently updated to outlaw so-called 'in-play' betting on sports in Australia. Some online sportsbetting sites do operate in Australia, mainly licensed. Online gambling tax When 80% of the adult population gambles, which is the case in Australia (and it’s the highest percentage in the world), the government is most likely going to tax you on it. Even when that’s not the case, most countries consider gambling winnings a form of income, and in turn will tax it as such. Gambling Income Tax in Australia Australia taxes professional gamblers income tax at a rate of 30%. This is not a concern to anyone other than those gambling as a profession / primary source of income. For all recreational players gambling is generally not considered income for tax purposes.

• Online Gambling Tax Australia 2019
• Australian Online Gambling Tax
• Online Gambling Tax Australia Online

1. In Australia, it is the gambling operators that pay tax, not the players. There are no situations in which Australian players pay any income tax on their winnings. The federal government views this as income from a hobby and the result of luck. The amount of tax the operators pay depends on the type of game.
2. Australian governments love gambling taxes. Could a case like the ATO vs Walsh change their minds on taxing punting wins? I’d say not, but it certainly makes this battle one worth watching.

He might not be on Australia’s rich list yet, but Tasmanian David Walsh is surely one of Australia’s most interesting high-net worth individuals.

In the last few years, Walsh has poured vast chunks of his fortune into the country’s largest private art museum, Hobart’s Museum of Old and New Art, which has almost immediately become known as Mona since opening in early 2011.

But unlike the property developers, media barons and miners that dominate Australia’s rich list, Walsh hasn’t made his money through conventional means – he’s a professional punter with what appears to be a brilliant record.

Kudos to The Australian Financial Review for a revealing series of articles on Walsh and his syndicate of punters who based themselves in a Hobart hotel called Waggon & Horses and wagered billions of dollars on racing and the lottery game Keno.

Now, it’s long been the mantra of the Saturday punter that gambling profits are tax free – just as gambling losses cannot be claimed as deductions.

But Walsh is embroiled in a case with the ATO that could turn that logic on its head.

The case, in the Federal Court, involves the Tax Office trying to hit Walsh with a tax bill for an additional $37.7 million for the 2004-06 financial years, plus interest, due to Walsh’s shareholding in the punters’ syndicate.

While Walsh has always argued these were recreational winnings, the ATO believes the fact that the syndicate set up three companies to provide it with statistical analysis and other services shows this was more than a simple punters’ club.

In a statement to the AFR, Walsh said the punters’ club members were not shareholders of the services companies and reiterated his position on the tax treatment of gambling winnings. It’s worth quoting him at length:

“To begin with, I have always treated the proceeds of my gambling as the ATO told me. Their opinion, sought a number of times, was that gambling winnings aren’t taxable. In fact, to my knowledge, no gambler has ever been assessed as taxable.”

“There have been frequent reviews and audits into my gambling, all of which have found that winnings are not taxable, perhaps in part because no one knows how to treat losses and deductible expenses.”

The last point is a very good one: If the ATO wants to tax winnings, should losses also be deductable? This case could set some very interesting precedents.

Interestingly, Walsh’s winnings would have been taxable in the United States, where wins on bingo, Keno, poker tournaments and some other forms of gambling are reportable and taxable in certain circumstances.

Australian governments love gambling taxes. Could a case like the ATO vs Walsh change their minds on taxing punting wins?

Online Gambling Tax Australia 2019

I’d say not, but it certainly makes this battle one worth watching.

James Thomson is a former editor of BRW’s Rich 200 and the publisher of SmartCompany and LeadingCompany.

Gambling Is Not Income, and Is Therefore Not Taxed

However, as much sense as it would make, Australia does not tax on gambling. This is because, legally speaking, placing bets is not considered a profession in Australia. It is pretty great to know that, whether you are gambling online or at a land-based casino, all those winnings are yours, and if you do consider yourself a professional gambler, you will not be considered one in the eyes of the Australian government. Unless you take offense to that for some reason, that is definitely a good thing, because you would essentially not be paying income tax on your professional income.

How Is It Not Income?

The Australian government defines gambling as an entertainment and leisure activity, and thus does not charge tax on it. Because it is a recreational activity, like, for example, playing rugby for fun, it would go against that mentality to tax it. Furthermore, winning is based on luck, as we all know (though some would argue that that isn’t true for some games, especially games like Poker where you are playing against other players). The mindset here is: With good luck comes bad luck. Therefore, if you do end up winning, you could very easily end up losing the next day. If you are taxed on winnings, you would have less than you won, and then if you lost that same amount the next day, you would end up losing more than you won. It can be deduced, by that logic, that this is the government looking out for its citizens’ best interest when it comes to an entertainment outlet. Another reason is that the casino operators are taxed, and they are not taxed lightly. So, rather than tax the players, who have a big disadvantage to the casino in terms of odds, they tax the casino. They do not, however, have the ability to tax a foreign online casino operator, which means that you nor that casino will be taxed. Instead, you will be subjected to other kinds of charges, detailed in the next section.

Australian Online Gambling Tax

What Kind of Charges Exist?

Online Gambling Tax Australia Online

I’m sure you are asking yourself, “So, if there are no taxes, does that mean I will not have to pay any fees whatsoever, and every dime I win at the casino will be in my bank account untouched?” The answer to that, at least when you are playing online, is no, not necessarily. Since there are very few online casino operators based in Australia — if any at all — you will have to pay a foreign transaction fee when you make a deposit or a withdrawal. This is going to also be dependent on what kind of banking method you use. For example, MasterCard and Visa will always charge you a foreign transaction fee, while Skrill is famous for either not charging a foreign transaction fee, or having one that is very small and also has a maximum cap. There is also the issue of currency conversion, as some of the best casinos do not offer the option to play in the Australian dollar. While the casinos that we recommend have services and features that are specifically tailored with the Australian player in mind, including the option to play in your native currencies, some casinos do not, in which case you will have to convert the amount on its way to your bank account. Skrill has famously low rates for that as well, as for Paysafe and Neteller.