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Gambling Winnings Tax In The UK: Laws And Regulations Explained

UK gamblers can keep their winnings because gambling winnings are not taxed in the UK

The world’s first recorded gambling law was passed by King Richard I (England) and Phillip II (France) in 1190. 

Much has changed since the 12th century and today there are a selection of UK laws and regulations to control all elements of gambling – including the taxation of winnings.

In this guide we explain if you can keep your winnings, how gambling organisations are taxed, and which laws and regulatory bodies keep them in check. 

Do casual UK gamblers pay tax on their winnings? 

Picture this: you head to a leading online casino, or visit a respected land casino, have a little luck, play out of your skin and score a huge cash win – only to then have to submit your winnings to HMRC and hand over some of your hard-won money. It would suck. 

Thankfully, though, the UK is one of the countries where you can gamble in the knowledge that there is no tax paid on your winnings.

Taxation on gambling winnings was ended in 2001 by Gordon Brown. As the Chancellor of the Exchequer, Brown decided to get rid of the General Betting Duty (GBD) – which imposed a 6.75% levy on casinos and saw many gambling organisations threaten to take their operations away from the UK. 

What this means is that no casual gambler in the UK will have their winnings taxed at either an online or land casino. 

Will I have to pay taxes on my winnings if I become a pro gambler?

It’s understandable (although surprising) that the UK government chooses not to tax casual gamblers, as for them it’s a fun way to spend their free time. But how does this work for people who gamble professionally – doesn’t the government tax all incomes? Not exactly, if you’re a gambler. 

The UK’s laws and regulations on gambling do not require professional gamblers to pay tax on their winnings. This means that if you have a huge win at an online casino, a successful time at a land casino, or lucky day at the bookies, you won’t have to give the government any of your winnings – in the UK. 

However, this does not mean that UK gamblers are exempt from tax on their winnings. Many other countries do tax gambling winnings – so, just because you can take all of your money away from a London casino, don’t expect to be able to do the same abroad. Do your research and establish what tax you can (or cannot) be expected to pay before gambling outside the UK. 

Do UK gambling companies have to pay taxes?

The great thing for gamblers, whether casual or professional, is that their winnings aren’t taxed. Casino companies are not afforded the same treatment, as their income is subject to tax from the UK government – the percentage of which depends on both the type of casino and the type of betting. 

UK online casinos pay point of income tax as part of the Remote Gaming Duty. This means that online casinos have to pay the UK government a percentage of their profits – at present, it’s 15%, with this rising to 21% on 1 October 2019. 

The amount of tax land casinos pay depends on both their earnings and the games that they offer. For example, land casinos pay 5-25% tax on the profits they make from slots, while it can be 15%-50% for games such as blackjack, poker, or roulette.

Casinos offering sports betting also pay 15% tax on the earnings they make from these wagers.

What are the main UK gambling laws? 

UK legislation is designed to keep gamblers safe and there are two primary acts that provide the legal framework for protecting them. 

Gambling Act 2005

There are three objectives to the Gambling Act 2005, as described by the UK government in its licensing objectives: 

  1. Preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime.

  2. Ensuring that gambling is conducted in a fair and open way.

  3. Protecting children and other vulnerable persons from being harmed or exploited by gambling.

A major reason for the introduction of the Gambling Act 2005 was to ensure that online casinos operating in the UK have a licence from the UK Gambling Commission, hence the UK government. 

Gambling (Licensing and Advertising) Act 2014

The Gambling (Licensing and Advertising) Act 2014 was introduced to make the legal framework of the Gambling Act 2005 more robust. It specifically targets remote online casinos that allow UK gamblers to place wagers on their games and betting facilities. 

The government’s legislative documentation outlines two specific areas covered by the Gambling (Licensing and Advertising) Act 2014

Licensing

  1. Licensing of remote gambling

  1. 2. Payment of Horserace Betting Levy by holders of remote operating licences

Advertising

     3. Repeal of existing offence of advertising foreign gambling

     4. Advertising of gambling by way of remote communication: Great Britain

     5. Offence of advertising unlicensed remote gambling: Northern Ireland 

How is gambling regulated in the UK? 

The UK government is responsible for keeping gambling in check and its regulatory body is the UK Gambling Commission. 

This organisation is an independent non-departmental public body (NDPB) and was set up as part of the Gambling Act 2005 – you will find its logo on the websites of all online casinos that operate in the UK. 

The UK Gambling Commission describes the scope of its regulatory interest as such: “We license and regulate the people and businesses that provide gambling in Great Britain including the National Lottery.” 

The UK Gambling Commission has the same three objectives as the Gambling Act 2005 and, in its own words, it meets its objectives in the following ways: 

“We set requirements for licensees in our Licence Conditions and Codes of Practice and carry out assessments to make sure that licensees are complying with our requirements. Where we find evidence of non-compliance, we act to address this. 

“In many cases, licensees revise non-compliant behaviour without the need for us to take formal action. In some cases, however, we use our regulatory powers to take enforcement action. Our Statement of principles for licensing and regulation provides more detail about our approach.” 

While gambling laws have existed in the UK since the twelfth century, the legislation and regulation of the practice is largely covered by policies and organisations brought into place during the 21st century. 

These are designed to keep UK gamblers safe by policing the way that casinos operate. What they are not designed to do is take away your gambling winnings through taxation. 

So, next time you’re in a UK land casino, bookies, bingo hall, or gambling at one of the best UK online casinos, rest assured that your money is safe from rogue operators and taxation.