Gambling is the fastest growing sector in Europe and it will continue to grow thanks to legislation in this sector that provides a gateway to open up more markets. The European market is the largest online gaming market in the world. More than half of the more than €35 billion in gambling revenue was generated in the EU market. This is due to a number of factors, but the main ones include legislation, innovation, and IT services available in Europe. Sites like PlayersBest.com inform players about new casinos and betting sites.
The last estimated 2016 report on the European gambling market showed that the size of the European gambling market was estimated at over €14.3 billion but for an accurate and concrete report it is best to look at the annual reports of licensing authorities such as the Malta Gaming Authority (MGA) or the UK Gambling Commission.
The ever-faster development of the internet and apps is having a positive impact on the online gambling sector as the global gambling market is estimated to generate revenues of over €66.2 billion by 2023. You can see an example of a gambling website like Wetten.com to get an idea of what this booming industry is all about.
Each country has its own rules and in many countries, players have to pay taxes on the winnings they collect from online or physical gambling.
Every industry is subject to taxes and gambling is no exception, with taxes in some countries being very high. If you want to test it out, you can visit https://wetten.com/casino/netent/gonzos-quest/.
The main source of revenue for gambling taxes is betting and gambling itself, but some countries also tax players on the winnings they make, below we will illustrate and explain some of the main European countries and the differences in the taxes companies and/or players have to pay in relation to gambling.
The organization that regulates gambling is the National Gambling Office, so companies operating in Romania are required to pay 2% of the participation tax for organizing gambling, prize income, and from gambling the tax rate is 10%. Income from gambling is taxed by withholding tax. The tax is set in the form of a scale which can be found on the Ministry of Finance website. The obligation to calculate, withhold and pay the tax lies with the organizers/payers of the income. In addition to these revenues, companies must also pay a number of other fees to the ONJN, such as a vice fee of 400 euros per machine, an annual gambling authorization fee, a fee for obtaining a gambling license, a fee for obtaining a gambling license, a special fee for video lottery, a vice fee for slot machine gambling, administrative fees for applying for a remote gambling license and other fees depending on the request.
In Bulgaria online gaming has been regulated since 2008, currently, there are more than 15 companies licensed by the SGC. Players do not have to pay any fees but there are fees for companies operating in this field so for online casinos 20% of revenue, for physical casinos, there is a licensing fee of 100,000 leva + a monthly fee per machine. For the other categories, namely sports betting, lotteries, or bingo, a fee of 15% of revenue is charged.
Germany considers gambling in the true sense of the word gambling so taxes in this country are quite high although the legislation is one of the most difficult to understand both by players and operators.
Gamblers are obliged to pay 5% of the revenue, physical casinos have to pay taxes of up to 80% of the revenue to the state, online casinos have a VAT rate of 19%, sportsbooks whether online or physical are obliged by law to pay a tax of 5% of the bets made, slot operators not operating in casinos have to pay a tax starting at 12% which can reach up to 20% of the GGR value, while lotteries have to pay 16.66% of the stake.
The concept of lottery in Finland refers to slot machines, so taxation in this country is common to all forms of gambling.
Players are not taxed on their income with small exceptions whereas casinos and lotteries are required to pay a tax of 10% of GGR + 30% of winnings.
Legislation is not so lax in Austria and taxes can be as high as 85% of stakes. Lotteries are required to pay between 2% and 17.5%. Gambling revenue generated over 8% of Austria’s total revenue.
Denmark has one of the most rigorous gambling tax systems for physical casinos. As in Austria, gamblers are not obliged to pay taxes on gambling revenue, whereas physical casinos have to pay the following taxes: 45% of GGR, 75% if the amount exceeds DKK 4 million.
Lotteries pay taxes of 15-17.5% on winnings exceeding €26 and sports betting is taxed at 20% of GGR.
Within the UK the toughest laws apply to physical casinos which are required to pay a tax of 15-50% depending on revenue and online casinos are taxed 21% of revenue from October 2019 and are currently taxed 15% of the profit. Lotteries pay a tax of 15% of profit and bingo businesses only 10% of the profit. Individuals are not required to pay tax on their gambling revenue.
Individual gamblers in the Czech Republic do not have to pay tax on their gambling income, but legal entities, namely individual casinos, have to pay 19% profit tax + 35% income tax. For sports betting organizers the tax is 19 % profit tax + 23% income tax.
Taxation in France is strict while Monaco is seen as a tax haven for gambling. Gamblers in this country are taxed in the following way if they earn income exceeding 1500 euros they are taxed at 12%. Physical casinos are taxed up to 83.5% of revenue and lotteries 69.1% of stakes (minus winnings) + VAT of 19.6%.
If sports betting, horse racing, dog racing, or other such activities are also considered, they are taxed as follows: percentage of the total amount of bets + tax on social security contributions due.
Taxation in France covers every segment of life and even gifts received by friends or family are taxed.
If we have to sum up the top 10 countries in terms of gambling taxes we can say that Germany ranks first in Europe followed by France. As a ranking of countries, we have the following: Germany – up to 90%, France – up to 80%, Austria – up to 80%, Luxembourg – up to 80%, Denmark – up to 75%, Poland – up to 50%, UK – up to 50% GGY.