Betting & Gambling Tax in the UK – What do You Have to Pay, and When?

The UK gambling industry is a huge business. Many players love to have a punt and UK gambling sites are a significant source of income for the government. In 2023, there are betting tax laws in England and the rest of the UK. However, will you end up paying anything to the government?

The Betting and Gambling Act (1960) was the first bill to legalize betting outlets and bingo halls. By 1968, casinos were legalized, too. All paid the usual levies on revenue, but so did the players. A whopping 9% winnings tax was applied on anything won. The Betting and Gaming Duties Act of 1981 did little to change that. It made things easier for high-street bookies to offer services, and effectively outlawed other bookmakers by country that were offshore from advertising to UK players, but did nothing to alter the tax laws.

The first signs of change came in 2001, when then Chancellor of the Exchequer, Gordon Brown, announced the abolishment of the 9% levy. The tax on punters’ winnings was replaced by a 15% tax on bookies and casinos themselves. Brown did this as he feared that the UK Government was losing out to offshore casinos, who were providing their services to UK players without paying any duties at all. It is a move which has since been followed by most other major European nations.

Naturally, many companies shifted their business to Gibraltar, where a 1% levy was in place. However, a 2014 amendment to the 2005 Gambling Act (the one initiated by Brown in 2001), also stipulated that there would be a point of consumption tax on foreign gambling sites catering to UK players. The overriding rule change meant that any bookmaker or sports betting exchanges offering betting accounts to UK players had to pay the same 15% duty as their UK-based counterparts. Broken and defeated, they gave in.

The rest, as they say, is history. Where do the current laws leave you, though? Do gamblers pay tax in the UK, and what are the specific terms? Are gambling winnings taxable anywhere in the UK, or in just specific parts? It is time to look at the current gambling laws in place.

The current gambling laws stem from the same Gambling Act, albeit amended several times. The UK Gambling Commission now has full regulation over the industry, and one of the prerequisites for offering services to players in the UK is that licensed UK bookmakers must have a UKGC license. This naturally means that they must adhere to the 15% levy on revenue, as well as a string of other regulations aimed at promoting responsible, safe, fair and secure gambling.

Anybody in the UK can gamble (via any means) provided they are the legal gambling age. The gambling age in the UK is set to 18 years old. However, does HMRC want you to pay tax on gambling winnings, and what are the current tax laws on betting in the UK?

To date, betting tax is abolished for all UK players. This means that you do not need to pay tax on anything you win. The UK Government does care if you win £1 or £100 million. It doesn’t matter if you win at football betting sites in the UK (including 1 pound betting sites) or pocket your prizes via a lottery. UK players do not pay tax on their gambling winnings to the tax authority, HMRC (Her Majesty’s Revenue and Customs).

As mentioned, virtually all forms of gambling income are tax-free in the UK. These include winnings from:

• Slot games
• Poker and card games
• Video poker and instant win games
• Bingo, keno, lottery and scratch cards
• Prize draws and competitions
• Live dealer casino games
• Betting on sports

Even if you engage in arbitrage betting in the UK, you don’t need to worry about tax. As for UK tax on cryptocurrency betting, the rules are quite clear. You do not need to pay tax on anything you win when betting with cryptocurrencies. However, you are required to pay income tax on any money you make buying and selling digital currencies if that sum is over £12,500.

Do you get taxed on lottery winnings in the UK? You’ll be delighted to hear that the answer is no. You do not have to pay a tax when you purchase a lottery ticket, either online or in a land-based outlet. Is prize money taxable in the UK, then? No. Nothing you win or pay in relation to The National Lottery or Euro Millions is taxed in the UK.

However, we must point out that if you play foreign lotteries through online lottery sites, the rules may be different. For instance, if you were to play the Mega Millions or US Powerball online, and you won, you will most likely have to pay tax on your winnings in the currency of bookmakers in the US, as American lotteries are seldom ever tax-free. In a sense, you’ve “made your money” over in the United States. Lotteries which are UK-based are always tax-free, though.

The biggest bookmakers – UK based are required to pay tax. So, too, are betting exchanges in the UK, casinos, bingo sites, poker rooms and all land-based outlets. The UK gambling tax rate varies based on what business is being offered, revenue, and a few other things.

Here is a rough breakdown of UK taxes for gambling enterprises:

You might think that things would work a little different with spread betting in the UK. After all, spread betting does not offer fixed odds, as such. Instead, punters are wagering on outcomes, and it is arguably a more dangerous way to bet. Here’s how it works:

A bookmaker of cricket betting UK offers you a spread bet which states that England will beat Australia and score between 350 and 360 runs. You believe it will be 400 runs.

 You “buy” the spread bet for £1 (at 360 runs). If England scores more, you will get £1 (your stake) for however many runs England accumulate over 360. However, you will lose £1 for every run under 360.

Alternatively, you could “sell” the spread, which works the same way but in reverse. You’ll make your stake (in this case £1) for every run under the spread and lose your stake for every run over 360.

As you can see, there is a lot of risks involved with spread bets, but there is also a lot of upsides. Fortunately (if you like that sort of thing), there is no capital gains tax on spread betting, as with other gambling games.

If you have questions remaining, we’ll try to answer them in our easy to read FAQ guide. Let’s begin…

No, at least not in the UK. If you live in one of the several countries listed above, you don’t need to pay tax. However, if you live elsewhere in another country, you will need to check the gambling tax laws of your country.

For the time being, the United Kingdom is focused more on promoting responsible gaming, than altering tax laws. The current tax laws seem to work fine, and most operators are content with it.

There was talk of operators leaving the UK market over Brexit, but that is folly. UK punters love to gamble, especially on horse racing betting sites UK and from mobile betting sites so no operators will risk leaving one of the most valuable gambling markets in the world. The UK Government wants revenue from gambling and needs UK punters to bet, so they aren’t likely to alter the tax laws.

However, work is afoot with the UK Gambling Commission to ensure that operators provide safe and secure, responsible gaming policies. This is an ongoing process.

So now you know the score. The UK gambling tax laws are amongst the most flexible in the world. There is no betting in the UK (at least for players), and anything you win at online and land-based sites will not be subject to gambling tax in the UK, but the situation is different in Ireland gambling industry case, but for that, you can read our 2023 updated article.

This is no doubt music to your ears. As a player, all you need to do now is find top gambling sites (such as 5 pound betting sites) to play at to get started. On this page, you will find a plethora of new UK bookmakers and recommended domains which offer you great opportunities to gamble online. Get started playing at top UK casinos and sportsbooks and who knows, you could pocket tax-free winnings today.

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