How Gambling Winnings Are Taxed In The UK

Gambling winnings are not taxed in the UK. Regardless of whether you win £100 or £100k, you do not have to pay tax to inland revenue. This is surprising, given that the likes of the US, France, and Macau tax gambling winnings. However, it’s not unusual; Germany, Australia, and Canada are also tax-free when it comes to gambling.

The same rules apply whether you are a UK national or live in the UK with a visa. Tax freedom is also offered no matter what game you earn your winnings from, whether it be in-person casinos or online slots, poker, bingo, or lottery.

Are there any gambling tax laws in the UK? 
There is currently no law in place that states that UK gamblers must pay taxes on the winnings they earn from gambling. There is no major gambling tax law in place, and neither are there specific ones pertaining to online casinos, sports betting, bingo, lottery, or any other form of betting.

This means that when playing slots, live games, or video poker on a quick withdrawal casino, you do not have to worry about how tax will impact your big sign-up bonus or a high-value prize. When you play any one of the casinos picked out by Ben Horlock, you get to keep all of your winnings and spend them how you like.

Even if you’re using a modern payment method to play the online casino, such as an e-wallet or crypto, no tax rules apply. Crypto casinos are not only legal in the UK, but they also fall under the nation’s tax-free rules.

Similarly, if you buy a winning lottery ticket and win a significant amount from the National Lottery, you’ll receive the exact amount you won, without any tax deducted.

The same rules apply to sports betting. If you place a wager on the winning horse in the Grand National, the significant amount of money you’ll win is all yours – not even a penny of your winnings is required to go towards taxes.

Was there ever a gambling tax in the UK? 
The UK has not always been a tax-free haven for gamblers. From 1960 to 2001, tax from gambling winnings had to be paid to Inland Revenue.

Private casinos and sports betting shops were legalised through the Betting and Gaming Act 1960. This act also introduced a gambling winning tax of 9%. This meant that any winnings earned through sports betting were subject to a significant tax deduction. Interestingly, the bettor had the option to pay the 9% upfront on the stake or later on his winnings.

However, UK gambling law was amended in 2001 and the tax was removed. It was scrapped due to the significant amount of offshore betting site options that were becoming available to UK bettors.

During the 1990s, major UK bookmakers such as BetVictor foresaw how important online gambling would be in the future. These companies moved their operations to the likes of the Isle of Man, Gibraltar, and Malta to take advantage of the tax freedom found there.

Given that UK players didn’t have to pay taxes when playing on these gambling sites, the offshore market grew massively – so much so that UK-based gambling options began to struggle.

To overcome this dilemma, the UK government decided to scrap taxes on gambling.

How gambling companies are taxed
Given that the UK government does not impose taxes on casino winnings, they rely solely on the taxation of the casino companies themselves. All gambling companies, whether they offer online or in-person betting services, must pay a standard rate of 15% of their total earnings to inland revenue.

However, this tax rate increases depending on how much they earn. For example, gaming institutions must pay 40% in tax should they earn more than £6,845,000 in gross gaming yield.

So, while gamblers are not taxed directly, their contribution to the gambling business is in some way taxed. Knowing that they have to pay these taxes, gambling companies factor tax into betting odds, deposit and withdrawal charges, transfers, and so on.

With around 150 brick-and-mortar casinos based in the country, 175 UK-based casinos, and countless other betting facilities, the country makes a significant amount of money through betting taxes.

Between 2024 and 2025, the Office for Budget Responsibility estimates that £3.6 billion will be made from gaming and betting duties. 

How the UK differs from other countries 
The UK, as well as countries like the UK, Australia, and Canada, do not have to worry about gambling tax. However, this is not the case in the US, where there is a gambling tax flat rate of 24%. France taxes slightly less, with an 8.5% tax on sports betting and 2% on each poker prize pool.