How the tax authorities assess casino bonuses
In Australia, casino bonuses are a common tool for attracting and retaining players. They can be provided in the form of freespins, additional funds to the account, no deposit offers or cashback. The issue of taxation of such bonuses depends on in what form and under what circumstances they were received.
General taxation rule
For ordinary amateur players, bonuses and winnings from them are usually not considered taxable income if the game is entertaining, non-systematic in nature.
For professional gamblers and those gambling as a business, bonuses are treated as part of income and taxable.
Types of bonuses and their ATO tax treatment:
Not taxed by themselves.
Winnings from freespins may be taxed in professional play.
2. No deposit bonuses
They are considered an incentive to play, not income.
When used regularly for profit - included in the taxable base.
3. Deposit Match Bonuses
Not income, but winnings using them are subject to the same rules as regular winnings.
4. Cashback and return of losses
It can be interpreted as a reduction in costs, but in the case of professional activities - as part of the profit.
When bonuses can catch the ATO's eye:
Documents that are important to keep:
Recommendations to players:
Conclusion
In Australia, casino bonuses are mostly tax-free for amateurs, but can become taxable income for professional gamblers. The regularity of the game, the scale of the winnings and the ability to document the origin of the funds are key.
General taxation rule
For ordinary amateur players, bonuses and winnings from them are usually not considered taxable income if the game is entertaining, non-systematic in nature.
For professional gamblers and those gambling as a business, bonuses are treated as part of income and taxable.
Types of bonuses and their ATO tax treatment:
- 1. Free Spins
Not taxed by themselves.
Winnings from freespins may be taxed in professional play.
2. No deposit bonuses
They are considered an incentive to play, not income.
When used regularly for profit - included in the taxable base.
3. Deposit Match Bonuses
Not income, but winnings using them are subject to the same rules as regular winnings.
4. Cashback and return of losses
It can be interpreted as a reduction in costs, but in the case of professional activities - as part of the profit.
When bonuses can catch the ATO's eye:
- With significant amounts of winnings received through bonuses.
- When playing regularly using bonus offers for systematic earnings.
- When transferring bonus winnings to foreign accounts.
Documents that are important to keep:
- Screenshots or letters with the conditions for receiving the bonus.
- History of betting and casino transactions.
- Bank statements for deposits.
Recommendations to players:
- 1. If the game is professional, take into account bonuses in total income.
- 2. Capture bonus wins for correct reporting.
- 3. Avoid schemes for mass receipt of bonuses from different accounts, as this can be qualified as fraud.
- 4. If in doubt, consult a tax specialist.
Conclusion
In Australia, casino bonuses are mostly tax-free for amateurs, but can become taxable income for professional gamblers. The regularity of the game, the scale of the winnings and the ability to document the origin of the funds are key.
