Income tax and gambling: clarification
Income tax and gambling: clarification
Current on: 11 August 2025
Short conclusion
In Australia, gambling winnings are not subject to income tax for amateurs, but professional gamblers are required to pay income tax as normal income. The key is to determine the nature of the activity - hobby or business.
1. Basic principle of taxation
Amateurs: Winnings are considered random income and are not included in the taxable base.
Professionals: winnings are recognized as income from entrepreneurial activity and are subject to income tax.
2. Determining player status
The Australian Taxation Office (ATO) takes into account:
3. Taxation for amateurs
No withholding tax regardless of the amount won.
There is no need to declare one-time winnings.
Exception: if winnings are accompanied by regular activities that fall under the signs of business.
4. Taxation for professionals
Profits are subject to income tax on the current rate scale (or corporate rate for listed companies).
Possibility of writing off expenses: participation in tournaments, trips, equipment, analytical services.
Obligation to keep records of income and expenses.
5. Features for residents and non-residents
Residents: Pay tax on gambling income from both Australia and overseas.
Non-residents: Pay tax only on income earned in Australia.
6. Case studies
The player won AUD 100,000 in the lottery once - no tax is charged.
Professional poker player with an annual income of 250,000 AUD - tax required.
An amateur won the AUD 500,000 jackpot at an offshore casino - no tax is assessed but the transfer can be verified by AUSTRAC.
7. Recommendations
Clearly define your player status.
In professional activities - prepare tax reports.
Keep all documents confirming winnings and expenses.
In case of doubts about the classification of income, request private ruling from the ATO.
Conclusion
Income tax in Australia directly depends on whether the game is seen as entertainment or as a source of regular income. For amateurs, there are no taxes on winnings, but professionals are required to declare profits and pay tax on a general basis.
Current on: 11 August 2025
Short conclusion
In Australia, gambling winnings are not subject to income tax for amateurs, but professional gamblers are required to pay income tax as normal income. The key is to determine the nature of the activity - hobby or business.
1. Basic principle of taxation
Amateurs: Winnings are considered random income and are not included in the taxable base.
Professionals: winnings are recognized as income from entrepreneurial activity and are subject to income tax.
2. Determining player status
The Australian Taxation Office (ATO) takes into account:
- Regularity and consistency of the game.
- Availability of strategy aimed at stable profit.
- Use of analytical tools and bankroll management.
- Volume and frequency of transactions.
- If the game is the main source of income, it is recognized as a business.
3. Taxation for amateurs
No withholding tax regardless of the amount won.
There is no need to declare one-time winnings.
Exception: if winnings are accompanied by regular activities that fall under the signs of business.
4. Taxation for professionals
Profits are subject to income tax on the current rate scale (or corporate rate for listed companies).
Possibility of writing off expenses: participation in tournaments, trips, equipment, analytical services.
Obligation to keep records of income and expenses.
5. Features for residents and non-residents
Residents: Pay tax on gambling income from both Australia and overseas.
Non-residents: Pay tax only on income earned in Australia.
6. Case studies
The player won AUD 100,000 in the lottery once - no tax is charged.
Professional poker player with an annual income of 250,000 AUD - tax required.
An amateur won the AUD 500,000 jackpot at an offshore casino - no tax is assessed but the transfer can be verified by AUSTRAC.
7. Recommendations
Clearly define your player status.
In professional activities - prepare tax reports.
Keep all documents confirming winnings and expenses.
In case of doubts about the classification of income, request private ruling from the ATO.
Conclusion
Income tax in Australia directly depends on whether the game is seen as entertainment or as a source of regular income. For amateurs, there are no taxes on winnings, but professionals are required to declare profits and pay tax on a general basis.
