Winnings as a form of income: when to pay tax
Winnings as a form of income: when to pay tax
Current on: 11 August 2025
Short conclusion
In Australia, gambling winnings are not taxed for amateurs, but become taxable income for professional gamblers or in the conduct of activities related to making a profit from gambling on an ongoing basis.
1. ATO position
The Australian Taxation Office (ATO) treats gambling winnings as income if:
2. When winnings count as income
1. Professional activities
Regular winnings with sustainable profits.
Game according to the developed strategy, investment in training, participation in tournaments.
Availability of a business plan or financial management structure.
2. Commercial use of gambling
Arbitrage rates or bonus hunting as a constant source of profit.
Betting organization or working through an income sharing player pool.
3. International professional activity
Winnings in foreign tournaments and offshore casinos with system play.
3. When winnings don't count as income
A one-time game of online slots or bets for fun.
Irregular winnings with no systemic gains.
Jackpots and prizes received as part of the hobby.
4. Criteria used by the ATO
The frequency of the game is how regularly the player participates in gambling.
The volume of profit is whether income is stable and its share in the total financial balance.
Game methods - is there a plan, strategy, analytics.
Financial dependence - whether the player lives on gambling income.
5. Tax implications
For professionals: tax at rates for individuals, the ability to write off expenses (travel, commissions, equipment, software).
For amateurs: the absence of tax and the need to declare winnings, but the obligation to explain the origin of funds for large transfers.
6. Examples
Amateur: Player won AUD 80,000 playing once a month - no tax applied.
Professional: Income of 200,000 AUD per year from online poker alone - tax mandatory.
Arbitrator: consistently earns bonuses and rates according to the formula - income is subject to taxation.
7. Recommendations to players
Clearly understand your status - amateur or professional.
Keep a history of games and payments.
With regular profit - keep accounting records and submit a declaration.
If in doubt, request private ruling from the ATO to protect against controversial interpretations.
Conclusion
In Australia, the key difference between non-taxable winnings and taxable income is the purpose and consistency of the game. One-off winnings remain tax-free, but in professional or commercial activity, the ATO treats them as taxable income.
Current on: 11 August 2025
Short conclusion
In Australia, gambling winnings are not taxed for amateurs, but become taxable income for professional gamblers or in the conduct of activities related to making a profit from gambling on an ongoing basis.
1. ATO position
The Australian Taxation Office (ATO) treats gambling winnings as income if:
- The player acts systematically and for the purpose of making a profit.
- Gambling is a major source of livelihood.
- Running the game bears the hallmarks of business.
2. When winnings count as income
1. Professional activities
Regular winnings with sustainable profits.
Game according to the developed strategy, investment in training, participation in tournaments.
Availability of a business plan or financial management structure.
2. Commercial use of gambling
Arbitrage rates or bonus hunting as a constant source of profit.
Betting organization or working through an income sharing player pool.
3. International professional activity
Winnings in foreign tournaments and offshore casinos with system play.
3. When winnings don't count as income
A one-time game of online slots or bets for fun.
Irregular winnings with no systemic gains.
Jackpots and prizes received as part of the hobby.
4. Criteria used by the ATO
The frequency of the game is how regularly the player participates in gambling.
The volume of profit is whether income is stable and its share in the total financial balance.
Game methods - is there a plan, strategy, analytics.
Financial dependence - whether the player lives on gambling income.
5. Tax implications
For professionals: tax at rates for individuals, the ability to write off expenses (travel, commissions, equipment, software).
For amateurs: the absence of tax and the need to declare winnings, but the obligation to explain the origin of funds for large transfers.
6. Examples
Amateur: Player won AUD 80,000 playing once a month - no tax applied.
Professional: Income of 200,000 AUD per year from online poker alone - tax mandatory.
Arbitrator: consistently earns bonuses and rates according to the formula - income is subject to taxation.
7. Recommendations to players
Clearly understand your status - amateur or professional.
Keep a history of games and payments.
With regular profit - keep accounting records and submit a declaration.
If in doubt, request private ruling from the ATO to protect against controversial interpretations.
Conclusion
In Australia, the key difference between non-taxable winnings and taxable income is the purpose and consistency of the game. One-off winnings remain tax-free, but in professional or commercial activity, the ATO treats them as taxable income.
