3 ms·

If I remember correctly (not a lawyer) gambling winnings ( inc lottery) are not taxable in the UK. Not that I ever won anything.

chippiewill 3y ago
Yes. The government actually owns a bank, NS&I, that offers a special account "premium bonds" that effectively pays interest in the form of winnings from a lottery which make it tax free.
petercooper 3y ago
Correct. Indeed, even things treated as gambling aren't taxed, such as financial spread betting. (Apparently this makes sense because if gambling wins were to be taxed then gambling losses should also be deductible, and since gambling is inherently a losing proposition, the tax authorities would lose more than they gained. I don't really buy this argument since they could just tax winnings and offer no deductions, but hey ho.)
- everforward 3y ago
  > I don't really buy this argument since they could just tax winnings and offer no deductions, but hey ho. I don't think this would make sense. If I walk into a casino with $200 and then proceed to lose $100 and win it back 10 times, then I lose it all and walk out, that tax law would say I had "won" and had to pay taxes on $1,000 even though any reasonable person would say I had actually lost $200. In practical terms, I think it would absolutely ruin gambling addicts. This makes it effectively impossible to actually net profit, and I'm doubtful they'll stop.
  - erhaetherth 3y ago
    but in the US it is taxed? i don't know how, I assume it's based on what you walk out with. or maybe just the big winnings? i don't know.
    - everforward 3y ago
      They are taxed, but losses are deductible. It's taxed basically the same as everything else. At the end of the year you tally your earnings and losses, subtract the losses from the earnings and pay taxes on that amount or $0, whichever is higher (i.e. you can't deduct more losses than you had in winnings). I googled because I was curious and found an article about it [1]. It's similar to PayPal/Venmo/etc. Once your winnings meet certain criteria, the casino has to give you an IRS form (W-2G) and they presumably send another copy to the IRS. The withholding part isn't super clear, but I guess under some circumstances they also withhold 24% of those winnings to pay federal taxes. 1: https://www.hrblock.com/tax-center/income/other-income/gambling-winnings-tax/ https://www.hrblock.com/tax-center/income/other-income/gambl...
- jpablo 3y ago
  Spain had this: Tax winnings but not deduct looses. It creates situations like these: https://www.chess.com/news/view/francisco-vallejo-chess-tax-poker https://www.chess.com/news/view/francisco-vallejo-chess-tax-...
  - I-M-S 3y ago
    > He called his treatment by the authorities "disgusting" as the administrators were aware that he actually made a loss, but nonetheless they claimed almost all of his savings. "Nobody is responsible for such craziness." Welcome to the modern Western society, in which employees have been reduced to litigation-avoidance automatons. No wonder so many people hate their jobs, stripped of any power to help or even just follow common sense.
- JackFr 3y ago
  Well the bettor losses are income to the book so they could be taxed there. The interesting thing there is if the book and the bettor are taxed at different rates. I know in some lotteries and sweepstakes they tax the pool, and so the winnings are tax free to the winner and the taxman invisibly still gets his cut.

chippiewill 3y ago

Yes. The government actually owns a bank, NS&I, that offers a special account "premium bonds" that effectively pays interest in the form of winnings from a lottery which make it tax free.

petercooper 3y ago

Correct. Indeed, even things treated as gambling aren't taxed, such as financial spread betting. (Apparently this makes sense because if gambling wins were to be taxed then gambling losses should also be deductible, and since gambling is inherently a losing proposition, the tax authorities would lose more than they gained. I don't really buy this argument since they could just tax winnings and offer no deductions, but hey ho.)

everforward 3y ago
> I don't really buy this argument since they could just tax winnings and offer no deductions, but hey ho. I don't think this would make sense. If I walk into a casino with $200 and then proceed to lose $100 and win it back 10 times, then I lose it all and walk out, that tax law would say I had "won" and had to pay taxes on $1,000 even though any reasonable person would say I had actually lost $200. In practical terms, I think it would absolutely ruin gambling addicts. This makes it effectively impossible to actually net profit, and I'm doubtful they'll stop.
- erhaetherth 3y ago
  but in the US it is taxed? i don't know how, I assume it's based on what you walk out with. or maybe just the big winnings? i don't know.
  - everforward 3y ago
    They are taxed, but losses are deductible. It's taxed basically the same as everything else. At the end of the year you tally your earnings and losses, subtract the losses from the earnings and pay taxes on that amount or $0, whichever is higher (i.e. you can't deduct more losses than you had in winnings). I googled because I was curious and found an article about it [1]. It's similar to PayPal/Venmo/etc. Once your winnings meet certain criteria, the casino has to give you an IRS form (W-2G) and they presumably send another copy to the IRS. The withholding part isn't super clear, but I guess under some circumstances they also withhold 24% of those winnings to pay federal taxes. 1: https://www.hrblock.com/tax-center/income/other-income/gambling-winnings-tax/ https://www.hrblock.com/tax-center/income/other-income/gambl...
jpablo 3y ago
Spain had this: Tax winnings but not deduct looses. It creates situations like these: https://www.chess.com/news/view/francisco-vallejo-chess-tax-poker https://www.chess.com/news/view/francisco-vallejo-chess-tax-...
- I-M-S 3y ago
  > He called his treatment by the authorities "disgusting" as the administrators were aware that he actually made a loss, but nonetheless they claimed almost all of his savings. "Nobody is responsible for such craziness." Welcome to the modern Western society, in which employees have been reduced to litigation-avoidance automatons. No wonder so many people hate their jobs, stripped of any power to help or even just follow common sense.
JackFr 3y ago
Well the bettor losses are income to the book so they could be taxed there. The interesting thing there is if the book and the bettor are taxed at different rates. I know in some lotteries and sweepstakes they tax the pool, and so the winnings are tax free to the winner and the taxman invisibly still gets his cut.