Gambling is a strictly regulated activity even in those jurisdictions in which gambling operations are absolutely legal. One of the key reasons for the legalization of gambling for the authorities is the generous tax revenues from this activity.
In some cases, the rate of tax on gambling can reach 50-60%. As a rule, the amount of deductions in this case varies depending on what kind of gambling services we are talking about. Thus, the tax rate on betting services may differ from that charged on the activities of lottery operators or land-based gambling establishments.
In addition, the tax rate can be calculated from the profit or turnover of the gambling operator, or formed on the basis of specialized equipment.
Gambling taxation in Great Britain
Starting from October 2019, the tax rates on remote gambling in the country has increased from 15% to 21%. The tax increase was driven by the need to make up for budget losses after the government cut the top rate on FOBT to £2.
In addition, the Football Association of England made a proposal to introduce a so-called football tax, which, according to representatives of the sports organization, should affect betting operators. However, the idea was not supported.
Despite all the protests of gambling operators, tax rates on gambling operations have been increased in the country since January 1, 2019.
The tax rate on the provision of online casino services was increased from 20% to 25%, on betting operations – from 22% to 24%, online betting sites are required to pay a tax of 22%. Land-based sports betting shops are obliged to pay a tax rate of 20%.
Gambling operators of Georgia pay tax deductions according to the amendments made to the relevant code in 2017.
Operators engaged in the offline segment are obliged to pay an annual and quarterly state fee.
The peculiarity of gambling business in Georgia is that the amount of fees depends not only on the type of gambling activity, but also on the localization of gambling facilities. The annual state fee is gel 5 million ($2 million). Quarterly government fees vary depending on the specific type of activity and location.
Malta and Curacao
Malta and Curacao are qualitatively different from European jurisdictions in terms of taxation, which, in turn, is one of the key factors of attractiveness for gambling business.
The uniqueness of Malta lies in the fact that when drafting tax legislation, officials managed to combine compliance with all the rules of doing business in the EU with an acceptable tax rate of 5% of profits.
Under the Maltese system, to avoid the effect of double taxation, a tax on companies at a rate of 35% on profits, but the ultimate beneficiary (non-resident of the state) receives a refund of 30%.
Curacao is a jurisdiction that is renowned for its acceptable tax laws. The advantage of a 2% tax on net profit on gambling attracts many entrepreneurs.
By the way, the Czech Republic is also planning to revise the tax legislation, increasing the rate on lottery operations to 23%.