Sports betting is a common pastime in the UK, with millions of people placing wagers on events ranging from football and horse racing to basketball and tennis. But when it comes to winnings, many bettors wonder whether they need to pay tax. Understanding how taxation works for sports betting is essential, especially for those who bet regularly.
Is Sports Betting Taxed in the UK?
Unlike some countries where gambling winnings are subject to taxation, the UK takes a different approach. Bettors do not have to pay tax on their winnings, regardless of whether they place a bet online or at a bookmaker’s shop. This is because the government taxes the bookmakers rather than the players.
The system changed in 2001 when the UK removed the old betting duty that required bettors to pay a 9% tax on their winnings. Now, bookmakers pay a 15% tax on gross gaming revenue under the Remote Gaming Duty (RGD) for online betting and the General Betting Duty (GBD) for land-based bookmakers.
How Bookmakers Handle Betting Tax
Since bookmakers are responsible for paying tax, they account for it within their odds and overall business operations. This means the payout you receive already factors in any taxation the bookmaker needs to handle. Whether you’re placing bets on sports betting or checking basketball odds, your winnings are yours to keep without deductions.
Are Professional Bettors Taxed?
While casual bettors do not need to worry about taxation, the situation is slightly different for those who bet professionally. In the UK, betting is generally considered a recreational activity rather than a trade, so even high-stakes bettors do not pay income tax on their winnings. However, if a person is betting in a way that resembles a business—such as staking large amounts with systematic betting strategies for long-term profit—the HM Revenue and Customs (HMRC) may review their activity.
Professional gamblers who earn a living solely from betting may not be subject to direct taxation on winnings, but they also cannot deduct gambling losses from their taxable income. This differs from business owners, who can typically offset expenses against revenue for tax purposes.
What About Betting Exchange Profits?
Betting exchanges operate differently from traditional bookmakers because they allow players to bet against each other rather than the house. Platforms like Betfair charge a commission on net winnings, but this does not count as tax—it’s simply a service fee. As long as you are betting recreationally, your winnings from betting exchanges remain tax-free in the UK.
Do You Pay Tax on Overseas Betting Winnings?
If you place bets with an overseas bookmaker, you might wonder whether the tax rules are different. For UK residents, as long as the bookmaker is licensed by the UK Gambling Commission, the same tax-free principles apply. However, if you place bets with an unlicensed offshore bookmaker, taxation rules may depend on that country’s laws. Always check whether a bookmaker is licensed before placing bets.
How Are Casino Winnings Taxed?
The same rules that apply to sports betting also apply to other forms of gambling. Whether you win money playing in-play sports betting, blackjack, roulette, or slots, your winnings are tax-free in the UK. Like sports betting, casinos and gaming platforms pay tax through licensing fees and duties rather than passing costs onto players.
Are Winnings Tax-Free for High Rollers?
Whether you win a small amount on a football bet or a large sum on a horse racing accumulator, the tax rules remain the same. The UK does not differentiate between small and large betting amounts when it comes to taxation. So even if you win six figures on a bet, you do not need to declare it to HMRC.
What If You Move Abroad?
If you are a UK resident but decide to move abroad, tax rules on sports betting might change depending on your new country of residence. Some countries tax gambling winnings, so it’s important to check the regulations where you live. In the US, for example, gambling winnings are considered taxable income, meaning players must declare and pay tax on them.
What About Sports Betting Businesses?
While individual bettors do not pay tax, betting operators have several tax obligations. Licensed bookmakers in the UK pay:
- General Betting Duty (GBD) – Applies to fixed-odds betting, including sports betting.
- Remote Gaming Duty (RGD) – Covers online gambling revenue.
- Machine Games Duty (MGD) – Applies to fixed-odds betting terminals in betting shops.
These taxes ensure that the government generates revenue from gambling activities without directly taxing bettors.
Can You Claim Losses on Sports Betting for Tax Purposes?
Since gambling winnings are not taxable, losses cannot be claimed against taxable income. Unlike business expenses that can be deducted from profits, betting losses remain the bettor’s responsibility.
Final Thoughts
For UK bettors, sports betting remains tax-free, whether you’re placing bets on football, horse racing, or basketball. While bookmakers pay tax on their profits, individual players do not need to worry about reporting winnings to HMRC.
For those who bet regularly, it’s worth understanding how bookmakers structure their odds to account for taxation and operational costs. If you’re betting with offshore operators or considering moving abroad, it’s always best to check how taxation applies in that specific location.
For a regulated and secure betting experience, explore sports betting options at 7bet, where you can place wagers confidently and enjoy tax-free winnings.
Betting is only available to participants above 18 years. Please bet responsibly. BeGambleAware.org