One common question comes from online casino players is that whether they are going to pay their taxes or not in playing casino games. “What if we lose?”, “How the taxes deducted from our winnings?”, “Do they always deduct taxes every time we play online casino games?” These are the common confusion many gamblers are dealing with.
So, to start it depends on the gambling law that a particular country has specifically in managing an taxes from online casinos. But not all winnings are automatically taxed by the government. But it is always a player’s responsibility to understand everything about laws that are related to gambling so that they will be aware of how their country deduct money from their winnings. Here are the common processes that occur when getting a tax from online casinos and players (this is very important specially if you are a player from the United States).
In many countries around the globe, especially the USA, it is mandatory for a player to submit or share something from her/his winnings. Sometimes, it reaches to the highest rate which is 50%, the lowest is 30%. How do they know if you win? You are obliged to declare your money or else you will be questioned if they track your money in their audit. Every player is required to declare their money if they win from playing online casino games to the IRS (Internal Revenue Services) whether it is offset by loses or not.
Though the fact still remains that online casinos specifically from U.S. do not declare the amount of your winnings, and of course the federal law do not know if you win or lose, you still have the obligation to follow the law and declare it in your own because at the end, you will still end up explaining to the IRS where your money comes from because they will track your money through their audit.
If you are a big time or the what they call “high roller” player and choose to declare and pay your online casino tax, it will be reported as other income on U.S. tax returns. The process goes by submitting only the net of your winnings. Meaning, if you play blackjack and win $3000 from a $300 bet, that means you have to declare all $2,700.