Attention all lads who make decent money betting - do you have to pay tax?

[Bucking Bronco]

I had always been under the impression it was considered a "windfall through luck", but now when I Google I see things that it's dependant on:

• The volume and size of the bets - That would be pretty much anyone who is making a decent amount of money from betting
• Whether the gambler is engaging in betting for "pleasure or profit" - Again, anyone that makes decent money isn't going to be a mug who is thrill-seeking, instead they would be putting all things that involve increasing their bottom line first
• If the betting is done in a "systematised or organised way" - I don't think anyone could really be profitable unless there is at least some level of system or organisation to how they go about approaching their betting

I have had a pretty strong year this year on the punt (made about $70K), after a couple of reasonable years leading in, but nowhere as big, and am wondering how I could be affected.

Firstly, how does this affect tax when considered with annual salary made through a job, and secondly, with a bigger bankroll going forward, hypothetically, what happens to those in Australia who fit into the $120K+ a year tax bracket from their gambling, and are using it as their only form of income (IE it's essentially their job).

If true, successful bettors in Australia can enjoy:

Being taxed by both the government and Betfair/ Pinnacle, meaning it's almost impossible to have any edge on any bet you ever make.

What are the sharps of the forums' experience?

sohohoho NonPhixion

 

[NonPhixion]

I had always been under the impression it was considered a "windfall through luck", but now when I Google I see things that it's dependant on:

• The volume and size of the bets - That would be pretty much anyone who is making a decent amount of money from betting
• Whether the gambler is engaging in betting for "pleasure or profit" - Again, anyone that makes decent money isn't going to be a mug who is thrill-seeking, instead they would be putting all things that involve increasing their bottom line first
• If the betting is done in a "systematised or organised way" - I don't think anyone could really be profitable unless there is at least some level of system or organisation to how they go about approaching their betting

I have had a pretty strong year this year on the punt (made about $70K), after a couple of reasonable years leading in, but nowhere as big, and am wondering how I could be affected.

Firstly, how does this affect tax when considered with annual salary made through a job, and secondly, with a bigger bankroll going forward, hypothetically, what happens to those in Australia who fit into the $120K+ a year tax bracket from their gambling, and are using it as their only form of income (IE it's essentially their job).

If true, successful bettors in Australia can enjoy:

Being taxed by both the government and Betfair/ Pinnacle, meaning it's almost impossible to have any edge on any bet you ever make.

What are the sharps of the forums' experience?

sohohoho NonPhixion

From my understanding - no tax needs to be paid in any case with sports betting in Aus. With mortgages, all banks look at betting withdrawals as expenses, but the deposits don't register as a form of revenue. So while its not going to help getting a house loan, its not going to be taxable income. Thats just my basic understanding of it. I'd also imagine that it would be hard to account for the paper trail, if you made XXX amount of money off SB/Lads, id think you could argue that you also lost XXX money placing bets at EBT's.
Im no expert but yeah, i don't see many reasons why you would need to or would have to.

 

[Bucking Bronco]

Found this article: Is Poker Income Taxable in Australia?

A very relevant part of this directive is “There is no Australian case in which the winnings of a mere punter have been held to be assessable (or the losses deductible).”

Apparently no one in Australia has ever been taxed from profits made through sports betting.

So despite the absurdly misleading information you might see from government agencies, it is apparently just lip service.

Good article to read if anyone is ever looking for any clarity re their position.

 

[HeathySure]

The answer is no. I believe there has never been any pro punter that has had to pay tax because of claiming losses makes it very tricky for the government

 

[IKnowtheDog]

The answer is no. I believe there has never been any pro punter that has had to pay tax because of claiming losses makes it very tricky for the government

Pro punters are no different from people who play the stock market professionally..

 

[burge13]

Pro punters are no different from people who play the stock market professionally..

Is that right though? A trader can claim their losses, a gambler cant.

 

[4THAWN]

Yeah, as all have said no - you dont need to pay income tax on gambling winnings.

 

[Hamingja]

The big syndicates who get tote rebates are still considered to be gambling and tax free so pretty hard for the government to pot the little guy earning average wage punting

 

[IKnowtheDog]

Is that right though? A trader can claim their losses, a gambler cant.

We're talking professionals (no other source of income). I'm pretty sure the ATO wouldn't want a taxpayer to be getting $500k tax free.

Joe Hachem won his case against the ATO on the hobby v profession argument.

Presume if you're not paying tax on considerable regular gambling winnings you're never getting a bank loan then as you have no income.

 

[sohohoho]

Zeljko the only one to ever pay anything to the ATO I think.

nothing to worry about

 

[54Dogs]

Zeljko the only one to ever pay anything to the ATO I think.

nothing to worry about

Correct. Cut a deal

The Tax Office punt that flopped

Exclusive | It is a party David Steicke had long been waiting for. The professional punter has spared no extravagance in the planning of his lavish 50th birthday celebration.

www.afr.com

 

[juss]

It's a grey area.

The flat answer of "no you don't need to" isn't technically correct. It comes down to whether it's considered as a professional gambler / being conducted as a business.

Now in practice, the ATO probably never pursues any gamblers because it's probably not worth it as it could be contested in court and would be hard for them to prove.

What is apparently considered is:

• Whether the activity is undertaken in a business-like manner
• Whether the person has specialist knowledge associated with that gambling activity
• The scale of operations.

TLDR:

99% chance you don't have to worry about it, but it's not absolutely free the ATO asks questions.

Also, nice year on the punt Bucking Bronco !