[Jogador]

Hello everybody,

hopefully this matter isn't covered elsewhere.

I'm researching to find out which in which tax jurisdiction one can declare winnings from asian book brokers (like Sportmarket, Asianconnect etc) without any tax issues. My current tax jurisdiction (EU country) has a regulated betting market. Bookies are licensed and access to nonlicensed bookies (and brokers) is even prohibited by the ISPs.

Obviously winning accounts on licensed eurobookies get limited over here in no time, and I do use an asian broker. But since hopefully I'll continue being profitable, I want to see whether moving my tax residence elsewhere, would have me covered.

Has anybody experience regarding this that he wants to share?
Thank and sorry for the long post.

[Limited]

If ISP is blocking you to access IE Bet365, that doesn't mean anything. You can find plenty of mirrors that will work with your ISP. What you need to study is your taxes related regulation. Are winnings (winning bets - losing bets) considered as an income, do you need to declare the winnings from foreigner/offshore online bookmakers to your tax agency. ISPs specially those owned by states just listen to the government instructions, even they break all the rules about constitutional protected free use of internet.

[Jogador]

Thanks for the reply. To declare betting winnings in my current jurisdiction one has to supply a document that the licensed bookmaker issues (that mentions tax id, winnings etc). Obviously asian book brokers do not hold a license and thus do not issue any such document.

So my query is, where could I move my tax residence to, and not have an issue by making a living from profits made on asian book brokers.

[lonnie55]

I could be wrong but AFAIK there is no country in the EU (in the world?) which clearly greenlights sports betting as a profession. The reason is that professional sports betting based on the legal, regulated offer is virtually not possible (as long as you don't use hundreds and hundreds of scarecrows). It's not designed for professional betting.

So I think it is a legal grey zone pretty much in any country in the world and there are different opinions on whether or not professional sports betting is tax-relevant. In my country, Germany, tax lawyers will tell you 'it depends on every single case' but also 'there is not a single case of which I know where a player had to pay taxes'. So you just have to bear the risk, although the risk seems to be very low.

Are you from Portugal? How about the tax laws in your country? Did you ever speak to a tax lawyer? Are there precedents about players who had to pay taxes?


/ I just read your last post. You have to pay taxes on winnings from legal books?

[Jogador]

I'm not from Portugal. Although I have not consulted a tax lawyer yet (will do), given the licensing that exists for sports books, and given that its considered illegal to bet with non licensed bookmakers, I assume that winnings from unlicensed ones, would not be legal to declare.

Also, dont know about any precedents locally here.

[lonnie55]

Although I have not consulted a tax lawyer yet (will do)

Make sure you look for an experienced one with expertise on gambling

[Jogador]

You actually dont pay any taxes on it. More precisely, any bets taken, get taxed at the (licensed) bookie's side. So you declare winnings on the tax statement, but dont pay any actual tax. But to declare it, you need to provide a document issued by the licensed bookie that mentions the winnings.

The issue at hand is not about to pay taxes. My issue is about finding a jurisdiction where winnings from a broker are not considered basically illegal. For example, is it ok if you go buy an apartment in germany with money made from winnings on a bet broker?

[Jogador]

I will, though given the regulation/licensing of the bookie market, I would guess the answer would be "dont use unlicensed bookmakers".

/ goes to lonnie55's reply

[Optional]

I could be wrong but AFAIK there is no country in the EU (in the world?) which clearly greenlights sports betting as a profession. The reason is that professional sports betting based on the legal, regulated offer is virtually not possible (as long as you don't use hundreds and hundreds of scarecrows). It's not designed for professional betting.

^^^ this is the real crux of the issue.

When a govt issues gambling licenses they do it on the basis that all activity will be "gambling" with a built in mathematical margin for the bookmaker.

Under the definition it is not considered that is possible to make a sustained income from it. It's entertainment, with a cost.


Once you start arguing from the point of view of a "professional gambler", you are basing your views on a concept that does not fit within the law/licensing conditions.


In my opinion, a jurisdiction with no, or very few, gambling regulations is where you need to be.

[lonnie55]

For example, is it ok if you go buy an apartment in germany with money made from winnings on a bet broker?

Maybe, maybe not. Depends on the federal state, the city, the tax authorities, the judge, just on every single case.

The question has been bothering me for years. The two things I can tell you for sure are

- I did not meet or heard of a professional player who had to pay taxes yet
- I did not meet a lawyer who advised or heard of a professional player who had to pay taxes yet.

There is a pretty interesting article where a tax lawyer explains why she thinks professional betting IS NOT taxable:

Translated version: https://translate.google.com/transla...ten-gewerbe%2F
Original version: https://www.ahs-kanzlei.de/2019/03/e...etten-gewerbe/


(BTW: Poker is a very different animal and there have already been cases and a judgement by the highest court that declared earnings from tournament-based poker as tax-relevant)

[Jogador]

^^^ this is the real crux of the issue.

When a govt issues gambling licenses they do it on the basis that all activity will be "gambling" with a built in mathematical margin for the bookmaker.

Under the definition it is not considered that is possible to make a sustained income from it. It's entertainment, with a cost.


Once you start arguing from the point of view of a "professional gambler", you are basing your views on a concept that does not fit within the law/licensing conditions.


In my opinion, a jurisdiction with no, or very few, gambling regulations is where you need to be.

Thanks for your reply. Can you point me to such a jurisdiction?

[Dis28]

Jogador what country you from? I understand your situation would like to contact you but cant send pm lol

[Optional]

Thanks for your reply. Can you point me to such a jurisdiction?

Costa Rica or Panama are popular with Americans.

[Jogador]

Thanks everybody for your replies. I am based in the EU, Dis28 (rather not say country). I suppose I need to gather more Forum activity points for pm's. I'll text you as soon as I do.

Also, regarding jurisdictions, I am under the impression that that Dominican Republic is among those that are friendly to the endeavor, but I have not confirmation on it. I also "heard" that Scandinavian countries offer such possibility. But thats also unconfirmed.

[Brooklyn]

For now, you don't necessarily*** need to move overseas yet to find "no/few regulation" country.

Curently "offshore gambling friendly" Euroepan Union countries are: Austria, Bulgaria, Croatia, Estonia, Finland, Latvia, Lithuania, Luxembourg, Malta, Norway, Romania, Slovakia.

And several non-European Union member countries like: Belarus, Bosnia, Liechtenstein, Macedonia, Montenegro...


***Note that regulations can change in any given moment especially in Eurepan Union countries as Euroepan Union is recommending (read forcing) regulations for their member countries for several years now already. And it is just a matter of time when all of them will become fully gambling regulated countries.

[Dis28]

Where would you put ireland? You didnt mention ireland for any specific reason?

[ichiro4thehall]

Jogador, you are giving the tax collecting authority in your country WAY WAY WAY too much credit.

If you do make most of your money from gambling and need some safe explanation for this there are obvious ways to do this. In my experience it is completely unnecessary.

You Spanish? If so which region are you living in?

[ichiro4thehall]

For now, you don't necessarily*** need to move overseas yet to find "no/few regulation" country.

Curently "offshore gambling friendly" Euroepan Union countries are: Austria, Bulgaria, Croatia, Estonia, Finland, Latvia, Lithuania, Luxembourg, Malta, Norway, Romania, Slovakia.

And several non-European Union member countries like: Belarus, Bosnia, Liechtenstein, Macedonia, Montenegro...


***Note that regulations can change in any given moment especially in Eurepan Union countries as Euroepan Union is recommending (read forcing) regulations for their member countries for several years now already. And it is just a matter of time when all of them will become fully gambling regulated countries.

Brooklyn, you are mixing up industry regulation and taxation. A country can have a regulated gambling industry and still require gamblers to pay income tax.

It is a very grey area in most EU countries simply because historically so few people earned a living this way and in EU countries if something is not explicitly illegal then it is legal. But governments are not a fan of people earning money and not paying tax on it as a rule and so gamblers as a whole tend to stay under the radar so as not to become a new test case.

[Brooklyn]

Brooklyn, you are mixing up industry regulation and taxation. A country can have a regulated gambling industry and still require gamblers to pay income tax.

I understand what you're saying and I agree with everything you wrote.

But I was more reffering to OP's post #7 where he pointed out that his issue is not about paying taxes, but to find a jurisdiction where winnings from betting brokers are not considered illegal. And currently in EU the forementioned countries are the ones, that would fit the criterias he is looking for.

[tingasdt]

In Spain,

*gaming revenues are taxed, 19/47% is paid according to income segments / scales.

*The state lotteries pay 20% from 10000 euros
*The professional game is not regulated as an activity
*It is only allowed to offer game to licensed operators, preventing and blocking "illegal" websites
*The pro player has no national alternative in terms of exchanges or sportsbook Pinnacle type so he seeks to access some known Asian brokers and for now his tax obligation is to declare that income.

The problem comes that there is a legislative possibility to regulate that will prosecute and punish the player who accesses illegal play and therefore will further strengthen the possibilities of pro play within the Spanish territory

Of course everything comes to consider sports betting as in most jurisdictions comparable to purely recreational game models.

[Jogador]

Jogador, you are giving the tax collecting authority in your country WAY WAY WAY too much credit.

If you do make most of your money from gambling and need some safe explanation for this there are obvious ways to do this. In my experience it is completely unnecessary.

You Spanish? If so which region are you living in?

Thanks for the replies everyone. Hopefully you are right about me giving credit unnecessary. Still I'd rather be safe then sorry, especially given that all bank/transfer records are permanent and reported (FATCA). And as slow and dumb local tax auth may be, they only need to catch up once.

[pythonic]

In Europe the UK is an exception in that they have a regulated gambling market and the tax authorities state explicitly that they don't tax gamblers.
Unfortunately they also have strict policies against brokers / asian books (because they don't pay taxes, I guess).

[Jogador]

True. Sportmarket recently moved to the Isle of Man from Malta. Yet they dont allow for UK based customers. Side note, I have contacted some of the brokers regarding my query. No concrete answer.

[Dis28]

In Europe the UK is an exception in that they have a regulated gambling market and the tax authorities state explicitly that they don't tax gamblers.
Unfortunately they also have strict policies against brokers / asian books (because they don't pay taxes, I guess).

But there are also 'rumours' if you are 'professional' and your only income is from gambling then youre entitled to pay tax even on the UK??
Also, does anyone knows how this can compare specificaly to ireland or malta? Thx

[Limited]

Isn't UK tax free if u earn under 50k GBP per year?

[tingasdt]

A solution to the problem of the non-recreational player, the professional, would be that in their respective jurisdiction they should be enabled as a "professional license" to operate in all that betting market even if it had foreign regulation. Same that financial or stocks markets.
In this way, any player could at the same time ... contribute to the treasury of his country and at the same time submit in case of disputes to the legislation of the operator's country that has allowed him to operate ... the law of supply and demand would make rest.

That is, a professional would pay taxes on his earnings in the state in which he resides but the rules and regulations to apply in his operation would be that of the operator's own country / broker that allows that operation ...

Of all the pro is known that many of these agents have a much better reputation than the vast majority of sportsbook ...

[lonnie55]

Actually a very good thread but there is a certain irony to it: Imagine you live in a country which is determined to be the paradise for pro bettors because of zero-tax rules and no prosecution whatsoever, would you tell someone about it? The more people hear about it, the more could consider to move or register a residence in this country. At a certain point, the country could say 'wait a minute, there are more and more bettors coming to our country to exploit our zero-tax policy, maybe we should change the rules to get a piece of the growing cake'

So maybe it's better not to tell anyone if you actually found the paradise

[lonnie55]

Actually a very good thread but there is a certain irony to it: Imagine you live in a country which is determined to be the paradise for pro bettors because of zero-tax rules and no prosecution whatsoever, would you tell someone about it? The more people hear about it, the more could consider to move or register a residence in this country. At a certain point, the country could say 'wait a minute, there are more and more bettors coming to our country to exploit our zero-tax policy, maybe we should change the rules to get a piece of the growing cake'

So maybe it's better not to tell anyone if you actually found the paradise

Something like that happened with poker: For some reason, Austria has become "the paradise" for poker pros in the perception of Germans, so more and more German poker pros moved to Austria. Turns out that Austria actually has the same laws like Germany. The only difference: no prosecution until that point.

[Jogador]

Actually a very good thread but there is a certain irony to it: Imagine you live in a country which is determined to be the paradise for pro bettors because of zero-tax rules and no prosecution whatsoever, would you tell someone about it? The more people hear about it, the more could consider to move or register a residence in this country. At a certain point, the country could say 'wait a minute, there are more and more bettors coming to our country to exploit our zero-tax policy, maybe we should change the rules to get a piece of the growing cake'

So maybe it's better not to tell anyone if you actually found the paradise

Yep. I had this conversation already with few pro players I happen to know. Players that have been much longer than myself in the game and presumably have much more profit made. Evidently nobody seems to worry about Skrill (EMI) sending any data over... My guess is they dont wanna share, because like you said.. why take the chance of spoiling it.

[pythonic]

But there are also 'rumours' if you are 'professional' and your only income is from gambling then youre entitled to pay tax even on the UK??
Also, does anyone knows how this can compare specificaly to ireland or malta? Thx

The rules are very clear:
"The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade"

An exception would be if you are for example a professional poker player who recieves money for appearing in TV or promotions.
https://www.gov.uk/hmrc-internal-man...anual/bim22017

[tingasdt]

That is a logical stance in that jurisdiction. Legislation that does not tax gambling gains as considered habit / consumer is totally consistent and therefore the figure of the pro player has many more advantages as long as he can develop his activity with a good offer ...
The problem in my opinion is when you are taxed about 47% of your earnings when these are also precisely your main source and activity for which you earn a living and contribute to the support of your State.

The rules are very clear:
"The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade"

An exception would be if you are for example a professional poker player who recieves money for appearing in TV or promotions.
https://www.gov.uk/hmrc-internal-man...anual/bim22017

[lonnie55]

In Europe the UK is an exception in that they have a regulated gambling market and the tax authorities state explicitly that they don't tax gamblers.
Unfortunately they also have strict policies against brokers / asian books (because they don't pay taxes, I guess).

What does that mean they have "strict policies against brokers"? Do they geo-block them? Do they prosecute them? Do they even come after the players who use them?

[pythonic]

Pinnacle for example excludes british customers in their T&Cs and blocks british IPs. They tried to get a licence in the UK (again) a while ago but it seems it didnt work out.
I have no idea if they go after the players and have never heard of anything like that, but it appears to be more complicated to get an account in the first place.
As I said, I believe that this is because gambling is tax free for gamblers but bookies have to pay taxes .
Still, the situation is different to Germany where you have that ridiculous 5% turnover tax on the one hand and a huge gray market on the other hand.

[lonnie55]

It seems like UK is pretty close to a paradise for pro gamblers after all.

but it appears to be more complicated to get an account in the first place.

There are various workarounds for that kind of problem, e.g. secondary residence in another country, third party accounts etc

[pythonic]

Yes, it's pretty good and I like the stable regulation. The only problem for pro gamblers from the EU is that with Brexit coming it will be more difficult to get a residency permit in the UK, especially if you don't have a regular job in the UK.