3 Rules All Gamblers Should Know About Online Casino Taxes – 2024 Guide

Source: finance-monthly.com

Online gambling has attracted way more players than before during the lockdown caused by the COVID-19 pandemic. Just think about it, going to the land-based casinos wasn’t possible, they were all closed. Thankfully, we can see that the market has offered enough capacities to fill this gap.

If you take a look at all the types of online casinos, you will see that there are many of them. We are talking about those who offer you the possibility to use cryptos and those who offer a wide array of different bonuses to attract the players. One of the most prominent bonuses out there is certainly no deposit bonus.

With the increase of players who visit these sites, we can see that the need for regulation skyrocketed in all the countries in the world, especially in the EU. One of the most important regulations revolves around taxes. Therefore, we would like to name the most significant points you need to be aware of if you come from the United States.

1. Reporting the Winnings

Source: edgefinancial.com

It doesn’t matter how much money you have won in an online casino, you’ll have to report it to the IRS. Because of the current regulation, we can see that gambling winnings are reported as “other income”. In case your winning wasn’t money, the value of that item or service will be calculated to the market’s price.

We can see that many people believe that they don’t need to do that when they win small amounts. But this is not the case. If you have won $200, you should report the complete sum. That way, you can avoid many problems caused by you not doing this.

2. Possible Withholding

Source: tubefilter.com

The next rule we would like to address is the possibility of the site’s withholding your winnings. It happens when you have won three hundred times more than you have betted. The percentage of your winnings that you cannot withdraw is 24%. The reason why this happens is this sum will be committed to tax.

At the same time, the gambler will need to sign a document where the winnings are confirmed. It needs to be said that this rule doesn’t apply only to online casinos, it is effective in all sorts of gambling. Since this is something unavoidable, you shouldn’t try to cheat your way out of paying tax.

3. Nonresident Gamblers

Source: cpajournal.com

Last but not least, we would like to say that nonresidents are susceptible to this regulation. The percentage of the winnings they are required to pay is 30%. Many make the mistake of believing that not being residents of the United States can help them lower the rate.

However, this is not possible, except in one case. Since a vast majority of nonresident players come from Canada, these two countries have a tax treaty with each other. Because of that, Canadians can deduct their losses.

The Conclusion

Knowing what your obligations are while gambling is an absolute must. Here, you can take a look at some of the most significant rules you need to fulfill.