In many countries players are required to pay tax on their casino winnings. While this may seem unfair, giving a portion of your profits to the government is what casinos have been doing for years. In countries and states where gambling is legal, land-based and online casinos pay tax on their Gross Gaming Revenue also known as GGR Tax. This is how the local communities and the economy benefit from licenced and regulated casino gaming. It is the reason why many countries actually encourage the development of large-scale casinos and resorts.
Figuring out the percentage of GGR tax is something the government decides which can be a tricky thing to do. On the one hand, the government wants to benefit from the casinos sin tax but on the other, they don’t want to go overboard and discourage new business. Somewhere in between is a delicate balance that brings in enough revenue, while keeping the industry growing. Governments all over the world constantly tinker with their tax rates in relation to the growth of the industry and the demands of the economy.
A Delicate Balance
As you can imagine, this can lead to completely different tax rates depending on where the land based, online or mobile casino is based. For example, in Kenya, the government recently approved a massive 35% tax rate on all casinos, lottery operators and gambling-based operations. Coming from a 12% standard, this was a huge hit for the casinos, but not as bad as what they were expecting which was scheduled to be around 50%. The reason for the jump was to improve the economy with the tax revenue and discourage the youth from finding a career in the gambling industry.
In stark contrast, Cambodia is actively looking to attract casino investors. Their aim is to bring in as many investors as possible by reducing the GGR tax to around 5% or 6%. This is one of the lowest tax rates anywhere in the world. The government has realized that this is a nation with a burgeoning gambling community and want to cash in on the deal. In 2015 and 2016, Cambodia saw a 38% increase in gambling revenue and want to grow this number without harming current business.
Countries with High GGR Tax Rates
These are two simple examples of how governments control the GGR tax in order to affect the economy or the people. While things might be hard for the Kenyan operators, there are at least a couple of countries that impose higher taxes on their operators. Here is a short list of some of the highest taxed nations.
- Germany – As high as 90%
- France – 80%
- Austria – 80%
- Luxemburg – 80%
- Denmark – 75%
- Poland – 50%
- The UK – 50%
- Australia – Up to 45% in some states
- Macau – 39%
- Kenya – 35%
As you can see, Germany might have one of the strongest gambling economies, but it also has one of the highest taxation of any country, anywhere in the world. In the UK, casinos are taxed according to their revenue size. Casinos exceeding 5 million GBP are taxed the highest rate of 50%. While Macau’s rate is fairly high, there have been recent calls to lower this rate.
Countries with Low GGR Tax Rates
Now that we have looked at countries with the highest GGR tax rate, we can turn our attention to those with the lowest. Having a low tax rate means businesses will flock to the country and set up shop where their profits can soar. This is win-win for the casino and the government. From lowest to highest, the list goes:
- Russia – 0%
- Italy – Between 0% and 2%
- Cambodia – 2%
- Belgium – 2.5%
- Czechia – Between 6% and 11%
- The USA – Between 6% and 8% in gambling States
- South Africa – 9.6%
- Finland – 12%
- Singapore – Between 5% and 15%
- Portugal – 15%
- Argentina – 16%