Gambling is also a profitable business for the state: the tax revenue is considerable. For players – regardless of whether the game consists of lotteries, poker, sports betting or other games of chance – the fact is a nuisance. They think they are making a profit with a big blessing of money, but even the largest jackpot cannot match the income that the state receives from gambling.

There are billions of dollars a year. They come about in different ways and are quite divided between the private environments. Money from sweepstakes does not have to be taxed – but this only applies to the first win. The interest that comes later due to the money blessing is again subject to tax. The state therefore takes money twice for the same thing. This article discusses which areas are covered by the state’s blessings and how gambling is regulated in general.

In what areas does the state take money?

In what areas does the state take money?

On the one hand, it seems strange. The state goes there and subsidizes some lotteries, on the other hand it earns from the same games. Players might think the cat bites its own tail. And yet, the state’s profit from gambling is far higher than subsidies can be. There are various sources of income for the individual games of chance:

  • Slot machine games – around 1.12 billion euros annually
  • Horse racing / sports betting / lotto – around 1.67 billion euros annually.

The financial authorities do not disclose a precise number, or the exact figures of the previous year are not yet known. Another source of income in connection with games of chance is only indirectly related to the actual game: taxes. They are by far not only due to actual winnings, but already come about during the game itself:

  • Lotto – Lottery fee of 20% of the stake
  • Race bets – 5% of the bet
  • Sports betting – 5% of the stake
  • Slot machines – entertainment tax calculated at the country level.

Income from games of chance is never taxable directly, but the interest accrued must be taxed. Things look a little problematic with the pension lotteries. Income tax does not apply here directly if a player has the entire profit paid out. On the other hand, if he accepts the monthly pension payment, the money transferred is counted as normal income – and the income tax comes directly.

How is gambling regulated in UK?

How is gambling regulated in UK?

The so-called State Treaty on Gaming has existed since 2008. It was sometimes created to form a legal basis that is not limited to lotteries and casinos, but also includes online gambling.

However, the contract did not quite work, individual points, such as the state monopoly on sports betting, were directly annihilated by the European Court of Justice. Hence the first official amendment to the State Treaty on Gambling in 2012. This says the following:

Ordinary lottery games (Euro jackpot, lottery, additional lotteries) – may be offered online (for example, through the official acceptance points determined by the federal state)

  • Private providers – there is an experimental phase that extends over seven years
  • Concessions – to a certain extent, concessions can also go to private providers
  • Online casinos – no web locks

Each federal state has the option of setting up its own rules in addition to the state treaty. In principle, every gaming provider must not only observe the fixed rules of the State Treaty, but also take care of player protection. This states that, for example, casinos must make sure that there are points of contact within the company regarding gambling addiction.

Casinos and lottery acceptance points can exclude players or the player himself can create a lock. With online providers, the clarification is of course more difficult, since here only the risk of gambling addiction can be pointed out and real advice does not take place. For this reason, the lottery offices restrict their use. There is usually a maximum monthly bet that players cannot exceed. Until an account is officially activated, the maximum limits are significantly lower than those that apply after confirmation.

Why is regulation important for online casinos in particular?

Why is regulation important for online casinos in particular?

Casinos that predominantly use the Internet do not concentrate exclusively on one federal state or one European country. They can be used effortlessly from abroad, which inevitably plays into the hands of black sheep.

This means, for example, that a casino is only indirectly bound to a country’s concessions – the location or the registration address can easily be located abroad, where other laws apply. The EU is preventing this problem by including an EU license that regulates online gambling in general. According to , many online casinos are now licensed accordingly.

By the way, UK cannot once again call itself a pioneer in this area. While other EU countries have long adopted online gambling and found regulated ways, the individual federal states in UK continue to argue and do not get going. The only federal state that briefly veered out and made licenses available was Schleswig-Holstein. The basis of the individual regulation points for online casinos lies in the following areas:

  • Protection of young people – young people are only allowed to take part in games to a certain extent (control of ID, post-identification procedure)
  • Protection from gambling addiction – is the responsibility of the casinos. You have to react with betting limits, the exclusion of players and information about gambling addiction including contact points.
  • Protection against money laundering – In the past, games of chance were often used for money laundering, casinos must pay particular attention to this point and take action against money laundering.
  • Payment methods – the payment and payment of winnings must be possible via secure methods.

By the way, venues in Malta and Gibraltar have been given special concessions to ensure and regulate the location of online casinos in these regions. Of course, the regulations of general online gaming enjoyment also mean that the state does not go away empty-handed and continues to earn from the income or the gaming taxes.

Conclusion – in Gambling players can win, the state always wins

It is quite unfair. Gamblers sometimes have to wait their entire lives to make a profit worth mentioning, and the state doesn’t even have to fill out a lottery ticket to earn a lot.

On the other hand, regulating gaming operations makes sense not only at the state level, since it acts massively against fraud and dubious online casinos. So it could be a win-win situation – even if the player often goes empty-handed in terms of income.

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