It’s not just the legality of gambling operations that is the subject of constant debate among passionate gamblers, especially when it comes to online providers. Many users also disagree about the taxation of their winnings. And that’s not surprising, after all, the legal situation of gambling houses and betting shops in Germany is still very vague.
Taxes & Gambling: The most important questions and answers
To date, there is no official German license and thus no uniform tax liability for operators. Especially in the online sector, companies make use of this legal gray area quite cleverly, which unfortunately also creates ideal conditions for many dubious competitors.
These legal ambiguities are finally to be cleared up in July 2021, when the new State Treaty on Gaming comes into force. What already applies today, however, is the betting tax on sports betting and a tax regulation on gambling winnings generated via slots, for example. The legislator clearly distinguishes between these two types of gains. But what exactly do the mentioned regulations look like and what changes are coming?
Do my winnings from BTC sports betting or BTC casinos have to be taxed?
Do you really need to pay taxes when you bet on your favorite esports games? Read below.
- What you earn privately in the btc casino or online casino is usually tax-free and does not have to be declared to the tax office. The amount of the total winnings in euros is actually not relevant.
- However, if large sums of money are deposited in your account that yield interest, this interest income is subject to tax. The final withholding tax is currently 25 percent. This also applies to lottery winnings.
- There are deviations as soon as the gambling is no longer practiced as a hobby, but actually serves the own livelihood. Then these winnings are considered income and must be taxed in the regular way.
What is the betting tax?
For example, if you bet on soccer or horse racing, you are officially subject to a 5 percent tax on your winnings. In practice, however, you do not have to pay this tax to the tax authorities yourself, because the bookmaker already does this for you. How this is done and whether the bookmaker is responsible for the fees or whether you as a customer have to pay them additionally depends on the policy of the respective betting provider.
Do BTC gambling companies pay taxes in Germany?
State lottery companies as well as casinos officially located in Germany are obliged to pay the so-called casino tax to the state. This results from the difference between the stake and the winnings and varies quite a bit from state to state.
However, due to the legal situation, online casinos are currently making use of a transitional solution and operate with licenses acquired in other EU countries – primarily in Cyprus or Malta. This means that they are also subject to taxation there and all these millions consequently flow out of Germany. So it’s understandable that they want to prevent this loss once and for all with the new nationwide law.
What changes will the State Treaty on Gaming bring in 2021?
In 2020 the whole sports betting and gambling industry had to suffer a lot because of Covid 19, not only in germany but also in countries like Mexico. When the new State Treaty on Gaming comes into effect in the summer of 2021, the previous version from 2012 will be replaced and an official German gaming license will finally be introduced. This is based on tougher criteria that operators must meet. Above all, however, it limits the monthly deposit amount per player to 1,000 euros, which means a serious economic loss for the entire industry.
- This even goes so far that some large providers have already withdrawn from the market before the deadline, as the business is simply no longer profitable due to these cuts. Others, however, are already working hard to implement the requirements and secure their market position.
- The German government, meanwhile, is also in a dilemma: on the one hand, it will benefit from taxes on all gambling revenue generated, but on the other hand, it has taken it upon itself to significantly restrict advertising for this and to push for player and youth protection.
What do I have to watch out for when playing at BTC casinos?
Until the law is changed, you should find out exactly what license an online casino has before registering. If a license is available according to EU law, the provider’s business activity is tolerated in Germany, even if it is not classified as legal. However, if such a license is missing, it is unauthorized gambling.
By participating, you not only run the risk of entrusting your money to a questionable company, but also make yourself liable to prosecution and possibly fines. In addition, the profits made in this way can also be confiscated without you having any recourse.
Either way, the seriousness of the selected website should be especially important to you. In addition to the valid license, it is also important that you are offered fair payout ratios, that the company relies on data security and reliable payment methods, and that it provides you with a German-speaking customer service.
When the new regulations come into force in July 2021, you as a user will no longer be able to gamble in several online casinos at the same time, but will have to choose one provider. This makes it all the more important to know that your money is in good hands and that you have exactly the right selection of games for your long-term enjoyment.