Question Regarding the Legality of Taxes for Gambling Businesses, as Perceived by a Legal Professional
Alrighty then, let's dive into the messy world of gambling taxes, shall we? The gist is that this gambling business is facing a hefty tax burden, and it's causing quite a kerfuffle.
Lawyer Zoryana Toporeckaya has spotted some issues in the tax code for the gambling industry in Ukraine. You see, the owners of gaming machines are required to pay a whopping 10% on their income and 18% on profit tax. Yet, the law states that at least 90% of the total winnings should be distributed. That's quite the conundrum, ain't it?
Toporeckaya points out a discrepancy in the tax system. If taken literally, the 10% tax rate on turnover isn't for games on gaming machines, but for games in gaming halls. So, a casino owner with gaming machines has to pay taxes for them as if they were a casino.
Another bone of contention is the tax on winnings. If a player wins less than they've lost, they still have to shell out 19.5% tax on the total amount. So, it's more financially sensible for a player to gamble illegally today.
Compared to other countries, Ukraine has an excessive tax burden on the gambling industry. The lawyer highlights examples from Georgia, Sweden, Lithuania, and Bulgaria. In Georgia, licenses are costly, with a 10% tax on GGR (Gross Gaming Revenue). On the other hand, licenses are inexpensive in Sweden and Lithuania with a 18% tax on GGR. In Bulgaria, the initial tax was 8% of GGR, but it was later increased to 15-20%.
Now, let's take a gander at the mess overseas. In the United States, sports betting operators pay a federal tax of 0.25% on the total amount wagered (handle). This rate, while seemingly low, can potentially threaten the viability of the legal market due to its impact on operators' margins. (Think of it as a silent killer).
In Armenia, gambling tax rates for online casinos and bookmakers have doubled as of April 2025, from 0.175% to 0.35% and from 0.1% to 0.2% respectively. These rates may increase annually until an oversight body is created, adding regulatory uncertainty and potential tax cost escalation.
The gambling tax in the Netherlands is being increased in two steps: from 30.5% to 34.2% in 2025, then to 37.8% in 2026, making it one of the highest in Europe. This high rate has drawn criticism, as it could reduce market size and encourage unregulated gambling.
In the United Kingdom, remote gambling is taxed primarily on operator profits. There's been a proposal to consolidate these into a single tax rate of 21% across all sectors, which has sparked concerns about potential economic unfeasibility and pushing the activity underground.
Lastly, Kazakhstan has among the highest gambling taxes in the former Soviet Union, with taxes per gaming table doubling by 2018 to about $11,300 monthly. Large casinos can fork over up to $5.2 million in taxes annually. These high taxes, combined with bureaucratic hurdles, have deterred investors and forced closures, making the industry weak and reducing tourism potential.
In summary, Ukraine's gambling tax regime is moderate compared to countries with extremely high tax rates like the Netherlands and Kazakhstan or complex multi-tiered systems like the UK. However, Ukraine faces typical challenges of a nascent market, including regulatory stability and attracting investment, which are common issues worldwide. High taxes elsewhere often result in reduced market viability and encourage illegal gambling alternatives.
So there you have it, folks! Welcome to the wild west of gambling taxes. Don't say we didn't warn you!
The finance sector, particularly businesses involved in gambling, are grappling with hefty tax burdens, as seen in Ukraine's gambling industry where owners of gaming machines face a 10% tax on income and 18% on profit, contrasting with countries like Georgia, Sweden, and Lithuania that offer more favorable tax rates.
Financial advisors suggest that excessive taxation in the gambling industry might incentivize illegal gambling activities, posing challenges for regulatory bodies and the overall economy.
