By nature, businesses are taxable, so it makes sense that casinos should be taxed. But in some countries, they also tax individual gambling winnings. That got me thinking, what’s the real purpose behind that? Most of us gamblers are overall losers anyway, so what impact does taxing the winnings really have?
Would it actually boost government revenue, or could it backfire and discourage people from gambling altogether, knowing it’s already hard to win and when they finally do, they still have to pay taxes?
Both, it is intended for the government to get money to keep functioning, but also it is intended to discourage people to gamble, knowing part of their winnings are supposed to be declared to their government and then given away.
It is similar to what western governments do when comes to tobacco or alcohol, they highly tax those products in order to discourage the local population to further consume them in the long term or at the very least to reduce the consumption in the long term, because most of smokers and drinkers will realize the impact those products will have on their budgets if they consumed them regularly. In the case of gambling, since the house always wins, it is logical to tax casinos, but gamblers lose their money most of the time. To be fair those governments which enforce taxes on winning gamblers also offer the option to declare gambling losses, so they would not pay as much as they usually do of they were not involved in casinos and bookies, at least, that is how it works in the United States.