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?
In the majority of countries lottery winnings are taxed, heavily taxed actually, and for the governments gambling is a great source of income. Probably they (I refer to the governments) see no big problems taxing the winnings because they see them as free money and for the person who wins 50% of something is still better than nothing so, in their opinion, that person just got a lot of free money so it's more than fair to tax them. That's probably how they see it.