In 2019, Germans bet a total of 9.3 billion euros on sporting events. According to Statista, the stakes have more than doubled in five years. The main beneficiaries of this trend are commercial sports betting providers such as Bwin, Bet365, Tipico, Interwetten and Admiralbet. The state-owned sports betting provider Oddset has a significantly smaller market share and the conclusion of Oddset bets is currently only possible in 9 of the 16 federal states.
On purpose:
On July 1, 2021, the new State Treaty on Gambling came into force in Germany. The central changes in it concern the legalization of previously prohibited online gambling and the expansion of existing licenses, especially for sports betting. This means that providers will need an official license in the future and will have to adhere to stricter rules. The aim is to “prevent the emergence of gambling and betting addiction and create the conditions for an effective fight against addiction,” the preamble to the contract states. These include, for example, deposit limits, restrictions on the offer of live bets, and mandatory player protection measures.
Do I have to pay taxes on my sports betting winnings?
Whether it’s football sports betting, tennis sports betting, darts sports betting or horse racing betting, online or offline: if you had the right instinct and managed to pocket the winnings from betting, you can be doubly happy. Winnings from sports betting are tax-free.
Why is this? Well, taxes in Germany only apply to income that belongs to the seven types of income. The so-called income from employment includes, for example, your salary. Therefore, you usually have to pay income tax on a monthly basis. However, betting winnings are not one of the seven types of income and therefore remain tax-free.
If the state taxed your sports betting winnings, you could also claim your losses for tax purposes. However, since this would be a loss-making business for the state, it generously waives taxation here.
On purpose:
The tax exemption applies not only to sports betting winnings, but also to lottery winnings. Because the key to winning is luck, not skill. However, anyone who provides a service for their own profit, such as answering quiz questions in a game show, usually has to pay taxes on the profit.
Do I have to pay taxes on my initial sports betting balance?
Some sportsbook providers lure players with free initial credit or bonus credit. Both the initial balance and the bonus balance remain tax-free for you, as well as your betting winnings.
What is the betting tax?
The so-called betting tax was introduced in 2012: Since then, betting providers have had to pay five percent (from July 2021 also 5.3 percent) tax on all German sales. It does not matter whether the bet is placed in a betting shop or on the Internet, the betting tax is always due.
As a sports bettor, you do not pay the betting tax directly to the tax office, but usually indirectly. Because most providers pass on the betting tax cost to the customer.
On purpose:
Revenue from sports betting tax puts state coffers in order: The Handelsblatt reports that sports betting providers paid almost 384 million euros into state coffers in 2018.
How is the betting tax collected?
There are several ways in which sportsbooks can pass on the betting tax to you.
● Betting tax from profit: The provider deducts 5.3 percent directly from your profit and pays you a correspondingly reduced amount.
● Tip Betting Tax: The provider deducts 5.3 percent directly from the stake.
● Special calculation models: Some providers have developed special models for the further calculation of the betting tax and, for example, adjust the betting odds accordingly.
In addition, there are providers without a betting tax. Therefore, when it comes to sports betting, it is always worth comparing providers in advance.
Are betting winnings also tax-free if I bet full time?
If you earn all your income from sports betting, you are considered a professional gambler. Just like in poker, you may also be subject to taxes on your winnings.
On purpose:
Whether your bet is big or small, our advisors are here to help. So you don’t have to waste time with your tax return and you can enjoy your profits to the fullest.