Gambling Winnings and Tax in Australia
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One of the most common questions Australian players ask is whether they have to pay tax on casino winnings. For almost everyone the answer is no: the Australian Taxation Office does not treat recreational gambling winnings as income. There are exceptions, though, and cryptocurrency adds a twist that catches many online players out.
This guide explains the general position, who may be treated differently and how Bitcoin and other crypto fit in. It is general information, not tax advice; if large sums are involved, speak to a registered tax agent.
The General Rule: Winnings Are Not Income
In Australia, gambling winnings of a recreational player are not assessable income. The reasoning, developed through decades of court decisions, is that gambling is a pastime driven by chance rather than a business, so winnings are windfalls rather than earnings. The flip side is that gambling losses are not tax deductible. This applies equally to online casinos, pokies in a club, lotteries and sports betting, and it applies whether you win $50 or a $1 million jackpot.
When Gambling Can Be Taxed: Professional Gamblers
The exception is someone whose gambling amounts to carrying on a business. Courts have set that bar very high, and relatively few Australians have ever been treated as professional gamblers. Factors considered include whether the activity is systematic and organised, its scale and regularity, whether it is conducted in a businesslike way with records and a profit motive, and whether profits are consistent. Games of pure chance, such as pokies, keno and roulette, are very unlikely to be treated as a business; activities involving skill and systematic betting are more likely to raise the question. Cases often cited include Evans v FCT (1989), in which a heavy gambler was found not to be carrying on a business, and Brajkovich v FCT. If you gamble at a scale where this might apply, get professional advice.
What Is Taxable Even for Recreational Players
- Interest and investment income earned on your winnings once you have them, such as bank interest or dividends from shares bought with a win.
- Capital gains on cryptocurrency used to gamble (see below).
- Income from gambling-related work, such as streaming, coaching, tipping services or affiliate commissions, which is ordinary income.
Bitcoin and Crypto: The Catch
The ATO treats most cryptocurrency as a capital gains tax (CGT) asset. Sending crypto to a casino is a disposal of that asset, so if its value has risen since you acquired it, you may have made a capital gain even though the gambling itself is untaxed; if it has fallen, you may have a capital loss. The same applies when you receive winnings in crypto and later sell or spend them. Keep records of the date and AUD value of each purchase, deposit and withdrawal. Our Bitcoin casino guide covers crypto banking in more detail, including casinos that convert deposits to AUD on arrival.
Large Wins and Your Bank
Although recreational winnings are not taxable, banks are required under anti-money-laundering rules to report certain transactions, and a large incoming transfer may prompt questions about its source. Keep your casino transaction history and withdrawal confirmations so you can show where the money came from. Casinos will also ask you to verify your identity before paying out; see our casino verification guide.
Centrelink and Other Considerations
Winnings may be relevant outside the tax system. For example, if you receive a Centrelink payment, a large win can affect assets and deeming tests once the money is in your account. If you are unsure how a win affects a benefit, check with Services Australia.
Where to Get Advice
For most players, no action is needed beyond keeping records. If you gamble at high stakes, trade crypto or earn money from gambling-related activities, speak to a registered tax agent. And if gambling is starting to feel like a way to make money rather than entertainment, that is worth pausing on; our responsible gambling page lists free support.
Frequently Asked Questions
Do I pay tax on online casino winnings in Australia?
Not as a recreational player. The ATO does not treat gambling winnings as assessable income unless your gambling amounts to carrying on a business, which is rare.
Can I claim gambling losses as a tax deduction?
No. Because recreational winnings are not income, recreational losses are not deductible either.
Who counts as a professional gambler in Australia?
Someone whose gambling is systematic, organised, businesslike and conducted on a scale that amounts to a business. The courts have set this bar very high, and games of pure chance are rarely treated as a business.
Do I pay tax when I gamble with Bitcoin?
The gambling winnings are not taxed, but depositing crypto to a casino is a disposal of a CGT asset. If the coins rose in value since you bought them, you may have a capital gain to report.
Is interest on my winnings taxable?
Yes. Interest, dividends or other income earned by investing your winnings is taxable in the normal way, even though the original win was not.