Germans bet a staggering 9.3 billion euros on sporting events in 2019. This means that betting stakes have more than doubled within five years, according to Statista. Commercial sports betting providers such as Bwin, Bet365, tipico, Interwetten and Admiralbet are the main beneficiaries of this trend. The state sports betting Oddset has a significantly smaller market share and the conclusion of Oddset bets is currently also only possible in 9 of 16 federal states.
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On July 1, 2021, the new State Treaty on Gambling came into force in Germany. The central changes therein concern the legalization of previously prohibited online gambling as well as the expansion of existing licenses, especially for sports betting. This means that in the future, providers will need an official license and will have to follow stricter rules. The aim is “to prevent the emergence of gambling and betting addiction and to create the conditions for effective addiction control,” as the preamble to the treaty states. This includes, for example, deposit limits, restriction of the offer of live betting and mandatory measures for player protection.
Do I have to pay tax on winnings from sports betting?
Whether soccer sports betting, sports betting on tennis or darts as well as horse betting, whether online or offline: If you had the right nose and were able to collect betting winnings, you can be doubly happy. Because betting winnings from sports betting are tax-free.
Why is that? Well, in Germany, taxes are only due on income that belongs to the seven types of income. Your wages, for example, belong to the so-called income from employment. Therefore, you usually have to pay income tax on a monthly basis. However, betting winnings do not belong to the seven types of income and consequently remain tax-free.
If the state were to demand taxes on your betting winnings from sports betting, you would, conversely, also be allowed to claim your losses for tax purposes. However, since this would be a loss-making business for the state, it generously waives taxation here.
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The tax exemption applies not only to winnings from sports betting, but also to lottery winnings. After all, the decisive factor for winning is luck, not skill. However, anyone who performs a service for their winnings – for example, answering quiz questions on a game show – usually has to pay tax on the winnings.
Do I have to pay tax on the sports betting starting credit?
Some providers of sports betting entice gamblers with free starting credits or bonus credits. Both the starting credit and the bonus credit remain tax-free for you – just like your betting winnings.
What is the betting tax?
In 2012, the so-called betting tax was introduced: Since then, betting providers have had to pay five percent (since July 2021 even 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 authorities, but usually indirectly. This is because most providers pass on the cost of the betting tax to the customer.
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The revenues from the sports betting tax make the state coffers ring tidily: The Handelsblatt reports that sports betting providers paid almost 384 million euros to the treasury in 2018.
How is the betting tax collected?
There are several ways in which sports betting providers can pass on the betting tax to you.
- Betting tax from winnings: The provider deducts the 5.3 percent directly from your winnings and pays you a correspondingly reduced amount.
- Betting tax from the tip: The provider deducts the 5.3 percent directly from your bet.
- Special calculation models: Some providers have developed special models for the further calculation of the betting tax and change, for example, the betting odds accordingly.
In addition, there are still providers without betting tax. A provider comparison in advance is therefore always worthwhile when it comes to sports betting.
Are betting winnings also tax-free if I bet full-time?
If you make your entire income from sports betting, you are considered a professional gambler. Just as with poker, taxes may then also be due on the winnings.
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Whether your betting winnings are large or small, our advisors will be happy to help you. So that you don’t have to waste time on your tax return and can enjoy your winnings to the fullest.