Concerns Sweden’s Hike in Gambling Tax Will Drive Gamblers to Illegal Market

The new excise tax on gambling in Sweden, which increased from 18% to 22% and is expected to increase tax revenue by SEK540m (£40.9m) annually. The tax change has received mixed reactions from the industry, with some arguing it will drive players towards illegal gambling markets and away from regulated casinos.

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To put Sweden's tax rate into perspective, here are some examples of gambling taxes around the world:  

Highest Gambling Taxes: 

• Germany: 90% 
• France: 80% 
• Austria: 80% 
• Luxembourg: 80% 
• Denmark: 75% 

Lowest Gambling Taxes: 

• Russia: 0% 
• Italy: 0% 
• Cambodia: 2% 
• Belgium: 2.5% 
• Czech Republic: 6% 

In many countries, gamblers are not taxed on their winnings. Instead, the bookies pay a percentage of tax on the total bets or winnings they record. 

For example, Irish bookies pay 1% tax on all bets, while Kenyan bookies pay 7.5% tax on all winnings. 

The claim appears to be a reality for Germany. The German gambling regulator GGL says the country's illegal market was worth between €400m and €600m in gross gaming revenue in 2023. 

GGL said that tackling unregulated offerings remains a “challenging task.”According to a new study by Delhi-based policy think tank Centre for Knowledge Sovereignty, India’s inadequate legal framework, selective banning as well as high taxation on legitimate online gaming platforms is acting as a driver of illegal betting and gambling activity which is expected to grow at 30% in coming years.

In some countries, casinos and bookies pay taxes on their profits, while players are exempt from taxation. Here are some examples: 

• Austria: Casino operators pay a fixed amount per stake, ranging from 35-80%. 
• Australia: Casino operators pay license fees and taxes on gambling revenue, varying by state. 
• Belgium: Casino operators pay an annual fee in exchange for a license. 
• Bulgaria: Casino operators pay a one-time license fee and a turnover tax. 
• Canada: No tax on winnings for online or land-based casinos. 
• Czech Republic: Casino operators pay a fixed tax on their profits. 
• Denmark: Casinos pay a percentage of their gross gaming revenue. 
• Finland: Casino operators pay a fixed percentage of their net profits, which is donated to charity. 
• Germany: Casinos pay 90% of their gross gaming revenue. 
• Italy: Casino operators pay a fixed percentage of their total gaming revenue. 
• Malta: Casinos pay a licensing fee and a percentage of their gross turnover. 
• Romania: Casino operators pay a one-time license fee and a turnover tax. 
• Sweden: The state-owned casino operator Svenska Spel is exempt from taxation. 
• UK: Casino operators pay a fixed percentage of their gross gaming revenue. 

Players are typically not taxed on their winnings in countries where gambling is legal, but casino and bookie operators must pay taxes on their profits or revenue. In some cases, players may be required to declare their gambling winnings on their tax return.