Do You Pay Tax on Gambling Winnings in the UK?

The Official Answer: Are My Winnings Taxable?

No, any gambling winnings that are earned are not taxable by law. As stated on the HMRC website, winnings that are made from activities including sports betting (and horse racing), online casino games and slots, the National Lottery, and Bingo are not subject to taxation.

Players can keep 100% of their winnings, rather than paying the 6.75% tax rate that was in place until Gordon Brown abolished it. Operators, though, are still required to pay tax.

Why is Betting Tax-Free in the UK? (A Quick History)

While gambling-related winnings are now tax-free, that wasn’t always the case in the UK.

As referenced, before the law’s abolition in 2001, there was a “betting duty” that required bettors to pay when they won. The rate was 6.75%, which could be seen as a large figure at the time for many.

Tax in the UK is still generated from the gambling industry, although this now falls on the operators. Tax was shifted from punters and is now placed upon gambling operators who pay a Point of Consumption (POC) Tax on their profits. 

Since December 2014, UK-facing online gambling operators must pay a 15% POC tax on profits from UK customers regardless of the operator’s location. This tax is part of the UK Licensing and Advertising Act 2014 reforms, which aim to tax operators on a place-of-consumption basis, affecting betting, pool betting, and remote gaming duties.

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The “Professional Gambler” Myth: What if it’s My Only Income?

There is a common misconception about UK tax laws and gambling that causes significant confusion. Many ask whether they still need to pay tax if they are a professional gambler and their only source of income.

The answer is the same: no tax is required to be paid on gambling winnings. Players may have to inform HMRC that they are engaging in a form of professional gambling, especially if it is business-related. It is always advisable to seek professional financial advice in this scenario.

The case of Graham v Green (1925) established a key legal principle regarding betting and gambling for income tax purposes. In this case, Mr. Graham’s sole livelihood was from betting on horses at starting prices. The court held that betting and gambling activities do not amount to a trade, adventure, profession, or vocation, and as such, the profits made from such activities fall outside the scope of income tax.

Rowlatt J famously stated that although the individual was “addicted to betting” and earned his living from it, his betting could not be classified as a trade because the nature of betting was merely individual bets placed without organisational structure akin to a business.

The judge emphasised the difficulty in describing betting as a trade, saying “there is no tax on a habit,” meaning that systematic betting, even if successful and one’s main income, does not create taxable trading profits.

This ruling means professional gamblers do not pay income tax on their winnings because the activity does not have the characteristics of a trade, like providing goods or services.

The Special Case: Is Spread Betting Tax-Free?

Financial spread betting is a form of wagering on how prices in financial markets, such as stocks, currencies, or indices, move without owning the assets. Financial spread betting involves placing bets on whether a market will rise or fall, with profits or losses dependent on the extent of the price movement.

In the UK, winnings from financial spread betting are currently tax-free. Spread betting profits are not subject to Capital Gains Tax or Income Tax. This is because HMRC classifies spread betting as a gambling activity rather than an investment or trading activity. Unlike other forms of financial trading, no actual asset transactions occur in spread betting, which is why it falls outside conventional investment tax rules.

Still, it is a complex area, as there can be exceptions. Professional spread bettors who trade as a business or if spread betting constitutes their main source of income may be liable for income tax. Similarly, companies conducting spread betting as a speculative activity might be subject to corporation tax.

While this is the current rule, tax laws can change. Individuals involved in high-volume financial spread betting should consider getting advice from a tax professional.

Conclusion

Any gambling winnings, no matter how large or small, are not subject to UK tax. Any money won is for players to keep.

HMRC does not need to be informed of any wins, nor do players need to declare them. Still, exclusions can apply. Having a personal financial advisor can be the best course of action for proper legal advice.

Remember to gamble responsibly each time you place a bet. Gambling should be viewed only as an entertainment activity; winning is just a bonus. Bet with money you can afford to lose and stick to a budget by placing small, manageable bets.

Disclaimer: Everything in this article has been written for informative purposes and was last updated in October 2025. Laws are subject to change and Flashscore is not a financial advisor. Always seek professional advice.