The title says it all, but we’ll say it again, should a punter pay tax on his / her gambling winnings in South Africa? Well you’ve come to the right place to have that question answered. This is our guide to Gambling Tax South Africa for punters who play the lotto, online casino, lucky numbers and for those betting on sports.
Before we get started we’d like to say we are not tax lawyers or accountants so please do your own research if you are making enough money that you think you should be paying tax. This post is meant as a guide for those who think they should and would like to do the right thing.
Gambling Tax in South Africa
Lottery winnings
Lottery wins are not included in an individuals taxable income and are generally exempt from taxes. You would need to declare the winnings to Sars however when filing your annual returns. They won’t tax it but they’d like to know about it!
Gambling winnings
We’re sure this is the reason why you are here. Gambling winnings and tax can get a bit murky and complicated so we’ll try keep it simple. We’re going to group winners into two different camps, the first being Joe Public who bets / goes to the casino every so often as a hobby and John Sharp who is a professional gambler who spends all his time playing poker and sipping cocktails at Kenilworth racetrack and is paying Gambling Tax.
Joe Public has a job and only gambles for fun and to try make some extra money. Joe is basically the majority of the gambling / betting population. He’ll have a few wins and lots of losses and won’t make enough to get SARS interested in taxing him. Now there are circumstances where Joe might have won R300000 on a pick 6 / blackjack and he is worried that the taxman will come chasing him for some Gambling Tax.
Fear not Joe, you are safe. SARS treats Joe Public’s winnings like it treats Lottery winners winnings as “It’s not a scheme of profit making”. Which means Joe Public will not have to pay tax but he should declare the winnings to SARS. Now if Joe keeps winning and decides that he can make money out it then he becomes John Sharp.
John Sharp is only in the business to make money off the casinos, bookies and dice rollers in his local alley. Because his business (well personal business) is to make money this makes him a Professional in the eyes of the Taxman, so what does this mean for John and the R200000 he won at Kenilworth thanks to a tip from his uncle? Well it mean’s he is going to have to declare those winnings making them subject to normal tax, on the bright side he can also claim losses on his tax which does make things a bit fairer.
Full time gamblers pay tax
For those of you who are full time punters / gamblers and are making a profit you should be declaring this to SARS and you will be taxed accordingly. These scale on what your income tax scales so you’ll need to refer to the SARS website for more details on what exactly one would need to pay if they profited R10000 or R1000000 in one month. You’d obviously pay more the more you profit.
We hoped this article was helpful and if you’d like more detailed information then we’d suggest giving your account a shout and he’d be able to explain things in more detail. Otherwise best of luck Joe and John, I hope you guys walk out with a healthy profit.
For more information please see the SARS website.
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What are the legal ramifications of Matched Betting in south africa? For one, using the bonuses on multiple casinos to bet on opposing teams of the same sports match in order to guarantee a profit. This is legal I understand, but what about Gnoming then? Getting friends to create accounts under their names, and using my money to bet on their accounts to claim more bonuses?
It’s perfectly legal to do so Robert. The trick is that many books have different margins as well as different wagering requirements on their bonuses. However there are some books that run on the same software provider and if they pick it up you’ll be limited across the spectrum of those books under the software. Also bookmakers would have the right to confiscate the funds should they find any wrong doing. So it’s perfectly legal but if they catch you doing it then your money is gone.
Can the bank confiscate my winnings from overseas betting?
Yes they are well within their legal rights to do so (SARS Directive) Stick to local books and you won’t have any issues.
The problem with local books is that they have low betting limits and if you are a constant winner (Pro) they will limit your winnings or even close your account.
Yip we’ve had several accounts limited and closed in the past in SA. We’ve worked for overseas bookmakers and they do the same to be honest, however they have exchanges, the lucky fish.