Offshore gambling gives players access to online casinos, poker rooms, and sportsbooks usually unavailable at home.
However, even when playing on offshore sites, tax obligations still apply.
As the quote goes, ‘Nothing can be certain, except death and taxes.’
Winnings from poker, slots, or table games may be taxable, and failing to report them can lead to penalties. Knowing how to manage offshore gambling taxes keeps you compliant and helps maximise deductions—and we’ll explain this in simple terms below.
Table of contents
Are you required to declare your winnings?
Many players mistakenly believe offshore gambling winnings are tax-free, but most tax authorities require all gambling income to be reported, regardless of where it's won.
That means players must report all winnings, even if offshore gambling platforms don’t issue tax documents.
For example, a $10,000 win from an offshore poker site is taxable. Unlike land-based gambling, offshore winnings are typically the player’s responsibility to report, regardless of the amount.
👉 Winnings include online jackpots, poker earnings, slot payouts, table game wins, and sports betting profits from offshore sites. Crypto payouts must also be reported at their fair market value when received.
However, despite tax obligations on winnings, offshore gambling platforms like TG casino attract players with various incentives.
Offshore platforms attract players with welcome bonuses, free spins, rakeback deals, high-stakes tournaments, diverse games, and fast payouts.
Really, the reporting of winnings is a small trade-off for big potential rewards!
What about UK tax laws?
UK players, you’re in luck! Gambling winnings are tax-free in the UK.
No matter how much you win, bet or where you play, you’re all good. This law has been in place since 2001, and isn’t going anywhere soon.
Offshore gambling and tax forms for non-UK players
Whilst many domestic casinos issue tax forms such as a W-2G in the U.S., offshore platforms typically do not.
Players must independently track and report their gambling income.
No tax form means winnings are still taxable. To stay compliant, players should keep detailed records of deposits, withdrawals, wins, losses, gambling session dates and times, and cryptocurrency conversions (if applicable).
Taxpayers with significant offshore gambling winnings may need to report them in different forms, depending on their country’s laws.
In the U.S., report winnings as “other income” on Form 1040. Failure to comply with additional financial disclosure requirements, like foreign bank account reports, can lead to penalties.
Deducting offshore gambling losses
Although winnings must be reported, losses can often be deducted under certain conditions. However, gambling losses cannot exceed reported gambling winnings.
For example, if a player wins $5,000 from offshore gambling but loses $7,000 over the year, they can only deduct up to $5,000 in losses.
👀 To deduct gambling losses, players must itemise deductions, not take the standard deduction. Losses need to be backed by transaction records and account statements, and the deduction can't exceed reported winnings.
In countries with strict gambling tax laws, keeping detailed records is essential. Since offshore platforms may not provide official loss statements, player documentation becomes even more crucial.
Tax rules for professional gamblers
For those who engage in offshore gambling as a primary source of income, tax rules change significantly.
A professional gambler is someone who treats gambling as a business rather than casual entertainment. This classification allows for additional deductions beyond just losses.
Professional gamblers filing taxes may deduct business-related expenses such as travel, lodging, and meals when attending offshore tournaments. They can also write off:
- Costs of gambling software
- Research subscriptions
- Training materials
- Internet costs used primarily for gambling
Professional gamblers must also pay self-employment taxes, including Social Security and Medicare in the U.S.
How to stay compliant with offshore gambling taxes
Navigating offshore gambling taxes requires careful record-keeping.
Players should track transactions with a spreadsheet or tracking software, as offshore sites rarely provide tax statements. Tax residency laws differ—some countries tax worldwide income, whilst others only tax domestic earnings.
Consulting a tax professional can help clarify requirements.
For crypto winnings, report the market value at the time of receipt and any gains or losses from sales. Offshore accounts may also require additional reporting, like the FBAR for U.S. taxpayers if balances exceed $10,000.
Cryptocurrency transactions may trigger capital gains taxes, even without conversion. Tax authorities are closely monitoring digital transactions, so proper documentation is key to avoiding penalties or audits.
Conclusion
Playing on offshore gambling sites doesn’t mean you’re off the hook for taxes. Whether you’re casually betting or earning big, all winnings (bonuses included) need to be reported, even without tax forms. Deductions can offset winnings, but losses can’t exceed reported income.
Keeping good records, understanding the tax rules, and getting expert advice are the best ways to stay compliant and enjoy offshore gambling without penalties.
Keep learning about online casinos and how to optimise your play via the Roger blog.
