Taxes on Gambling Winnings in New Zealand

Taxes on gambling winnings in NZ
Last Updated on | by Pavo Jurkic

Do you have to pay tax on gambling winnings in New Zealand? If you’re just a casual gambler, no matter what games you play (lotto, pokies, bingo, or poker), all your winnings are tax-free. According to the Gambling Act 2003 - the law that governs gambling winnings and regulations - gambling winnings are exempt from income tax. New Zealand players don't have to pay taxes on one-time gambling winnings from casinos, racing bets, or lottery tickets.

What is a Gambling Tax: Explained For NZ Players

For the majority of New Zealanders, gambling winnings are tax-free and there’s nothing to worry about. As long as you’re a casual gambler, you won’t have to pay a dime to the government. No matter if you enjoy playing online slots, lotto, bingo, poker, roulette, or any other game out there – if you’re not a professional, all your winnings are 100% cash-free!

In New Zealand there is no tax on gambling winnings for players. For the majority of New Zealanders, gambling winnings are tax-free and there’s nothing to worry about. As long as you’re a casual gambler, you won’t have to pay a dime to the government. No matter if you enjoy playing online slots, lotto, bingo, poker, roulette, or any other game out there – if you’re not a professional, all your winnings are 100% cash-free!

However, land-based gambling companies are obliged to pay taxes. Additionally, offshore online casinos also need to pay a 12% tax according to the recently introduced offshore gambling duty in July 2024.

General Tax Rules on Gambling Winnings

Why are NZ gambling winnings tax-free? Our government classifies such incomes as incomes from hobbies instead of a profession. Furthermore, there are no specific gambling laws and regulations that specify gambling taxation for hobbyists. There are laws for taxing professional gamblers though. To apply, you need to be considered a business by the Inland Revenue (IRD).

Tax on Income from Winnings

Not everything is rainbows and butterflies, though. If you withdraw your winnings and spend them, you’re good to go. No questions asked. But if you invest your winnings into stocks and collect interest, that income might be taxable. It’s best to contact the Inland Revenue (IRD) and inform them of your investments to see whether or not you’ll be taxed.

Types of Gambling Activities and Their Operator Tax Implications

New Zealand’s gambling regulations are quite complex. There are several types of gambling activities with different tax implications and the government will start collecting 12% Offshore Gambling Duty tax on the profits of offshore gambling operators starting from July 1st, 2024.

  • Online Casino Gambling

    There’s no law that strictly prohibits New Zealanders from playing at offshore casinos. However, even top online casinos outside of NZ will be subject to 12% offshore gambling duty starting from July 1st, 2024. This tax exclusively targets offshore operators, meaning it doesn’t concern you as the player.

  • Sports Betting

    Based on our research, sports betting sites are associated with the so-called Totalisator Duty. There’s no fixed amount specified for this duty. Instead, the amount varies depending on the type of bet(s) you’ve placed. And finally, let’s not forget about the problem gambling levy rate which amounts to 0.76% of sports betting profits.

  • Land-Based Casinos

    For land-based casino operators, the casino duty amounts to 4% of casino wins. On top of that, operators have to pay the problem gambling levy which amounts to 0.87% of casino wins for this particular gambling branch. All of this was instated and actively regulated by the Department of Internal Affairs.

  • Lotteries

    Lotteries have to pay 5.5% of the Nominal Value of All Lottery Tickets. The market is regulated by the NZ Lotteries Commission which has instated a 0.44% problem gambling levy rate which also has to be paid. Mind you, the amount is 0.44% for all lottery draws. We’re looking at a 0.01% increase from the previous rate.

  • Pokies

    Pokies are considered non-casino gaming machines. Usually located in bars and pubs, pokie machines and are subject to 20% of gaming machine profits. The regulatory body in charge of pokies’ taxation is the Department of Internal Affairs. On top of the tax, there’s also the problem gambling levy rate of 1.08% which is paid on all gaming machine profits.

  • Poker Tournaments

    The buy-in fee for poker tournaments doesn’t count as a gambling expense. As such, it’s tax-free. The same goes for the funds players earn from winning said poker tournaments. However, if you use those funds to invest in stocks or crypto trading, then you might be taxed. Contact your local tax authority for concrete details.

Gambling Type Duty Rate Regulatory Body Problem Gambling Levy Rate
Casinos Casino Duty 4% of Casino Wins Department of Internal Affairs 0.87% of Casino Wins
Non-casino Gaming Machines Gaming Machine Duty 20% of Gaming Machine Profits Department of Internal Affairs 1.08% of Gaming Machine Profits
Lotteries Lottery Duty 5.5% of the nominal value of all lottery tickets NZ Lotteries Commission 0.44% of Turnover Less Prizes Paid and Payable
Sports Betting Totalisator Duty Varies Depending on the Type of Bet New Zealand Racing Board (NZRB) 0.76% of Betting Profits

FAQ

  • Do I have to pay tax on my gambling winnings in New Zealand?

    No, you don’t. Gambling is classified as a recreational activity and considered a hobby. As such, the government doesn’t have any direct taxation for gambling winnings. So, no matter what game(s) you’re playing, you won’t have to pay any additional tax on the funds you win.

  • Is there a minimum amount I can win before I have to pay taxes?

    No, there are no amounts here. All gambling winnings in NZ are tax-free. Please note that you might have to pay taxes if you use your gambling winnings and then invest them into something else (f.e. stocks, crypto). Also, if you constantly win massive amounts of money, the IRD might do a background check to verify you’re just a recreational gambler and not a business.

  • What if I win a large jackpot?

    No worries, we only bear good news here! Even if you win a massive, life-changing jackpot amount, you will be fine. The government won’t cause any issues. Generally speaking, even some of the biggest jackpots are not taxed in any way.

  • Do I have to pay tax on my lottery winnings in New Zealand?

    No, you don’t. Just like we described earlier, no matter which gambling games you play, your winnings on NZ casinos are tax-free. The same rules apply across the board, from games like pokies, bingo, and jackpots, to poker, roulette, and lottery and everything in between.

  • How are cryptocurrency gambling winnings taxed?

    In most cases, crypto gambling is treated the same way as gambling with conventional money – it’s tax-free! Remember though – if you’re constantly trading cryptocurrencies back and forth, that might be considered trading and could be subject to taxation. In that case, we advise you to contact your local tax authority to figure things out.

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