Sports betting in France: When should you declare your winnings?

Are winnings from sports betting taxable in France?

Sports betting has become a popular activity in France, attracting over 4.5 million punters by 2021, according to the National Gaming Authority (ANJ). This passion for betting generated a total stake of over 8 billion euros in one year. However, one question remains: do you have to declare your earnings when you file your tax return in 2023?

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Taxation of sports betting: What you need to know

Scenario 1: Your earnings are irregular

Article 92 of the French General Tax Code (CGI) stipulates that income from profit-making occupations that do not fall into another income category is taxable as non-commercial profits (BNC).

However, sports betting winnings are an exception. Most of the time, even if you’ve earned a considerable sum, you don’t have to declare it. This is due to the element of randomness that characterizes sports betting. In other words, the habitual practice of gambling, such as sports betting, is not generally considered a source of taxable profits. The Conseil d’Etat confirmed this position in a 1980 decision concerning horse betting.

However, it is important to note that although punters are not directly taxed on their winnings, the government does receive a share of the revenue through a tax imposed on sports betting operators licensed by the ANJ. This tax, which used to be levied on players’ bets, is now calculated on gross gaming revenue, indirectly impacting odds and potential winnings for punters.

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Scenario 2: Your earnings are regular

There is, however, a rarer situation in which gains may be considered taxable. This occurs when the tax authorities consider that the random element inherent in gambling has been greatly attenuated by the bettor.

This may be the case for an experienced poker player, where the player’s skill can influence the outcome. However, this logic seems less applicable to sports bettors, because even if they analyze odds and probabilities, their influence on the outcome is limited compared to a poker player.

Ultimately, whether your earnings are taxable will depend on how often and how much you earn. The tax authorities examine each case individually to decide whether a bettor is considered a professional, in which case his winnings would become taxable.

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Sports betting winnings: When do you become taxable?

Sports betting has become an essential pastime for millions of French people, generating a flourishing industry and considerable revenues. However, the question of taxation of winnings from these bets often remains confusing for many punters. In this article, we have explored the different situations that can arise when it comes to taxing sports betting winnings.

First of all, it’s essential to note that in the vast majority of cases, winnings from sports betting are not taxable in France. This is due to the randomness that characterizes these games of chance. Article 92 of the French General Tax Code (CGI) provides for a “balancing clause” that allows the tax authorities to tax various sources of profit, but the usual practice of gambling, such as sports betting, is generally excluded. A decision by the Conseil d’Etat in 1980 also confirmed this exemption from taxation, even when the gains exceed the taxpayer’s other income.

However, the taxman does not let all sports betting revenues slip through his fingers. Licensed sports betting operators must pay a tax on gross gaming revenue, which can indirectly affect odds and potential winnings for punters.

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In exceptional cases, where the tax authorities consider that the random element inherent in games of chance has been greatly attenuated by the bettor, winnings may be considered taxable. This applies more commonly to experienced poker players, where the player’s skill can influence the outcome. However, for sports bettors, this question is less clear-cut, as their influence on the outcome of events is limited compared to a poker player.

Ultimately, the taxation of sports betting winnings remains a complex subject, and each case is assessed individually by the tax authorities. If you regularly win large sums through sports betting, it’s a good idea to consult a tax expert to determine your specific situation and whether you need to declare your winnings.

In conclusion, although most sports bettors need not fear taxation of their winnings, it is vital to keep abreast of current tax laws and maintain transparency in your tax returns to avoid any problems with the tax authorities. The world of sports betting can be exciting, but it’s essential to stay aware of your tax obligations to get the most out of it.