For most people in Australia, gambling and betting winnings are not taxed. The Australian Taxation Office (ATO) treats a punter's winnings as not assessable income (the income your tax is worked out on) and their losses as not deductible, unless the betting is carried on as a business. Because chance plays the biggest part in how a bet turns out, the ATO's ruling expects that to be rare for someone whose only link to racing is betting.
For anyone whose betting is not a business, the rule cuts both ways: a winning year adds nothing to taxable income and a losing year takes nothing off it. Point of consumption tax, the wagering tax charged by the states and the ACT, is paid by bookmakers on their revenue, not by punters. Tax can still arise around a win, for example when you sell an asset you won or your winnings earn interest.
What the ATO says about gambling winnings
The ATO's ruling on betting is Taxation Ruling IT 2655, issued on 17 October 1991 after three Federal Court decisions from 1989: Evans, Babka and Brajkovich. In it the Commissioner of Taxation accepts that a punter can be in the business of betting, but considers that rare for someone whose only connection with racing is betting. The ruling also records the Full Federal Court's view in Brajkovich that gambling, done the way ordinary members of the public do it, would seldom amount to a business, whatever the size of the wins or losses.
The ATO's current guidance gives the same answer in one line. Its page on amounts a business leaves out of assessable income lists "betting and gambling wins (unless you operate a betting or gambling business)", and was last updated on 7 May 2025.
Whether betting is a business depends on the facts of each case. IT 2655 weighs four things:
- whether the betting is conducted in a systematic, organised and businesslike way
- its volume and the size of the bets
- whether it is tied to other businesslike activities, such as breeding horses
- whether it is done principally for profit or principally for pleasure
The court in Brajkovich added, and the ruling records, that gambling with a significant element of skill is more likely to have tax consequences than gambling on random events. IT 2655 also says there is no Australian case in which a mere punter's winnings have been held assessable, or losses deductible. That is IT 2655's statement from 1991, not a promise about later cases. The professional gambler tax guide explains each factor and the three cases in plain terms.
Note: General information about the ATO's published position, checked 7 October 2026. It is not tax advice, and it cannot say whether your own betting is a business.
Which wins, prizes and earnings are taxed
These situations use illustrative amounts. The middle column gives the ATO's published position in general terms, not a ruling on anyone's facts.
| Situation (illustrative) | What the ATO's published position says | Basis |
|---|---|---|
| A year of weekend betting ends $3,200 ahead | For most people, not assessable income | IT 2655 |
| A year of weekend betting ends $2,700 behind | For most people, not deductible against wages or any other income | IT 2655, Brajkovich |
| A single multi returns $85,000 | Size alone does not make betting a business | IT 2655, Evans and Brajkovich |
| A sole trader bets on the side | Betting wins stay out of business income unless the business is betting | ATO business income guidance |
| A lotto draw or raffle prize | Not declared | ATO prizes and awards |
| A prize draw run by your bank, building society, credit union or investment body | Declared | ATO prizes and awards |
| Winnings earn interest in a savings account | The interest is assessable | ATO assessable income |
| A wage from a wagering company, or fees for a betting-related service you sell | Assessable as wages or payment for services | ATO assessable income |
| Betting carried on as a business | Winnings assessable; losses can be deductible, subject to the non-commercial loss rules for individuals | IT 2655; ATO non-commercial loss rules |
The pattern: for most people a win itself is not income, but money earned from work around betting, or from investing what you won, is taxed like other income. The ATO's examples of assessable income include salary and wages, payments for your services, and interest from bank accounts.
Matched betting, arbitrage and other systematic methods face the same test, and tax on matched betting and arbitrage covers how they fit it. Bookmaker terms are a separate matter from tax: many bookmakers restrict or ban automated betting, third-party account access and multiple accounts, and a bookmaker can cap stakes, void bets or shut an account.
Risk: Betting involves risk. The rule that keeps most wins out of tax also gives most losses no tax relief, so money lost on a bet stays lost, and there is no guarantee of profit. See responsible gambling for limits and support.
Point of consumption tax is the bookmaker's tax
Every state and the ACT taxes wagering operators on their net wagering revenue from customers located there when the bet is placed. This is point of consumption tax (POCT). The operator pays it on its own revenue, works it out in its own returns to the state or territory, and it is not a tax on your winnings.
Revenue NSW sets out the base for NSW. For bookmaker bets it is the total of bets from customers located in NSW, counting the face value of bonus bets, plus fees and commissions. The winnings and refunds paid on those bets come off, except any paid as bonus bets or other credits that cannot be converted to cash, and tote pools and exchange commissions are counted separately. The rate applies to the part of the financial year's total above the threshold.
Example: Illustrative figures for one bookmaker with no tote or exchange business, over a financial year: customers located in NSW stake $48 million, bonus bets included, and it pays $44.1 million in cash winnings and refunds. Net NSW wagering revenue = 48,000,000 - 44,100,000 = $3,900,000; the part above the $1 million threshold = 3,900,000 - 1,000,000 = $2,900,000; tax at 15% = 2,900,000 x 0.15 = $435,000, paid by the bookmaker.
Each state and the ACT publishes its own rate and threshold, as checked in October 2026:
| Jurisdiction | Name used | Rate | Tax-free threshold | When the rate applies | Revenue office |
|---|---|---|---|---|---|
| NSW | Point of consumption tax | 15% | $1 million a year | Since 1 July 2022 | Revenue NSW |
| Victoria | Wagering and betting tax | 15% | $1,000,000 | 1 July 2024 to 30 June 2027 | State Revenue Office Victoria |
| Queensland | Betting tax | 20% | $300,000 a year | Current rate as published (page updated 27 April 2026) | Queensland Revenue Office |
| South Australia | Betting operations tax | 15% | $150,000 a year | Described by RevenueSA as effective from 1 July 2017 | RevenueSA |
| Western Australia | Betting tax | 15% | $150,000 a year | Current rate as published (page updated 14 March 2026) | WA Government |
| Tasmania | Point of consumption tax | 15% | $150,000 | From 1 January 2020 | Department of Treasury and Finance Tasmania |
| ACT | Betting operations tax | 25% | $150,000 | Since 1 July 2023 | ACT Revenue Office |
The tax follows where the customer is when the bet is placed, not where the bookmaker holds its licence. The guide to how bookmakers work covers the other costs that come out of a bookmaker's margin.
When you win an asset instead of cash
Capital gains tax (CGT) disregards gains and losses made directly from gambling, or from a game or competition with prizes, so winning an asset does not make a capital gain. Selling it later is a separate event that can be subject to CGT. The ATO's guidance on crypto asset prizes says the cost base is the asset's market value at the time you won it, and that a disposal is likely to make a capital gain or a capital loss.
| Illustrative case | Cost base | What a later sale means |
|---|---|---|
| Crypto assets worth $12,000 when won as a lottery prize, held as an investment and sold for $15,500 | $12,000 | A capital gain of 15,500 - 12,000 = $3,500 |
| The same assets sold for $9,000 instead | $12,000 | A capital loss of 12,000 - 9,000 = $3,000 |
| A car won in a raffle and sold later | Not needed | No CGT, because cars are exempt |
How much of a gain ends up taxed depends on the CGT rules in force when you sell, including any discount, so check the ATO's current guidance at that point. The ATO's list of CGT assets and exemptions covers the car exemption, which applies to a motor vehicle carrying a load of less than 1 tonne and fewer than 9 passengers.
Records worth keeping even when nothing is taxed
Records cost little, and they answer three questions that can come up later.
- What did a won asset cost? Keep evidence of its market value on the day you won it. For an asset that can be subject to CGT, the ATO's rule is to keep records until 5 years after it is certain no CGT event can happen.
- Has your betting changed? The ATO says that if an activity changes in a major way, for example it starts making a profit or you start intending it to, you must reassess whether you are in business. A record of how your betting has grown is what you and a tax agent would look at.
- Can you show where money came from? The ATO says good records help you prove the information in your tax return if it asks, and help resolve disputes. Its general rule is to keep written evidence for 5 years from the date you lodge a return.
The simplest base is the monthly activity statement every online wagering provider licensed in Australia must email to active accounts under the National Consumer Protection Framework. Keep your own running record of stakes and returns beside it. Statements are also available online at any time, and providers must keep transaction records available for at least the past 7 years. The guide to tracking betting results sets out a record you can keep yourself.
Mistakes people make about tax and betting
| Belief | What actually applies |
|---|---|
| Winnings are tax free for everyone | For most people winnings are not assessable, unless betting is carried on as a business |
| Betting losses can come off your wage income | Not when betting is not a business: Brajkovich's losses were held not deductible |
| The bookmaker takes tax out of a winning collect | POCT is charged on the bookmaker's net wagering revenue, not on a punter's win |
| A won asset can be sold without a tax question | Its cost base is its market value when won, and a sale can make a capital gain |
| Every prize is treated like a raffle | A prize from a bank's or investment body's prize draw must be declared |
| Money from betting-related work counts as winnings | Wages and fees for services are assessable income |
When to get advice, and how to check who gives it
Ask a registered tax agent, or the ATO, rather than relying on general pages, when:
- your betting has several of the business features listed earlier, or sits alongside racing work such as breeding or training horses
- you earn money from betting-related work as well as from betting
- you have won an asset, or plan to sell one
- your betting has changed in a major way since your last return
Before you pay anyone, check them on the Tax Practitioners Board's public register. Generally only registered tax and BAS agents can charge a fee for tax agent services, and the register shows any conditions or sanctions on a practitioner. You can also apply to the ATO for a private ruling on your own facts. The Australian betting laws hub links the other legal rules that apply to betting.