In reading through the poker world today, news from Greece pushed to the forefront: The Greek government has implemented an up to 20% “Player Withholding Tax” on online gambling. It doesn’t sound like much, but like everything the devil is in the details.
Suppose you play online poker in Greece, and you win €1,000. The first €100 is not taxed. The next €400 are taxed at 15% and the remaining €500 at 20%. So you really win €840. Let’s further suppose you lose €1,000 the very next day. There is no tax, but you’re two break-even days net you a loss of the withheld tax, €140.
That’s doesn’t sound that bad. It’s withheld tax; I can recover it when I file my income tax return. No, you can’t. Although it’s called withholding it’s not the same as withholding in the US–this tax is lost (to the government) for good. Effectively, it’s like you’re playing in any of the bad states for US gamblers: You can’t deduct your losses.
Professional gamblers in Greece do have the availability of the moving truck. While the climate in the United Kingdom is anything but similar to Greece, the tax climate in the UK for professional gamblers is (at least for now) sunny with mild temperatures. Gambling, even for professionals, isn’t taxed in the UK.
The end result for this new tax in Greece is that it will bring in less money than projected. The big gamblers who would otherwise fill the Greek coffers will make economic decisions that benefit themselves but not the Greek government.