The short answer
For most Australians, pokies winnings are not taxed. The Australian Taxation Office does not treat gambling wins as income for people who gamble as a pastime, and that applies in the same way to a pub pokie, a Melbourne Cup bet and an online pokies site. There is usually nothing to declare on your tax return, and nothing is withheld when a site pays you.
The flip side is that losses cannot be claimed. A recreational gambler who is down for the year gets no deduction. Two situations change the picture: gambling that is carried on as a business, and using cryptocurrency to deposit or bet.
This page is general information, not tax advice. Your own circumstances may differ; a registered tax agent can advise on them.
Why gambling wins are not income
Australian tax law taxes income from work, business and investments. A win from a game of chance is treated as a windfall rather than a return on effort or capital, so for a recreational player it falls outside income. The ATO’s guidance on crypto prizes applies the same idea: gambling winnings are not ordinary income and any gain from the win itself is disregarded.
This is also why the question of where a site is based does not change the answer for the winner. An offshore pokies site is outside the Australian licensing system (our legal guide covers that), but a win you receive from it is treated the same way as a win in a venue.
When gambling can be taxed: the business test
The exception is a person whose gambling amounts to a business. The factors looked at include whether the activity is organised and systematic, carried on at scale, run with records and a plan to make a profit, and relied on as a source of living. Courts have rarely found that a gambler meets this test, and a pokies player is an unlikely candidate because pokies have a built-in house edge that no system overcomes. If your gambling is large, regular and methodical, get advice rather than assuming either way.
Crypto: the part that catches people out
Cryptocurrency is a capital gains tax asset in Australia. Using it to place a bet or fund a gambling account counts as disposing of it, so any increase in value since you acquired it is a capital gain at that moment, even though the gambling win that follows is not taxed.
The ATO’s own example works like this:
- You bought crypto for A$50.
- It is worth A$200 when you spend it on an online gambling platform. That is a A$150 capital gain.
- You win crypto worth A$4,000. The A$3,800 gain from the bet is disregarded.
- The crypto you won has a cost base equal to its market value when you won it, so if you hold it and it rises before you sell, that later rise can be a capital gain too.
Keep a record of the value of every crypto deposit and withdrawal. Our crypto pokies page lists the sites that accept crypto and the separate terms that usually come with it.
Large wins and your bank
A tax-free win can still attract questions. Banks may ask about the source of a large incoming transfer, particularly from an overseas company, and a deposit that does not match your usual activity may trigger checks. Keep the site’s transaction history, the withdrawal confirmation and your account statements together, so you can show that a payment was a gambling win.
Taxes that fall on operators instead
Players do not pay tax on wins, but gambling is taxed elsewhere. Each state and territory taxes licensed wagering operators on bets placed by its residents, known as point of consumption taxes, and venue pokies are taxed through the licensing of clubs, hotels and casinos. Offshore pokies sites sit outside those systems.
Records worth keeping
- Transaction and withdrawal history exported from the site.
- Bank statements showing deposits and withdrawals.
- For crypto: the date, amount and Australian dollar value of each purchase, deposit and withdrawal.
- Any correspondence with the operator about large wins or account checks.
If gambling is costing more than you planned
Winnings being tax-free does not make gambling a way to earn money. Gambling Help Online is free and confidential, 24 hours a day, on 1800 858 858. Our responsible gambling page lists the limit tools available at the sites we track.
