do you have to declare your income for tax purposes?

From the stands or from the bench, more than 3.8 million French people have bet on the outcome of a sporting event in 2020. At the final whistle, some leave, but others pocket money, sometimes significantly. Is this income taxable? Yes and no, answers the tax authorities. explanation.

Sports betting is popular. Whether for profit, or just to spice up a match, 3.8 million of the French made an online bet in 2020, according to figures from the National Gaming Authority (ANJ). That is 12% more than a year ago.

This boom in fame is no coincidence: according to the online gaming police officer, bookmakers have invested more than € 200 million euros in ad campaigns in 2019 alone and paid off. In total, the French have more than 5.3 billion euros in 2020. A record amount.

The gamblers, mainly men from under 35spend on average 237 euros per year. If you made a profit betting on your favorite football team, tennis player or F1 driver, do you need to report it on your 2022 tax return?

E-sport brings life

With the development of video game competitions,esports is now also the subject of many online betting. From a tax point of view, these are equated with classic sports betting.

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Scenario 1: Your earnings are irregular

Article 92 of the General Tax Code (CGI) makes it possible to non-commercial profit (BNC) all occupations, lucrative activities and sources of profit unrelated to any other category of profit or income. This is what tax experts call a broom clauseallowing the tax authorities to tax a number of sources of profit that would otherwise be taxed.

Sports betting winnings are a special case, however. Except in exceptional circumstances, the practice, even ordinary ones, of games of chance, such as sports parties, does not constitute a lucrative profession or a source of profit within the meaning of Article 92 of the CGI, because of the risk that weighs on the player’s income prospects. Franck Demailly, attorney at AJE.

Result: In the vast majority of cases you do not need to declare your income. And this, even if your earnings are significant. In a decision of 21 March 1980 concerning betting on horse races, the Council of State had the opportunity to recall that winnings from games of chance were not taxable, even if they exceeded the amount of other taxpayers’ income. , explains Franck Demailly.

Indirect taxes

Despite everything, the Tax and Customs Administration gets its share of the proceeds. Sports betting operators recognized by the ANJ must indeed pay a tax. Previously, this tax applied to players’ wagers. Since 2019, it focuses on the gross gaming revenueie the difference between the amounts wagered by the players and the amounts paid out to the winners.

This tax, seemingly painless for gamblers, nevertheless affects your profit prospects, albeit indirectly, insofar as bookmakers such as Unibet, Winamax or even Betclic pass it partly on to the odds, which therefore weaker in France and abroad.

Taxes: are you concerned about this new income that is already known to the tax authorities?

Scenario 2: Your earnings are regular

However, there is a much rarer scenario where the income generated may be taxable. This is particularly the case when the tax authorities are of the opinion that: the danger normally inherent in games of chance can be eliminated or at least greatly reduced by the gambler

This is especially the case for a poker player chevron. The jurisprudence believes that a regular poker player can significantly reduce the randomness of the outcome of this game and increase his chances of making significant and regular wins because of his experience, says Franck Demailly.

But can this reasoning apply to? sports gamblers† The answer seems less obvious. Indeed, the position of a sports gambler is a bit different because even when he studies odds and turns, he remains just a spectator of the sports event, unlike a poker player who can influence a game.

In total: the blur remains† As far as sports betting is concerned, there is still no established case law that would make it possible to determine the positive law in this regard, in particular on the concept of exceptional circumstances which would leave the possibility to tax profits from sports betting, summarizes Frank Demailly.

However, if you win too often and the amount of the winnings is significant, the tax authorities may consider you a professional gambler, in which case your winnings become taxable. However, the assessment is made on a case-by-case basis, the Directorate General of Public Finance (DGFiP) points out, without specifying the frequency or amount it deems a gambler to be exercising as a professional.

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