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AU · en-AU · Updated 24 Sep 2026 · 8 min read

Do You Pay Tax on Gambling Winnings in Australia?

For most people, no. Under ATO taxation ruling IT 2655, the winnings of an ordinary punter are not assessable income, and by the same logic their losses are not tax deductible. The ATO accepts that gambling can be a business, but says that is rare, and gambling with a significant element of skill is more likely to have tax consequences. Crypto you win is not taxed as a win either, but it takes a cost base equal to its market value on the day you won it, so selling it later can trigger capital gains tax.

Written byJack Sullivan · Australia Market Editor
Edited byJohn Myer · Editor-in-Chief
Fact-checked byPurvi Patel · Head of Research
Compliance reviewSasha Stann, CCRP

Australians who win at the races, on the pokies or at an online casino usually keep the whole amount, and those who lose cannot claim it back at tax time. The position comes from the way Australian courts have treated gambling, which the Australian Taxation Office summarises in taxation ruling IT 2655, issued on 17 October 1991 and still published in the ATO legal database. This page walks through what the ruling says, the test for when gambling becomes a business, the separate rule for crypto you win, and the questions the ruling leaves open, including winnings from offshore casinos. It is general information, not tax advice.

What ATO ruling IT 2655 says about punters

The key sentence in the ruling: "There is no Australian case in which the winnings of a mere punter have been held to be assessable." The other side of the same coin is that a mere punter's losses are not deductible. This is our summary of a public ATO ruling, not advice on your own tax position.

Hobby or business: the four Brajkovich questions

Question from the rulingPoints towards a mere punterPoints towards a business
Is the gambling systematic, organised and conducted in a businesslike way?Bets placed when the mood strikes, no recordsPlanned, recorded and organised the way a business would be
What is the volume and size of the activity?Occasional bets, modest stakesLarge and frequent bets
Is it connected with other businesslike activities?No connection beyond bettingLinked to a related business, such as breeding horses
Is it driven mainly by profit or by pleasure?Mainly entertainmentMainly profit
How much do chance and skill decide the result?Chance is the predominant ingredientA significant element of skill

The first four rows are the criteria from the Brajkovich case that the ruling relies on; the last row reflects the ruling's own comments on chance and skill. No single answer settles the question. The ruling says it will be rare for a taxpayer "with no connection with racing other than betting" to be carrying on a business, and that "the intrusion of chance into the activity as a predominant ingredient" will generally prevent gambling from being treated as a business. That is why a large win, on its own, does not change a punter into a professional.

Source: ATO, Taxation ruling IT 2655.

Where skill changes the picture

The ruling states that "gambling which involves a significant element of skill is more likely to have tax consequences". It does not name particular games, and it was written in 1991, well before online poker rooms or betting models existed. What it gives is a direction: the more your results come from skill, method and volume rather than luck, the closer you move to the business side of the table above.

Someone who plays online pokies or roulette for fun sits clearly on the punter side, because the result of each spin is chance. Someone who plays poker seriously for years, keeps detailed records and relies on the results for a living is in a different position. Most people fall somewhere between, and that middle ground is exactly where a registered tax agent earns their fee.

Crypto you win and capital gains tax

The ATO page on crypto asset prizes and gambling winnings (updated 22 June 2026) adds a rule that matters for anyone paid in coins. Gains and losses from gambling are disregarded for capital gains tax. The same page says prizes won in ordinary lotteries, such as lotto draws and raffles, and prizes won on game shows are generally not ordinary income. But crypto you win becomes an asset you own, with a cost base equal to its market value at the time you won it, and when you later sell or otherwise dispose of it, that disposal can be a CGT event. The ATO gives this example:

  1. The win: a person wins crypto assets worth A$20,000 in an online lottery. That A$20,000 becomes the cost base.
  2. The wait: they hold the coins for 2 years.
  3. The sale: they sell for A$30,000, a capital gain of A$10,000.
  4. The discount: because they held the assets for more than 12 months, the CGT discount applies and the net capital gain is A$5,000.
Bar chart of the ATO crypto example: A$20,000 cost base when won, A$30,000 sale price two years later, A$10,000 capital gain and A$5,000 net capital gain after the 12-month discount.
ATO example: A$20,000 cost base when won, A$30,000 sale price two years later, A$10,000 capital gain, A$5,000 net capital gain after the 12-month discount

Put simply, the win itself is not taxed, but the change in value after you win can be. That is why the A$ value on the day a crypto win lands in your wallet is worth writing down. Offshore casinos that pay in coins, like the ones in our crypto casinos guide, show balances in the coin, not in Australian dollars. Other crypto steps around gambling, such as swapping coins to make a deposit, are outside what we checked; ask the ATO or a registered tax agent.

Source: ATO, Crypto asset prizes and gambling winnings (updated 22 June 2026).

Five situations, read against the ruling

To make the principles concrete, here is how the ruling and the ATO crypto page line up with some common situations. These are illustrations of the published guidance, not rulings on anyone's return.

SituationWhat the ATO guidance points to
A weekend pokies player at a club lands a large winMere punter: chance is the predominant ingredient, so the win is not assessable
A casual player wins at an online casino licensed overseasThe punter principles describe the activity, but the ruling does not address offshore sites; ask the ATO or a tax agent if unsure
A player is paid a win in crypto and sells the coins a year and a half later for moreThe win is disregarded for CGT; the rise in value after the win can be a capital gain
A bettor runs a written system, high volume and detailed records, aiming for profitSeveral Brajkovich questions point towards a business; get advice
A horse breeder who also bets heavily on racesA link to other businesslike activity is one of the factors the ruling lists

The pattern is consistent: the size of a single win matters far less than how the gambling is carried on. Where several business indicators line up, the answer can change, and that is the point to stop reading guides and speak to someone who can see the whole picture.

Is there a dollar limit before winnings are taxed?

No dollar threshold appears in IT 2655. The ruling does not say winnings become taxable above a set amount. The test is about how you gamble overall, including the volume and size of your activity, not a cut-off figure for a single win. If you see a "gambling winnings tax threshold" quoted for Australia, ask where it comes from, because it is not in the ruling. For the same reason, an ordinary punter normally has nothing to declare for winnings and nothing to claim for losses: both sit outside assessable income and deductions.

Offshore casinos: what the ruling leaves open

IT 2655 dates from 1991 and does not address offshore gambling sites at all. We read the ruling and the ATO crypto page only, and found nothing in either that deals specifically with winnings from an overseas online casino. Online casino games may not be offered to people in Australia, so any online casino that accepts Australians, including those compared on our best online casinos Australia page, operates from overseas. The general principles above describe how the ATO treats a mere punter; whether anything about an offshore site changes that in your case is a question for the ATO or a registered tax agent, not for us.

Records worth keeping anyway

  • Crypto wins: the date, the coin, the amount and its A$ market value when it reached you. That figure is the cost base the ATO example starts from.
  • Deposits and withdrawals: casino and bank or wallet statements, which show where money came from if a large deposit lands in your bank account.
  • If skill or volume is high: a simple log of sessions, stakes and results gives an adviser something concrete to work with.
A tax-free win is still a gambling result, and the losses that come with it are not deductible for a punter. If keeping records shows you are spending more than you meant to, the National Gambling Helpline on 1800 858 858 is free, confidential and open 24/7.
Sources: ATO, IT 2655; ATO, Crypto asset prizes and gambling winnings.

Frequently asked questions

Do I have to declare casino winnings on my tax return?
For an ordinary punter, the ATO's ruling IT 2655 treats winnings as not assessable income, so they are not income for tax purposes. The exception is someone carrying on a business of gambling, which the ATO says is rare. If you are unsure which side you fall on, ask the ATO or a registered tax agent.
Can I claim gambling losses as a tax deduction?
Not as a mere punter. The ruling treats winnings and losses the same way: winnings are not assessable and losses are not deductible. Only a person carrying on a business of gambling is in a different position.
Are poker winnings taxed in Australia?
IT 2655 does not name poker. It says gambling with a significant element of skill is more likely to have tax consequences, and the Brajkovich questions (organisation, volume, links to other business, profit or pleasure) decide whether there is a business. Recreational players are usually punters; serious, systematic players should get advice.
Is crypto I win at a casino taxed?
The win itself is disregarded for capital gains tax, but the coins take a cost base equal to their market value when you won them. If you later sell them for more, the gain can be taxed. In the ATO example, A$20,000 won and sold two years later for A$30,000 leaves a A$5,000 net capital gain after the discount.
Is lottery or lotto prize money taxable?
The ATO says prizes won in ordinary lotteries, such as lotto draws and raffles, are generally not ordinary income. If the prize is paid in crypto, the later sale can still be a CGT event, as in the ATO example.
Does the ATO see my gambling winnings?
We did not check what information the ATO receives from banks, casinos or bookmakers, so we cannot say. What we can say is that, under IT 2655, a mere punter's winnings are not assessable income in the first place.

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18+ only. General information, not legal or tax advice. This page summarises ATO ruling IT 2655 and the ATO crypto prizes page as read on 24 Sep 2026; for your own situation ask the ATO or a registered tax agent.