Are sports betting expenses a taxable activity?

Poker games, Lotto, sports betting, odds games, and other similar games are popular and many spend money in the hope of achieving a bigger win when using betwinner download. The Tax Act has rules about when gains are accidental and when they are not, as well as the tax liability for such gains.

Sports betting as a “business”?

In the past, the Directorate of Taxation has assumed that income from sports betting (odds) must consistently be treated as “random income” in accordance with the Tax Act. In a new statement of principle, it is nevertheless open to the possibility that situations may arise where income from such games does not have the character of being “random”, but as a result of the player’s knowledge and skills. The consequence is that sports betting can be considered a taxable activity. 

Can provide a basis for deductions for expenses

For income taxation itself, this has little meaning—tax must be paid anyway. On the other hand, it is of interest that taxpayers who run a business can claim deductions for expenses incurred to secure income. As a result, someone who engages in sports betting will be able to claim deductions for expenses incurred, in the same way as, for example, a professional poker player. The prerequisite is that the activity – sports betting or poker—is considered a business.

High threshold for tipping to be considered a taxable activity

The Tax Directorate’s opinion is that gains from sports betting will mainly and as a general rule arise based on chance, rather than the player’s knowledge and experience etc. Therefore, as a starting point, there will be no right to a deduction for the costs incurred by the player in connection with the sports betting.

The Directorate of Taxation emphasizes that the threshold for deciding that sports betting is a taxable activity will be high. Even if a player has a good knowledge of the game and how to increase the chances of winning, this will not be sufficient.

One must therefore demonstrate that the gambling activity is carried out methodically, purposefully, and to a certain extent, as well as that the activity can turn a profit over a certain period. 

If the player can show that he or she has acquired special knowledge about the game in order to increase his chances of winning, that he spends a significant amount of time playing, and thus can demonstrate that the degree of “randomness” in the winnings achieved is reduced, the requirement for “business” could be fulfilled. The player can then receive a deduction for the costs per Chapter 6 of the Tax Act.

The Tax Directorate’s revision of previous practice means that sports betting (odds betting) is equated with other probability-related games such as poker.

How Can NFT Be Used?

This is a big question because it is not the case that NFT is used as a currency, as something with which you can make bets. At least not yet. Instead, it has taken another form, as some sort of reward or opportunity to win. It has been seen lately that also well-known football clubs such as Liverpool have interfered in the NFT. And it does this by allowing you to buy unique NFTs that will represent the team, the players or the coach.

A bit of the same is the case with sports betting. But the difference lies in the fact that you cannot buy as such, but rather have the opportunity to win. When you win NFT via gambling, you then have the opportunity to sell it, or to collect the winnings directly from the operator you have played with.

It is also used as a motivation to register on betting sites, although it may not yet have fully reached operators who also operate.

Will It Dominate?

It is difficult to say whether it will dominate, but there is probably no doubt that it will be something that is present. Something that contributes greatly to this is that sports in general have welcomed NFT with open arms. The example of Liverpool above is just a simple one, because there are more, both in football, basketball, American football and others. And it’s not something that’s limited to one type of team either.

It is often better to be offered NFT that you can use to make a profit, rather than just buying it outright with your money. The concept is the same anyway, but it is presented differently. This is where NFT has its strength, and therefore it is going to become more and more popular among sports betting sites too!

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