How Some Governments are Profiting from Legalizing the Gambling Industry

gambling fund
gambling fund

Gambling is a recreational activity that is beloved by people from various parts of the globe. It has spurned a multi-billion-dollar industry that’s moving an enormous amount of money through various economies every single day. Whether it be through traditional land-based casinos, offshore gaming operations, or even online casino platforms, there are so many consumers stemming from different countries who actively engage in legal gambling activities daily. Aside from that, there is so much more unregulated gambling activity that takes place as well. In the past, many governments were hesitant to legalize and regulate gambling as a form of recreation. However, despite their better efforts, gambling movements still remained strong and forced many legislators to rethink their approach.

These days, more and more governments are shifting towards legalizing and regulating gambling within their respective jurisdictions. This is because of the colossal market that the gambling industry is ultimately made up of. The tax revenues that governments would be able to gain from regulated gambling activity proved to be one that many legislators just couldn’t ignore any longer. In this article, we are going to look at how various governments all over the world are benefitting from the legalization of the gambling industry.


The Nordic nations are notorious for taking such liberal stances on gambling legislation, and Sweden is a near perfect example of that. In Sweden, gambling laws dictate that the tax rate to the competitive sector amounts to 18% of the gross gambling revenue, which is paid out on a monthly basis. This is on top of the licensing fees that are involved in getting the proper certifications to operate gambling franchises under Swedish law. For example, a single license to operate a commercial online gambling platform amounts to SEK 400,000, which is only valid for five years. After that, a license renewal fee must be paid which amounts to SEK 300,000.  And this is a license that only covers online gambling services. This doesn’t include the license to offer sports betting or bingo services.

Germany and Italy

Aside from just taxes and fees, governments are also capable of earning money through the taxes generated from individual winnings of gamblers. In a country like Germany which also has a very vibrant gambling culture and community, taxes can vary greatly depending on the amount and the nature of the game. However, for the most part, the Race Betting and Lotteries Act of 2021 mandates that a 5.3% tax be imposed on sports and horse race betting stakes. This also includes virtual slot and online poker games. Italy has benefitted greatly from this kind of system. In 2019 alone, just a year before the global pandemic, the tax revenues for skill-based games in Italy amounted to 244 million Euros. With fixed-odds sports betting, the government earned tax revenues as high as 174 million Euros. Even though these revenues experienced a rapid decline in 2020 as a result of the pandemic, many experts believe that the gambling industry will continue to contribute to the nation’s government in the future once the COVID-19 virus has been properly contained and dealt with.


The country of Canada also has a very unique approach to tax revenues for gambling activities. In Canada, gambling winnings are considered non-taxable because they aren’t categorized as a constant source of income and do not come from a person’s employment. However, full-time gamblers or people who gamble professionally are required by law to file taxes. For example, professional poker players need to treat their gambling affairs as a kind of freelance business. As such, they must pay income taxes. The only kinds of taxes that the Canadian government claims from gambling activity is through the revenues that are attained by casinos and gambling operators around the country. Fortunately, Canada has a number of different casinos, both online and land-based, that are accessible to natives all around the country. This makes their gambling market one of the most lucrative in the world. However, it’s important to note that Canada’s provinces have independence when it comes to mandating gambling laws. There are five different gambling commissions in Canada that oversee all of its 10 provinces and three territories. This is because some provinces are small enough that a single commission can oversee and regulate the gambling activity in multiple provinces that are looped together. All of this is possible because of Canada’s C-218 legislation which has made it lawful for provinces to administer and regulate single-game sports betting and gambling activities.

United States

When it comes to gambling in the United States, there’s another added benefit to the legalization of gambling as a form of recreation. Much of the tourism sector in the country is dependent on the legalization of gambling, especially when it comes to the cities of Las Vegas and Atlantic City. Las Vegas is a go-to tourist destination for people all over the world. And one of the major driving attractions of Las Vegas is the fact that it serves as one of the most vibrant gambling hubs in existence. Despite this, there are still many states in the United States like Texas that have outlawed the establishment of any gambling operation outright. This is because gambling laws are also subject to state legislation and aren’t necessarily bound by federal law just like Canada. However, one key difference is that not all American states legalize gambling while all Canadian provinces and territories promote gambling in some shape or form.