Philippine Racing Franchise Tax and Tax on Racing Winnings (RA 7953)

Winnings tax rates: 10% standard, 4% on double, forecast and trifecta bets

The tax on a bettor's winnings is set out in the racing franchise law, Republic Act No. 7953. Every person who wins in horse racing pays a tax equal to 10% of their winnings or dividends. The important detail is how that figure is worked out: the tax is based on the actual amount paid to you for each winning ticket, after the cost of the ticket has been deducted¹.

So if you hold a winning ticket, the operator does not tax the headline payout. It taxes what you actually receive once the price you paid for the ticket is taken off. That is the base the 10% is applied to.

There is a lower rate for the more complex bets. Winnings from double, forecast or quinella and trifecta bets are taxed at 4% rather than 10%¹. If you are working out what a forecast or trifecta collect will actually leave in your hand, use 4%, not 10%.

Base: Amount paid to you, after deducting ticket cost

The tax is withheld at source, so you do not have to file anything to pay it. What you are handed at the payout window is already net. If you want to know which bet types these names refer to, the bet types guide covers win, place, quinella, trifecta and the multi-race bets, and there are separate pages on quinella and quinella place and on trifecta and trio bets.

One practical point on the 4% bets: they are the ones where a single ticket can carry a large collect, so the difference between 4% and 10% is worth knowing before you choose what to play.

Tax on winning race horses: 10% of the prize

The same section of the law taxes the horse, not just the bettor. In the case of winning race horses, the tax is 10% of the prize¹.

This is a separate charge from the tax on a bettor's winnings. It applies to the prize money attached to the race, and it is the horse's connections, the owner and the stable, who deal with it, not the person holding a ticket. If you are a spectator or a punter, this line does not touch your payout. If you own or part-own a runner, it does.

The two taxes sit side by side in the same provision, which is why they are often confused. A winning bet and a winning horse are two different taxable events on the same race.

Who may take bets under RA 6632 and where

The franchise to run horse racing and take bets on it comes from Republic Act No. 6632. Under that law, bets may be taken within the premises where the horse races are held and at duly established branches. No other entity or person may take or arrange any bet on the grantee's races, or maintain or use a totalizator or other betting device on them².

In plain terms: there is one franchise holder for a given set of races, and it takes bets itself or through authorized agents. Nobody else can legally run a book on those races. That is why you will not find a licensed independent bookmaker taking bets on Philippine races the way you might in some other jurisdictions.

For a bettor, the practical effect is simple. You place your bet at the track, or at a branch of the franchise holder. You are not choosing between competing operators. If you are new to the mechanics of placing a bet at a Philippine track, the getting started guide on the main racing page walks through the basics of a day at the races.

Admission to a racetrack is often free³. That means the cost of a day out is essentially your bets, plus whatever you spend on food and transport. There is no ticket price to get in at many meetings, so a first visit does not require a big outlay.

Payout rule: 84% of the wager fund distributed as dividends

The franchise law also fixes how much of the money taken in must go back out. Eighty-four percent of the wager fund, or the gross receipts from total sales of betting tickets during the entire racing day, must be distributed in the form of dividends among the holders of betting tickets².

That 84% is the pool that gets shared among winning tickets. The rest covers the operator's costs, the taxes described above and the franchise obligations. It is a useful number to hold in your head, because it tells you the take on a Philippine race is fixed by law rather than set freely by the operator.

If you want to compare that with how other Asian jurisdictions structure their pools and duties, the betting duty and franchise tax page sets out the different models side by side.

How the tax works on the day

The tax is not something you calculate at the window. It is deducted before you are paid, so the figure you are handed is the net amount.

The base is the amount actually paid to you, after the ticket cost is deducted, not the gross pool figure¹. On a standard win or place bet, 10% of that amount is withheld. On a double, forecast or quinella and trifecta bet, 4% is withheld instead¹. The lower rate applies only to those bet types.

A few things worth knowing before you go:

• The tax is withheld at source, so there is no separate filing step for a bettor's winnings.
• The lower 4% rate applies only to double, forecast or quinella and trifecta winnings¹.
• The horse's prize is taxed separately at 10%¹.
• Bets can only be placed with the franchise holder or its authorized agents, at the track or at established branches².
• Admission to a racetrack is often free³.

Where the rules differ for visitors and residents

The tax rates do not change depending on who you are. The 10% and 4% rates apply to every person who wins in horse racing, and the 10% on a winning horse's prize applies to the prize regardless of the owner's nationality¹. There is no separate visitor rate and no exemption for foreign residents.

What does differ is where you can bet. Bets are taken at the racecourse premises and at duly established branches of the franchise holder². A visitor can walk up and bet at the track in the same way a resident can, and admission is often free³. You do not need to be a member of anything to place a bet at the track.

The one group that is restricted is the people working the meeting. Betting is confined to the franchise holder and its agents, and the people running the races are not in the business of taking the other side of their own product.

If you are visiting from elsewhere in Asia and want to know how the Philippine setup compares with what you are used to at home, the country guides cover the ground rules jurisdiction by jurisdiction, including the Philippines, Hong Kong, Japan and South Korea.

What is RA 7953 Section 10?

Section 10 is the provision that sets the tax on racing winnings. It imposes the 10% tax on every person who wins in horse racing, based on the actual amount paid for each winning ticket after deducting the ticket cost, sets the 4% rate for double, forecast or quinella and trifecta winnings, and imposes the 10% tax on the prize of a winning race horse¹.

That is the whole of what an ordinary bettor needs from it. The section does not change how you place a bet or where you collect. It only determines what is taken out before the money reaches you.