Declaring Gambling Winnings on a Tax Return

Which countries tax gambling winnings: the short answer

The answer changes completely from one country to the next, so it helps to start with a map of the region.

In Singapore, winnings from betting or lottery are not taxable because they are windfalls rather than income. In Hong Kong, the tax authorities do not demand betting duty from winners of cash prizes from lucky draws, and no bills or receipts are issued to them⁵. In Macau, no tax is taken from individual winners; the roughly 39 percent gaming tax is assessed on the casino's gross gaming revenue, so it is the operator's bill, not yours⁶.

Japan sits in the middle. Prizes from the public lottery, including the sports promotion lottery known as toto, are exempt from income tax altogether⁷. But payouts from public racing, meaning horse racing, keirin, auto racing and boat racing, are taxable, and so are most other gambling windfalls that are not on the short list of exemptions¹.

South Korea, China and Vietnam take a third approach: the tax is usually settled at the moment you are paid, so most winners never file anything themselves. In Korea, betting refunds are classified as other income and tax is withheld at the payout counter in most taxable cases². In China, lottery winnings above CNY 10,000 are taxed at 20 percent, with the lottery institution doing the withholding and the filing³. In Vietnam, prize winnings above a threshold are taxed at a flat 10 percent, while casino winnings are exempt⁴.

The rest of this page goes deep on Japan, the one country in the group where winners commonly have to file a return themselves. For a broader view across the region, see tax on gambling winnings in Asia.

Japan: occasional income and the JPY 500,000 special deduction

Japan divides gambling windfalls into categories, and the category determines everything that follows.

Payouts from public racing, meaning horse racing, keirin, auto racing and boat racing, are in principle temporary income, called ichiji shotoku¹. Temporary income is Japan's bucket for one-off windfalls: prize money from contests, sweepstakes and raffle prizes all sit here too, as do horse racing and bicycle racing payouts, unless they come from continuous activity carried on for profit⁸. The same category catches most other gambling winnings that are not specifically exempt, which is why a big win at something outside the exempt list can still create a filing obligation.

The system then gives you two breaks. First, a special deduction of up to JPY 500,000 applies to temporary income⁹. Second, only half of what remains after the deduction is actually counted as taxable income. Both matter, and the second one is what makes the effective tax much lighter than it first looks.

Not everything is taxed, though. Prizes from the public lottery carry no income tax at all under the Public Lottery Act⁷. So a JPY 100 million lottery jackpot is yours free of Japanese income tax, while a JPY 6 million horse racing payout probably needs paperwork.

If you do need to file, the National Tax Agency's online tax return tool walks you through it: on the income selection screen you choose "temporary" and enter the payout under the temporary income section⁹.

How the tax is calculated: the formula with an example

The calculation for temporary income from racing payouts follows one formula:

Then, when your total tax is computed, only half of that temporary income amount is added to your other income, such as employment income, before the progressive rates are applied⁸.

A worked example makes it concrete. Say you hit a JPY 600,000 payout on a horse racing bet, and the winning tickets cost you JPY 50,000:

• Gross payout: JPY 600,000
• Minus winning ticket cost: JPY 50,000
• Minus special deduction: JPY 500,000
• Temporary income: JPY 50,000
• Amount added to your other income: half of JPY 50,000, which is JPY 25,000¹⁰

So although the payout was JPY 600,000, only JPY 25,000 of it ever touches your taxable income. At typical progressive rates, the actual tax on that slice is small. The special deduction applies to your total temporary income for the year, not to each payout separately, so several mid-sized wins during the year are added together before the deduction is taken once.

If you want to see how other countries work out the taxable amount, see how taxable winnings are calculated.

When you do not have to file in Japan

Two thresholds decide whether a Japanese filer can skip the return entirely.

First, if your total temporary income for the year does not exceed JPY 500,000, no final return is required, because the special deduction absorbs all of it¹⁰. Note that this is the income amount after subtracting the cost of winning tickets, not the gross payout, so a JPY 600,000 payout with JPY 100,000 in winning ticket costs still leaves you under the line.

Second, for people who receive a salary, the threshold is effectively higher. Because only half of temporary income counts toward the side-income limit that salary earners face, no final return is needed as long as total temporary income for the year does not exceed JPY 900,000¹⁰. The mechanics of that rule are explained further down this page.

And remember the exemptions: public lottery prizes never enter the calculation at all, whatever their size⁷. Even a nine-figure takarakuji jackpot is paid free of Japanese income tax.

Temporary income for public racing payouts: different rules

Public racing payouts follow a different track from other gambling income in Japan, and the differences are worth knowing before you file.

The category matters because temporary income gets the JPY 500,000 special deduction and the half-of-income rule, while other categories do not. If the tax office ever reclassified your racing winnings as miscellaneous income instead, both breaks would disappear. In practice, racing payouts are treated as temporary income unless the bettor has a systematic method with an expected recovery rate above 100 percent, in which case the winnings can be treated as miscellaneous income instead¹¹. For an ordinary weekend bettor, temporary income is the rule.

Because payouts can arrive in cash at a betting window, the tax office asks winners to keep simple records: the race date, the venue and the race; the amount received; and the amount bet on the winning ticket¹². A note on your phone or the payout receipt is enough. If you are ever asked to explain where a deposit came from, these records are what you would show; see proving the source of gambling winnings.

The racing operators themselves flag the issue too. The Japan Racing Association notes that there are cases where refunds are subject to income tax and inhabitant tax, and points bettors to the National Tax Agency's guidance¹³. Regional racing bodies say the same: payouts may be subject to tax and may require a final tax return¹².

Deducting ticket costs: what counts and what does not

Here is the rule that surprises most people: you can only subtract the purchase cost of the tickets that won. The cost of losing tickets cannot be deducted, no matter how much you spent on them¹³.

So if you bet JPY 30,000 across a day of races, hit one JPY 800,000 payout on a ticket that cost JPY 2,000, you subtract JPY 2,000, not JPY 30,000. The remaining JPY 28,000 of losing tickets is simply gone for tax purposes. This is stricter than the treatment in some Western countries and is the single most common mistake Japanese filers make.

The same rule applies across public sports betting generally: the calculation subtracts the purchase cost of winning tickets, then the special deduction, and losing ticket costs are excluded⁹. Keep your winning tickets or a record of them, since they are the only evidence of the deductible expense.

For how other countries treat losses against winnings, see deducting gambling losses.

One-time income: how half the amount is taxed

The half-of-income rule is what makes Japan's temporary income regime gentler than it looks. Half of the income amount is added to your other income, such as employment income, to compute your total income, and then tax is calculated on the whole⁸.

Take the earlier example one step further. Temporary income of JPY 50,000 means JPY 25,000 joins your salary in the tax calculation. If your marginal rate is, say, in the 20 percent band, the extra tax is about JPY 5,000 on a JPY 600,000 payout. The rule exists because temporary income is a windfall rather than earnings, and it effectively halves whatever rate the progressive schedule would otherwise charge.

The category also has edges worth knowing. Sweepstakes and raffle prizes count as one-time income, unless received in connection with a business⁸. Horse racing and bicycle racing payouts count too, unless they arise from continuous activity carried on for profit⁸. Someone betting systematically for a living can be moved into miscellaneous income, which loses both the special deduction and the half rule; that scenario is covered in professional gambler tax.

Employees: the JPY 200,000 side-income threshold

Salaried employees in Japan have a simplified filing rule: if their income besides their salary does not exceed JPY 200,000, they generally do not need to file a final return, because their employer's year-end adjustment covers the small amounts.

Temporary income interacts with this in a specific way. Since only half of temporary income counts toward the JPY 200,000 side-income limit, a salary earner can have up to JPY 900,000 of temporary income for the year before a final return becomes necessary¹⁰. The arithmetic: the special deduction comes off first, so JPY 900,000 of temporary income less the JPY 500,000 deduction leaves JPY 400,000, and half of that, JPY 200,000, is exactly the side-income limit¹⁰.

Two cautions. First, this only holds if you have no other side income, such as freelance earnings or rental income, eating into the JPY 200,000 allowance. Second, the thresholds apply to your total temporary income for the year, so wins at different tracks and different sports are added together. If you are close to the line, filing is the safer course; the consequences of not filing are covered in penalties for undeclared winnings.

Where the tax is settled at the payout

In most of the rest of the region, you never see a tax return at all, because the operator deducts the tax before handing over your money.

South Korea is the clearest example. Betting refunds are other income under the Income Tax Act, covering horse racing, cycling and boat racing, bullfighting and sports promotion voting tickets¹⁴. When the payout rate is 100 times or more, or the refund on an individual bet is KRW 2,000,000 or more, the operator withholds other income tax of 20 percent plus a resident tax of 10 percent of that amount, and pays you the rest². Below those levels, small refunds generally escape tax: no tax applies when the odds are 100 times or less and the refund is KRW 2,000,000 or less, or when the refund is KRW 100,000 or less regardless of odds². Very large wins face a heavier bite: lottery winnings over KRW 300,000,000 are subject to 33 percent withholding, made up of 30 percent income tax plus 3 percent resident tax¹⁵. The sports toto operators state the same rules in their game terms, and the Korea Racing Authority's own dictionary defines the refund as the bet amount multiplied by the refund rate, which is what the withholding is applied to.

China works the same way for lottery winners. Winnings are incidental income, taxed at a flat 20 percent on the full amount of each winning, with a single win meaning all prizes won by the same person in the same draw of the same game³. The exemption for wins of CNY 10,000 or less has been in place since the 1990s and continues under the current announcement³. When a computer lottery redemption exceeds CNY 3,000, the counter registers the winner's real-name identity and redemption information³.

Vietnam also settles at the payout. Prize winnings are taxed at a flat 10 percent on the value exceeding the threshold, a rule that applies to both resident and non-resident individuals¹⁶. Under the current circular the threshold is VND 10,000,000 per win, and from July 1, 2026 the new Personal Income Tax Law raises it to VND 20,000,000 per win⁴. Betting and wagering winnings are taxable, with the taxable base being the entire prize value above the threshold before expenses; casino winnings, by contrast, are exempt⁴. Where one prize has multiple winners, the taxable income is divided among them, but only if the winners can present legal proof, otherwise the whole amount is counted for one individual¹⁶.

The practical upshot: in these countries your payout is already net of tax, and you have nothing to declare later. How that withholding works in detail is covered in withholding tax on winnings, and if too much was withheld, tax refunds on winnings explains the recovery process.

What the law does not cover

A few boundaries are worth knowing because they surprise people.

In South Korea, the Income Tax Act does not care whether the gambling was legal. Property gains from participating in acts regulated under the gambling regulation act, whether lawful or unlawful, are other income¹⁷. The exempt list of racing and sports promotion refunds in the statute sits alongside this catch-all, so winnings from unregulated gambling are still taxable even though the activity itself may be off-limits.

In Singapore, the Gambling Control Act carves the casino out of most of its operative parts: the provisions on gambling do not apply to gambling carried on within any casino¹⁸. That is a licensing matter rather than a tax one, but it explains why the tax treatment of casino play follows a different track from other gambling on the island. The winner's side is simple either way: winnings are treated as windfalls rather than income.

Finally, remember what a gaming tax is. Macau's roughly 39 percent levy is assessed on the casino's gross gaming revenue⁶. It is a business tax on the operator, built into the house edge, and it never appears as a deduction from your chips when you cash out. The same is true of Hong Kong's betting duty on football bets, currently 50 percent of net stake revenue, which is levied on the operator, not the backer⁵. For more on how operator-level duties reach players indirectly, see how gambling duties affect players.