Edited version of private advice

Authorisation Number: 1051857062479

Date of advice: 28 July 2021

Ruling

Subject: Business of gambling

Question 1

Are you considered a professional gambler?

Answer

No.

Taking in consideration the factors examined above, it is the Commissioner's view that you are not carrying on a business of betting or gambling, in relation to pokie machines and card table activities. In this regard, particular weight is given to the fact that the betting results in this case depend on chance rather than on skill and judgment. Consistent with the principle in Taxation Ruling IT 2655 Income tax: betting and gambling - whether taxpayer carrying on business of betting or gambling (IT 2655) that 'the intrusion of chance into the activity as a predominant ingredient' will generally preclude a finding that the gambling activities constitute a business, it is the Commissioner's view in this case that the predominant element of chance in your activities point away from the existence of a gambling or betting business.

Question 2

Is the income generated from your gambling assessable under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) for income tax purposes?

Answer

No.

As you are not a professional gambler carrying on a business of betting or gambling, the winnings received in relation to this activity will not be assessable under section 6-5 of the ITAA 1997.

Question 3

Are your deposits/expenses incurred in relation to the gambling activities deductible under section 8-1 of the ITAA 1997?

Answer

No.

As you are not a professional gambler carrying on a business of betting or gambling, the expenses/losses related to the activity will not be deductible under section 8-1 of the ITAA 1997.

Question 4

Are there any GST implications associated with the deposits or withdrawals of gambling funds?

Answer

No.

The provision of an interest in an account by an ADI is a financial supply under item 1 in the table in subsection 40-5.09(3) of the GST Regulations and, therefore, input taxed.

A deposit to or withdrawal from the account is not consideration for the provision of an interest in the account and therefore not subject to GST. As such, there are no GST implications associated with the deposits or withdrawals of gambling funds. No GST is payable and no GST credits can be claimed.

This ruling applies for the following period:

Year ended 30 June 2021

The scheme commences on:

1 July 2020

Relevant facts and circumstances

You operate a streaming business, using the platform A. Your handle is B.

The majority of your income is generated from viewers subscribing and the use of bit currency during your streams. There is also the ability to generate revenue from advertisements and donations during your steams; however, this is very minimal.

You often gamble on pokie machines and occasionally card tables, both on-line and land-based during your streams as it attracts a larger quantity of viewers, therefore generating income from streaming subscriptions.

The capital contributions to play are deposited from your private funds into the gambling platforms. Winnings paid out to your bank account are kept and often used for future streams.

Over the period of X months, you deposited $X funds into various pokies, with withdrawals to date amount to $X, resulting in an overall profit of $X.

You gamble to generate streaming income and is not expecting or seeking to make a profit from the gambling activity itself. You attribute your gambling wins to windfall gains.

Your streaming income from A is deposited into your business account. You also deposit any pokie wins into this account.

You also play in card tournaments, for which you are sponsored. These tournaments do not cost you anything to enter. All flights, meals, accommodation and entry fees are paid for.

You cannot win prize money at these tournaments; instead you generate income only through streaming views and sale of your clothing brands/hats etc they advertise at the tournaments.

If you chose to contribute your own funds to tables during these tournaments, you would be entitled to keep any winnings you make. You currently choose not to do this.

Other Circumstances:

You had owned a share in a tipping page where customers pay to have access to tipping recommendations. These tips were in relation to various things including, but not limited to, dogs, horses, sporting matches and elections.

You consider this as a separate business and all income derived from these subscriptions assessable to the taxpayer.

On a separate social media page you, which you don't charge viewers, you post tips and bets, including bets placed for your own personal enjoyment.

Assumptions

The extent of the gambling activities are limited to what was provided in the above relevant facts and circumstances.

The card tournaments that you are sponsored for, where all flights, meals, accommodation and entry fees are paid for, may be taxable as it is conducted as a promotional activity.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 8-1

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Regulations 2019 regulation 40-5.09(3)

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