Edited version of private advice

Authorisation Number: 1052124943048

Date of advice: 1 June 2023

Ruling

Subject: Assessable income and losses - betting and gambling activities

Question 1

Are any proceeds received from the betting and gambling activities assessable under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

No. Considering the factors of your case, it is the Commissioner's view that you are not carrying on a business of betting or gambling therefore the proceeds from these activities are not assessable income. Particular weight is given to the fact that the betting results in this case depend on chance rather than on skill and judgment. This is consistent with the principles set out in Taxation Ruling IT 2655 Income tax: betting and gambling - whether taxpayer carrying on business of betting or gambling (IT 2655).

Question 2

Are the losses from your betting and gambling activities deductible under section 8-5 of the ITAA 1997?

Answer

No, as you are not carrying on a business of betting or gambling the losses related to these activities will not be deductible under section 8-5 of the ITAA 1997.

This ruling applies for the following periods:

year ended 30 June 2022

year ending 30 June 2023

year ending 30 June 2024

year ending 30 June 2025

The scheme commenced on:

1 July 2021

Relevant facts and circumstances

You undertake betting and gambling activities.

You are XX years of age.

You are currently studying on a full-time basis.

You are a sports and gambling enthusiast and have a passion for gambling.

In relation to your betting and gambling activities you do not have a management or executive authority, employ any person, lease or utilise any space or have a business plan or budget.

Your activities primarily comprise of betting and gambling activities, but you also compile and compare gambling and sporting data on an ad hoc basis.

You undertake the activities principally for pleasure and recreational purposes.

You do not have access to any insider sources of information and all information used by you is available to the general public.

You only use software, tools and data available to the general public.

You use a paid subscription service which provides a comparison of odds across Australian bookmakers. You use this service to collate and compare odds and not to determine what bets are placed.

All bets placed are at your absolute discretion and based on your personal judgement, experience and intuition.

You do not use computer programs to place bets or rely on the computer programs to automate the betting process.

You are not part of any formal gambling group or syndicate.

You do not have any external financing or credit facilities.

You do not have a business plan, budget, accounting records or security arrangements.

You are supported by your XXX and do not solely rely on winnings to meet your day-to-day expenses.

You initially funded the activities from personal savings and your financial resources have grown organically. Your winnings are typically paid into a bank account in cash.

You do not use accounting software to keep records of your wins and losses.

You primarily bet on horse racing as well as Australian and International soccer, Australian National Rugby League, Australian and International cricket, Australian rules football and the American National Basketball Association. You may expand your activities into other sports in the future.

You have never undertaken training in relation to betting or gambling or collecting/analysing gambling and sporting data.

You are not involved in any professional undertaking relation to any of the sports on which bets are placed.

Your activities are not undertaken in association with any other related business activities, such as horse breeding or training.

You do not have any specialist skill, knowledge or training in any of the sports you place bets on.

You bet in one or more of the following ways:

•         in person at a TAB or other betting outlet or at an event;

•         online or remoteIy using your laptop, computer or mobile phone;

•         through Australian or foreign sportsbook accounts; and/or

•         through third-party agents and friends.

The majority of your bets are made online or remotely from your XXX at your XXXs' house either directly or through third-party friends and agents.

Your bets are typically made in advance prior to the relevant event.

You do not have any influence or control over the results of the sporting events you place bets on.

You spend on average approximately XX-XX hours per week collectively on the activities. However, the activities are conducted on an adhoc basis and there is variation from week-to-week (some weeks you spend X hours betting and in other weeks you may spend XX hours on betting).

You have estimated, on average, the number of individual bets placed ranges from XX to XX in any given week. However, you are unable to provide an accurate historical average figure as you do not maintain any records.

Your estimate of the total value of bets placed per week ranges from $XX to $XXX. However, you are unable to provide an accurate historical average figure as you do not maintain any records.

Your winnings or losses are entirely dependent on chance rather than skill.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 8-5