Fat Chance

The ATO is quite confused about gambling.

Certain forms of gambling are deemed not to be gambling, on the basis that the winnings tend to be the rewards for skill and judgement rather than purely betting on chance.

Chance? There is no form of gambling that relies on chance.

An event that is being gambled on might appear to be of an uncertain outcome but at the end of the day there is always a small fraction of the gambling population that reverts to a positive mean.

The rest lose money.

Gambling is all about the smart taking money off the not-so-smart.

There is no chance in that.

So when it comes to income assessment decisions, the ATO needs to differentiate between types of gamblers and not the types of gambling.

If you revert to a positive mean then your winnings should be assessed as income.

If you are in the majority that loses money then you should get a income tax deduction similar to that received for other charitable causes.