So you just won a lot of money in the casino or have a steady income from poker or sportsbetting. Congratulations! You literally beat the odds.
Before you look into exotic solutions, carefully consider just having the winnings paid out to your local bank account. It’s a lot easier and if for example you reside in the EU and the winnings are from an EU-licensed gambling site, you may very well be able to take the winnings home free of tax.
But maybe tax isn’t the reason you seek some privacy regarding your winnings. Maybe you don’t want your significant other or family member to accidentally see your bank statement. Maybe you don’t want someone else to see your bank statement. Maybe you don’t want your bank to know your full financial standing. Whatever your reason – I am not here to pass judgment.
Let’s get some basics out of the way.
Can Tax Authorities Compel Operators to Disclose Information?
Technically yes, either directly or by asking the local gambling authority acquire the information. In reality, there is no easy way for the typical tax authority to find out information from a gambling company.
Information held by gambling companies are not subject to regular exchange of information requests, though.
Do Gambling Companies Report Winnings?
The most popular gambling jurisdictions do not have such requirements. They instead rely on the gambling operator to keep records which are audited every year.
Newer licensing jurisdictions, whose licenses are just good for a single jurisdictions, may have such requirements.
Are E-Wallets Like Neteller and Skrill (Moneybookers) Required To Report Accounts/Balances?
Under current regulations and guidelines, e-wallets are not required to file any reports unless suspicious activity is detected on an account.
Can Authorities Compel E-Wallets Like Neteller and Skrill To Disclose Information?
Yes, tax authorities and financial conduct authorities alike.
Offshore Bank Account for Gambling
Now that’s a headline.
For some reason, you have decided that you want to open a personal bank account offshore (forget about corporate accounts) to store your gambling proceeds.
Banks receptive to clients wishing to use their accounts for gambling withdrawals can be found in Cyprus (FBME used to be king, but obviously isn’t anymore), Malta (subject to strict KYC), Austria (high minimum deposits), Seychelles, Panama, Latvia, Moldova (very rare to open remotely), Mauritius (very touch-and-go), and Bahamas and several other Caribbean islands.
The actual account opening isn’t always straight forward, and depends on type of winnings.
If you won a big jackpot, your list of available banks may in fact increase and include Switzerland, Monaco, Andorra, and other wealth management centers. They will only agree to private banking and not act as financial conduits, though.
Alert the bank in advance about the incoming funds. Six, seven, or higher figure deposits are going to make any bank panic a little, especially going to a personal account. Expect to have to explain the origin of the funds, including the deposit you made to the casino in order to play whatever game you won the jackpot on.
In most cases, the gambling site will be happy to provide evidence of game rounds and proof that they are licensed themselves and that the games are vetted by reliable third parties. However, note that the gambling site itself cannot give you any financial advice. They might be able to refer you to someone, though.
This is mostly for poker players and sportsbook/betting exchange punters, who have steady streams of income.
Whatever your reasons for wanting to withdraw your winnings to an offshore bank, it is often wise to pad the winnings by regularly moving savings in from another bank account. This shows the bank that you are using them for setting aside savings, and sometimes you withdraw winnings which also go towards saving. Of course, it also creates a trail between your normal income/finance and the bank account opened for gambling winnings.
Sooner or later, though, the bank is probably going to ask where the money is coming from. Prepare for this by keeping records of your play history. The bank won’t ever ask for or look through it, but this is a case of where having and being able to show can make a difference. Record keeping in and of itself
Withdrawing The Money
Here it’s important to build up a repertoire with the bank where you do not give them any reason to believe that the money is being laundered or were fraudulently obtained. The best is to keep the money idle for a couple of months.
This doesn’t apply to very large jackpots deposited into wealth management. Private banking works differently from regular banking in this regard.
Gambling Site → E-Wallet → Bank Account
This is the dream a lot of people have when they want to hide their poker winnings. The reality is that adding an e-wallet in the middle does nothing to significantly improve your financial privacy. As we discussed earlier, it is easy to get information from an e-wallet; easier than it is from a bank in most cases.
For one, regulators can more easily penetrate e-wallets thank bank accounts.
Secondly, many e-wallets are only protected by username and password, whereas banks in mature markets and increasingly in maturing markets have some form of two-factor authentication (PIN pad, SMS code, and so on). This makes it trivial to break into an e-wallet account. Although there are mechanisms in place to prevent outright there, your financial privacy has been breached already.
Many e-wallets will object to withdrawal requests to a bank account in another country than the country of residence of the e-wallet owner – even intra-EU/SEPA. Some only allow it after you have used a local bank account.
Gambling Site → Bank Account
Gambling operators rarely care where you withdraw funds to, unless it is to a regulated, sanctioned, or forbidden jurisdiction.
Examples of regulated jurisdictions include Italy, Denmark, Netherlands, and Australia.
Sanctioned depends on the location of the gambling operator but typically this is Iran, North Korea, and so on.
Forbidden jurisdictions are jurisdictions with an unclear legislation or which are simply not worth the risk of remitting gambling proceeds into, such as the US and Russia.
Stay clear of those types of jurisdictions and your gambling company will most likely be happy to wire funds anywhere. At most, they will ask for a bank statement for the new bank account (in addition to all the other usual KYC).