Rolling the Dice on Taxes: How the UAE’s Corporate Tax Could Shake Up the Casino Jackpot

The UAE is known for its tax-friendly environment, with no personal income tax levied on residents. However, corporations operating in the UAE face new regulations—a corporate tax of 9% on profits over AED 375,000 (approximately $100,000 USD). This move, though relatively modest compared to global standards, raised some eyebrows, particularly among multinational enterprises (MNEs). These larger corporations must pay an even higher 15% corporate tax on their profits as of the 1st Jan 2025, aligning with international efforts to prevent tax avoidance among global giants.

This tax shift comes at a fascinating time, coinciding with the highly anticipated opening of casinos and the official launch of the national lottery scene. According to Bloomberg, the UAE’s gaming and lottery industry is expected to contribute a staggering $7 billion USD to the economy annually. Of course, not all of this will be taxable profit, but it doesn’t take a wizard mathematician—or a seasoned card counter—to see that this represents a significant new revenue stream for both businesses and the UAE government.

A Taxing Question for Multinational Operators: Is 15% a Dealbreaker?

A prime example of a multinational company impacted by the 15% rate is Wynn Resorts Ltd., whose Al Marjan Island project will be the first resort in the UAE to feature a legal casino. This raises a key question: how does the UAE’s corporate tax compare to Wynn’s tax obligations back home?

In Las Vegas, Nevada boasts a relatively low corporate tax rate of 6.5%, though operators still pay a 6.75% gaming tax on casino revenue. This combined figure is still lower than the UAE’s 15% corporate tax alone. However, the UAE’s lack of income tax for executives and employees—and the prestige of entering an untapped market—may offset concerns about higher corporate taxes.

The cost of doing business in the UAE is also relatively lower, than say, Las Vegas. This is mainly due to the cheaper labour costs that the UAE has to offer.

Will the Tax Discourage New Casino Operators?

While the 15% rate may seem steep compared to Las Vegas, it’s unlikely to turn away the world’s leading gaming operators. The allure of being early players in an emerging market as lucrative as the UAE—and the potential to capture a market that could rival global gaming hubs—far outweighs the initial tax concerns for most multinationals.

Moreover, the UAE offers an unmatched combination of political stability, luxury tourism appeal, and minimal regulatory hurdles compared to some jurisdictions. However, the bigger question remains…

Could the UAE Introduce a Tax on Gambling Winnings?

Although the UAE does not currently tax personal income, it’s worth speculating whether gambling winnings—particularly from lotteries—could become subject to taxation. Countries like the US impose federal and state taxes on gambling winnings, ranging from 24% to over 30%. Introducing a similar system in the UAE could provide another revenue stream for the government.

However, it’s not just about economic gain—it’s also about global reputation and compliance. The UAE is currently on the Financial Action Task Force (FATF) “grey list”, which includes jurisdictions under increased monitoring for financial transparency. While being on this list doesn’t indicate wrongdoing, it signals a need for improved regulatory oversight. Implementing taxes on gambling winnings—or strengthening financial reporting in this area—could be seen as part of the UAE’s effort to align with global anti-money laundering (AML) and financial transparency standards.

In fact, introducing tighter controls and transparent tax mechanisms in sectors like gaming and lotteries may help the UAE’s case for removal from the grey list. Many jurisdictions have been quick to regulate gambling precisely because of its potential to become a channel for illegal financial flows. By implementing a responsible framework—including the possibility of taxing winnings—the UAE could strengthen its compliance posture and continue attracting international investors with the assurance of a transparent and secure gaming ecosystem.

P.S. UAE Playbook are hoping and praying the above taxation on gambling winnings or indeed personal income tax does not become a reality.

Of course, any such measure would need to be weighed carefully to avoid deterring players while addressing international concerns. For now, players can enjoy tax-free winnings, but with the gaming industry expected to add $7 billion to the economy, policy changes in this space are likely to remain a topic of both local and international discussion.