Finnish Court Rules Professional Bettors Can Deduct Losses From Taxable Income

Supreme Court Reverses Tax Position on Professional Betting

Finland’s Supreme Administrative Court has ruled in favor of Antti Koivula, a professional bettor and Chief Compliance Officer at Hippos ATG, permitting him to deduct betting losses from his taxable income. The decision concludes a legal dispute that lasted more than five years and overturns the position previously maintained by Finnish tax authorities regarding the treatment of gambling costs.

The case centers on Koivula’s 2020 tax year, during which he placed bets totaling approximately €366,000 and recorded winnings of roughly €497,000. This activity resulted in a net profit of around €41,000. Koivula stated that without the ability to deduct his losses, this profit could have led to a tax bill of €166,000, a sum he described as financially unmanageable given his personal circumstances.

Financial Pressure and Legal Battle

Throughout the legal proceedings, Finnish tax authorities argued that stakes placed on unsuccessful bets could not be treated as costs for earning betting income. Koivula contended that his betting activities constituted an income-producing activity, which should allow for standard cost deductions. The dispute forced Koivula to seek external financial support to maintain his livelihood while the case remained unresolved.

“I certainly had to look into where I could get a loan. There was financial pressure,” Koivula said. He emphasized that he is not financially independent and supports three small children, highlighting the personal stakes involved in the legal challenge. Upon receiving the verdict, Koivula shared on LinkedIn: “The tax bear is down! The case concerned my personal income taxation and determined the tax treatment of professional bettors in Finland — both now and going forward.”

Defining Income-Generating Activity

The court’s decision hinged on whether Koivula’s betting qualified as an income-generating activity. The ruling considered the longevity, systematic nature, expert understanding, and economic significance of his betting operations. Koivula has been betting professionally for more than a decade, a factor that contributed to the court’s assessment of his activity as a consistent pursuit rather than casual entertainment.

Joonas Karhu, who provided legal commentary on the case, explained the practical implications of the ruling. “What this means in practice is that stakes from unsuccessful bets can be deducted from taxable betting winnings. Also travel expenses between home and the workplace were deductible,” Karhu said. However, Karhu noted that the Court did not consider the betting activity to constitute business activity under the Business Income Tax Act, distinguishing it from traditional corporate or sole proprietorship structures.

Implications for the Finnish Betting Market

Koivula pointed out that the ruling confirms he fell within the scope of the criteria for an income-generating activity, though it does not specify exactly where the line should be drawn for other individuals. “An income-generating activity does not necessarily have to be one’s main source of income; the overall picture is what counts,” he said. The court noted that there are no defined working hours, stake sizes, or exact income limits required for betting to be considered income-generating.

The decision is expected to serve as a reference point for future tax settlement disputes in the betting industry. This precedent arrives as Finland prepares for significant regulatory changes, with the country’s betting market scheduled to launch in July 2027. The ruling provides a framework for how professional bettors may structure their tax obligations in the coming years, potentially influencing how operators and regulators approach the taxation of gaming activities in the new market environment.