Your Complete Guide to Gambling & Tax in Canada
If you love winning money gambling, Canada is a great place to live. That's
because the vast majority of Canadian gamblers will never pay a cent in
tax on their winnings.
The concept of not taxing gambling winnings is older than Canada itself. It
started in England and says that unless you make a living exclusively from
gambling, or treat gambling as a business, you should not pay taxes. That's
prizes from bets on things like lotteries, casino games, sports, betting,
racing, poker, and all other luck-based games and contests are rarely
Do I have to pay tax on my casino winnings?
It depends but probably no.
Unless you're a professional gambler, as defined by paragraph 40(2)(f) of the Income
Act, you don't have to declare gambling winnings when you file your taxes. The
government looks at a few key factors to determine whether someone is making a
from gambling and should therefore pay taxes on their winnings.
It's also important to remember that gambling tax laws are different to the Criminal
Code laws that regulate gambling in Canada as a whole.
Just spending a lot of time gambling
and even being a consistent winner is not enough to make you a professional in the eyes of the law.
Some of the things that CAN classify you as a pro, however, include
run your gambling
operation like a business and/or you use a systematic application of
or expertise to consistently make a profit.
The skill piece is why poker and pool players are more frequently
as professionals compared to people who bet on sports or casino
Another important point is whether the gambling is your only source
income. You're way more likely to be classified as a professional if
don't have another job or career.
Non-professional gamblers never have to pay taxes on winnings, regardless of
how much they play or how much they win.
Non-pros run the
recreational bettors to compulsive gamblers but as long as they're
making a living doing it, none of them have to pay taxes on gambling
winnings. It's important to realize that you also cannot deduct
losses from your income unless you're a professional.
The truth is, in Canada the law is reluctant to classify people as
professionals unless it's a really clear-cut case so most of the
aren't paying taxes on their winnings. Check
out this guide for more
Non-professional gamblers in Canada don't have to pay taxes on winnings from any
popular gambling games including but not limited to:
The question of paying taxes on
gambling winnings isn't about how much you
win. Lottery winners in Canada regularly take down tens of millions of
dollars and never pay a cent in tax. The question is actually about whether
you're a professional gambler making a living from your gambling
How does gambling work with income tax?
Like we explained before, if you don't make a living gambling and are therefore not
“professional gambler” in the eyes of the Canadian Revenue Agency, you pay
zero income tax on your gambling winnings regardless of what kind of game or contest
If CRA does deem you to be a professional gambler, your winnings are considered to
your income and will be taxed according to the same rules as other regular jobs. One
upside is that if you run your gambling operation like a business, you can also
losses and expenses from your income just like other people who are self-employed or
their own businesses. Income tax brackets are based on your net income so make sure
keep meticulous records and use all the deductions allowed.
Here are the basic income tax brackets that apply to everyone in Canada, including
|Income Tax %
Remember, income tax in Canada only applies to professional gamblers. If you're
recreational bettor with another job or career, you pay zero income tax on your
Is taxation different for online and offline gambling?
The Income Tax Act doesn't make a big distinction between online and offline
and it's safe to apply the same rules to both. If you're not a professional you
have to pay taxes on gambling prizes regardless of whether it's online or in a real
casino or racetrack, for example.
One category of online gambling that is more commonly classified as a professional
activity is online poker. That's because the skill component of poker is generally
accepted to be significant which makes it more common for people to make a living
playing poker compared to other forms of gambling.
Do the rules differ by region, city or province?
Different provinces have different gambling laws that control things like
online gambling but when it comes to paying tax on winnings, the same rules
matter where you live in Canada.
The big question is always whether you're making bets in a professional
capacity. If you
have no other job, you're using a skill to win consistently and you do it
of years in a row, chances are you're a professional gambler and should pay
What happens if I gamble in a different country?
If you're a Canadian
gambling in the United States it's really important to understand
the rules around taxes. That's because when you win, you may be subject to a 30%
withholding tax on your winnings.
Canada and the US have a special tax treaty that includes the IRS taxing Canadians
win money gambling in America. The good news is that you
can get it back if you're able
to prove gambling losses or expenses. The bigger the losses you can prove, the more
your money you'll get back. First you have to apply for a US tax number and then
complete the necessary forms to recoup your money.
This guide is designed to help you research tax guidelines involving gambling in
Canada and does not constitute legal or financial advice. We have presented the guidelines
to the best of our understanding and it is not guaranteed to be accurate in your
jurisdiction. Please seek professional advice about your specific case before making