Gambling Tax in Canada: Are Gambling Winnings Taxable in Canada?

Online gambling is fairly common in Canada. The fact that you’re wondering if online gambling winnings taxable in Canada tells us you take this very seriously. And thoughtful information is what you’ll get in this guide.

We plan on covering what a Canadian citizen can expect to pay in taxes in 2023 based on their playing frequency. Protecting your interests by complying with the laws when enjoying casino games or betting on sports is necessary.

Table of Content

⚖️ Overview of Canadian Gambling Laws

The gambling laws in Canada are just as elaborate as the country’s sheer size. According to Canada’s Federal Criminal Code section 207, all forms of gambling are prohibited. Then why is online gambling so popular in the country? The same code also makes an exception for provincial governments. They can “conduct and manage” gambling within the province borders. Most provinces have dedicated regulatory bodies for the gambling industry overseeing local providers. It’s the British Columbia Lottery Corporation (BCLB) for British Columbia. For Quebec, it’s Loto-Quebec.

The Kahnawake Gaming Commission is the largest independent regulatory body in the country. As expected, it’s located in the Mohawk Territory in Quebec. The Canadian government may not recognize it as a valid licensing body, but KGC has been in operation since 1996! If you find an online reputable casino Kahnawake brand, you’re free to sign up and play.

All brick-and-mortar and online casinos in a province must be “registered” by the appropriate authority. Offshore operators, however, have no restrictions on accepting Canadian gamblers. In case you’re not aware, an “offshore” operator is a gambling company that does not operate in Canada. Hence, Canadian laws don’t have any jurisdiction over these operators. Let’s look deeper into the taxes on gambling winnings Canada.

🍁 Taxation of Gambling Winnings in Canada

Now that you know Canadian gambling laws well, let’s revert to our primary discussion. There is no direct answer to the question, “Are gambling winnings taxable in Canada?” or “Are casino winnings taxable in Canada?” It’s a very open-ended question with lots of variables in play.

Recreational vs Professional GamblingThe first denominator of whether your winnings would be taxed or not comes down to the intent. If you’re just having fun at a casino, the winnings you generate are not going to be taxed. If you take gambling as your livelihood, as you expect profits in the long run, the winnings will be classified as taxable business income.
Type of Gambling ActivityNot all forms of winnings are taxable. “Game of luck” and “game of skill” concepts are in play. For example, there is no tax on lottery winnings in Canada. The same goes for online slots and winnings from Roulette, jackpot winnings, etc. They are not taxable. On the other hand, playing skill-based games like Poker, Blackjack or being a professional gambler (someone who can consistently beat the odds) are taxable income sources.
Location of GamblingAs long as you’re within borders, you must report all of your winnings. Whether the Canadian tax law dictates collection or not comes into play later. But if you go out of the country, in the US, for example, you don’t have to report or pay gambling taxes Canada when you return.

💲 Determining and Reporting Gambling Income

We’ve been saying since the beginning that you need to keep proper track of all of your windfall winnings. You must have proof of your taxable income streams. It may not seem like a problem until it becomes a problem. The Canadian Revenue Agency (CRA) will come knocking on your door if your documents are not in order.

The best way to avoid any kind of complication is to keep track and report right now. The question is, how do you determine your gambling income tax? And are gambling winnings taxable in Canada? An “income” is “money received, especially on a regular basis, for work or through investments”. The same definition applies in Canada.

You need to ask yourself: Are you receiving money from gambling on a regular basis? Are you investing the winnings into properties or earning interest? Are the winnings from gambling your only source of income? If the answers are yes to these questions, you must pay your tax as a business. The good thing is that you can also get the tax benefits that businesses get.

As for the reporting process, you’ll need to save all the receipts and other documents that prove your transactions. Thankfully, the tracking winnings casino process is almost automated.

You can always use a bank statement if you’re using banking channels for deposits and withdrawals. Or, you can reach out to the casino you’re playing at and ask them to provide you with a copy of all transactions for the tax on casino winnings.

At the end of the day, you won’t be able to calculate your exact “income” and file for your tax. Every case is different, and there are too many variables in play. We recommend hiring a tax attorney if you play at the best Canadian online casino sites regularly. A professional will be able to keep track of your activities as well as guide you on the next steps.

💸 Deducting Gambling Losses

Is gambling income taxable in Canada? Is gambling losses tax deductible in Canada? The answer to both questions is it depends. Even recreational gamblers try to sign up as professionals to write off their losses as tax deductibles. But that’s not how it works. You can only get deductibles if you pay the tax in the first place.

A good subject, for example, would be a professional poker player. Poker has some of the most high-voltage tournaments. Some examples include:

  • World Poker Tour
  • World Series of Poker
  • Asia Pacific Poker Tour
  • European Poker Tour

When a player attends these poker tournaments, there are expenses like tournament fees, flight tickets, accommodation, etc. If the player is listed as a professional gambler and comes within the tax brackets, they can get tax deductibles.

⚡ Conclusion

So, is gambling taxable in Canada? Most players never consider taxes on gambling winnings in Canada since they play for recreation. As a result, almost all winnings they generate are windfalls. Professional gamblers must be aware of Canadian tax law to avoid hassles with the CRA.

The motivation behind our guide today is to keep both groups safe. You may not need to pay tax on gambling winnings Canada, but you must report them to avoid friction with law enforcement.

You now know how to determine whether you must pay your tax. You also know how to report your winnings. You should follow the proper procedure every time you participate in any kind of gambling activity in Canada.


1️⃣ What is the current tax rate for gambling winnings in Canada?

The tax rate for winnings varies from province to province and what income bracket it belongs to. Generally, the 4 brackets impose 15%, 20.5%, 26%, and 33% tax rates on income based on gambling tax Canada laws.

2️⃣ Are all types of gambling winnings taxable in Canada?

No, all types of gambling winnings are not taxable in Canada. Activities like lotteries, slots, and roulette are considered windfalls. There is no tax even if you win a big amount from these games. Games of skill like poker and blackjack may impose taxes on casino winnings based on the circumstances explained in our guide.

3️⃣ Do I have to report my gambling winnings to Canada Revenue Agency (CRA)?

Yes, you have to report your gambling winnings to Canada Revenue Agency (CRA). It doesn’t matter whether your winnings will be taxed or not. It’s mandatory for all citizens to report all forms of income.

🖋️ Author

Amy Millar
Article by Amy Millar
Amy Millar is a highly accomplished writer and recognized gambling expert. With years of experience in the gambling industry, she has solidified her position as a respected authority in the gambling community. Amy is the primary expert and content creator at TerraCasinoCa. Her goal is to provide accurate information about online casinos and helpful tips for casino enthusiasts.
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