When you play casino games or bet on different sports, you may not think to ask – are gambling winnings taxable in Canada? However, it’s only sensible to know how much of your potential payout you could owe to the taxman.

This guide shows that casual gamblers don’t have to pay tax on casino games, sports betting, or lottery prizes. Professionals, on the other hand, pay between 5 and 14 percent tax, depending on the province and how much they would have won. Each situation is unique, so let’s explore Canada gambling tax law in-depth.

How is Gambling Taxed in Canada?

According to Paragraph 40(2)(f) of the Income Tax Act, gambling winnings aren’t subject to taxation. Tax is only paid on regular income from someone’s organised effort, pursuit, or activity. So, whether you play at online or land-based casinos, bet on sports, or play the lottery recreationally, you won’t have to pay a penny to the Canada Revenue Agency if you win.

However, if you get a windfall and decide to invest some of the money, that extra income is taxable. You must legally declare these earnings on T3, T5, or T5013 forms, and pay between 15 and 33 percent in tax. Here, we advise you to seek legal counsel, as each province has different legislation. If you’re a professional gambler, your winnings are regarded as income, and you may have to pay tax.

Canada Gambling Tax Laws by Province in 2024

The Canadian gambling industry is overseen by provincial governments. Of the ten provinces, seven allow some form of gambling.

At 25 establishments, Ontario boasts the greatest number of licensed casinos. And while Canada doesn’t require taxes on gambling payouts if you play for fun, your interest on winnings is taxed as outlined in the table below. Professional gamblers also pay similar taxes on their income.

Province	Tax on gambling
Alberta	Up to 10% on the first $142,292. Up to 15% above $341,502 in Calgary and parts of Alberta.
British Columbia	Seven tax brackets between 5.06% – 20.50%
Manitoba	Three tax brackets between 10.80% – 17.4%
New Brunswick	9.4% – 19.5%, depending on amount
Newfoundland and Labrador	8.7% – 21.8%, depending on amount
Nova Scotia	8.79% – 21%, depending on amount
Ontario	5.05% – 13.16%, depending on amount
Prince Edward Island	Three tax brackets between 9.8% -16.7%
Quebec	14% on the first $49,275.
Saskatchewan	10.50% on the first $49,720.

Do Professional Players Pay Tax?

We mentioned that the Canadian government only taxes income, so are gambling winnings taxable in Canada if you’re a professional player? Yes, professional players must pay gambling winnings tax in Canada, and they can also deduct losses from their taxable amount. However, the criteria for defining professional players aren’t clear-cut.

You qualify as a pro gambler when:

By and large, whether or not you pay tax on gambling winnings in Canada depends on whether the payout can be considered a windfall or income. With income, you must have a realistic expectation that you’ll get a return based on your skill and strategy. Any unexpected or unpredictable winnings aren’t taxable.

Are Casino Winnings Taxable in Canada?

Along with the factors we’ve, the types of games you play determine whether you can be considered a professional gambler or not. Lottery games, games of chance, and roulette are largely regarded as windfalls and are tax-free in Canada. Skill-based games like poker and blackjack, on the other hand, can be classified as income or windfalls, depending on the player and circumstances.

Sports Betting

The province recently legalised sportsbooks, but does that mean taxes on gambling winnings in Ontario are now required? Not really, since bettors can’t influence sports outcomes. However, some bettors may consistently beat the spread and may be taxed based on their skill and expectation to make a profit.

Tracking Your Betting Outcomes

We asked – are gambling winnings taxable in Canada, and determined that the answer depends on various factors. So, if you’ve been on a winning streak and are now concerned about the tax implications, it’s vital to keep your gambling records. That should ensure you can prove you got lucky a few times and have losses just like recreational players.

Is Gambling Taxable in Canada if You’re Abroad?

Some Canadian players may gamble recreationally while in the United States or other countries. In such cases, the Canada Revenue Agency and Canadian tax law states that you don’t have to report payouts from when you were out of the country. Each situation is unique, though, so you may need to consult a legal professional.

Is Lottery Taxed in Canada?

No, you don’t have to pay online gambling taxes in Canada for lottery winnings in Canada. That’s because these are regarded as windfalls, where there’s no definite expectation for profit. However, as with other forms of gambling, any interest you earn from your winnings is subject to tax at a rate determined by the amount and your location.

Conclusion – Are Gambling Winnings Taxable in Canada?

Whether you’re feeling lucky or have recently won a substantial amount, it’s only natural to wonder – are gambling winnings taxable in Canada? Professional gamblers must pay taxes and can deduct losses from their taxable income.

Recreational players are exempt from gambling taxes. You must pay tax on any interest earned on your gambling payout, though. Whether you’re a pro or recreational player is determined by factors like how often you gamble, if you use skill to skew the odds in your favour and the types of games you play.

FAQ

Is sports betting taxable in Canada?

Sports betting winnings are almost always exempted from tax in Canada. That’s because most bettors don’t use skill and can’t influence game outcomes. Bettors who consistently beat the spread qualify as professionals and may, therefore, need to pay taxes. The same applies to the question, is lottery taxed in Canada? This is a hard no since players don’t ordinarily play lottery games with a solid plan to earn a profit. 

Are online gambling winnings taxable in Canada? 

Online gambling winnings aren’t taxed in Canada if you’re a recreational player. That means you don’t have skills or strategies that guarantee you win more than you lose. Professionals who consistently win poker tournaments, for example, are required to pay tax on their income. All players must pay tax on any interest they earn on their income.

Are gambling losses in Canada tax deductible?

It’s not enough to ask—are casino winnings taxable in Canada? If you’ve suffered a major loss, you’d want to know if you can write a bit of it off your tax obligation. As is the case with gambling winnings, recreational players can’t deduct losses on their taxes but pros can’t.  

Are lottery winnings taxed in Canada?

Since there aren’t any professional lottery players, lottery winnings are exempted from tax in Canada. Interest on your winnings, however, is taxed at a rate dependent on your province.