Taxes and Gambling in Canada Taxes and Gambling in Canada

Although gambling is a common pastime in Canada, few people are aware of what happens when you win the big one. Taxes, which can occasionally sneak up on you, are probably the last thing on your mind while putting a wager on the poker table. 

When is that, though? And are gambling winnings taxed in Canada? We’ll see.

In Canada, Are Gambling Winnings Taxable?

Gambling profits are often assessed on a case-by-case basis because there is no set policy for how to tax them.

The main issue is that gambling gains must be reported as company revenue to be taxed. Otherwise, you may keep everything.

To dispel misconceptions, Canada does not consider your winnings while deciding whether or not to tax you. The Canada Revenue Agency (CRA) instead wants to know if you make a living off of your bets.

Recreational vs. Professional Gambling Taxes

Your gaming habits will determine whether you must pay gambling taxes. However, assessing whether you bet for profit may be difficult, and there are still no clear regulations.

Tax laws may, unfortunately, get stale for any professional gambler. Generally speaking, your income qualifies as income from a company if you directly benefit from the operation of a gaming institution. Since all activities are subject to taxes and laws, your gains (or beatings) will be regarded as business revenue or loss, and the taxpayer is assumed to have been gambling intending to make a profit. 

To put it plainly, the CRA will regard your activity to be motivated by profit if you treat gambling like you would a company. Professional poker, roulette and blackjack players, like the rest of us, pay income taxes on net winnings from skill-based games because those winnings are taxable.

1)    You often participate in competitions.

2)    You are well-organized when engaging in the activity and you travel to play.

3)    You make most of your money from gambling.

4)    Your expertise can help to lessen the element of chance.

5)    For the game, you train or attend lessons.

6)    You’ve had a longer period of steady income generation.

But there is some ambiguity involved as well. Specifically, many elected people feel that gambling is always done for financial gain. Players primarily engage in these activities to win and gain money. But we can’t treat every gambler like a businessman, can we?

Yes, but. And here’s where tax experts may assist you by reviewing your past performance. Despite your best efforts, you could still be a (good) amateur, even if you may believe yourself to be a professional.

However, if you gamble occasionally and for fun, you may retain all of your profits and they are not subject to taxes.

Gambling Taxes, Both Online and Offline

What about the taxes imposed on internet gambling?

It is sufficient to remark that there is little distinction between offline and internet gambling under the Income Tax Act. The casino winnings tax laws, therefore, apply to both, i.e., if you’re a professional, you must record your wins as income, but if you play for enjoyment, you are not required to do so.

Keep in mind that even if you do play regularly, you don’t have to worry about taxes as long as your gains from gambling aren’t your main source of income.

Last Updated: January 9, 2024

Erik Jensen is a seasoned gambling expert that has previous worked at one of the largest igaming companies globally. He has also extensive experience working with online casino campaigns for the biggest companies in the world. In the last 5 years Erik has solely been focusing on the Canadian market to give the best up to date news and best casino bonuses available for the Canadian casino players.

Erik Jensen
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