Gambling Tax in Canada | Tax Rate for Gambling Winnings 2023

Learn about the gambling tax in Canada. Recreational players are not required to pay taxes on their winnings, but…

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Gambling Tax in Canada in a Nutshell

Hitting the jackpot is the dream of every player at an online casino. As exciting as this sounds, you might be wondering if you'll have to give up any part of your prize as taxes.

Well, the good news is that gambling is mostly tax-free in Canada. According to the law, recreational players in Canada are not required to pay taxes on their winnings. So as an average gambler, you can have as much fun as you want without having to worry about taxes.

Keep reading this page to learn more about the gambling tax in Canada or:

Check if online gambling is legal in Canada

Gambling Tax for Specific Groups of Players

Here is a table that shows tax status for both non-professional and professional gamblers:

Form of Gambling	Professional Gamblers	Non-Professional Gamblers
Land-Based Casino	Taxable	Non-Taxable
Online Casino	Taxable	Non-Taxable
Sports Betting	Taxable	Non-Taxable
Bingo	Taxable	Non-Taxable
Lottery	Non-Taxable	Non-Taxable
Horse Racing	Taxable	Non-Taxable
Poker	Taxable	Non-Taxable
Pools/Pari-Mutuel	Taxable	Non-Taxable
Raffles	Non-Taxable	Non-Taxable
Pull-Tabs	Non-Taxable	Non-Taxable
Scratch ‘n Win	Non-Taxable	Non-Taxable
Fantasy Sports	Taxable	Non-Taxable
eSports	Taxable	Non-Taxable

How does it look in detail?

Professional Gamblers

If you’re a full-time player making a living from gambling, you will be required to file taxes. However, spending a lot of time gambling and winning consistently isn’t how the law defines a professional gambler.

According to the law, things that can classify you as a pro player is running a gambling operation or applying skills to your gambling technique to hit consistent wins. This is the reason why most poker and pool players are classified as professionals rather than sports or casino game players.

So generally, if gambling is your only source of income and you're making consistent wins from it, you're more likely to be considered a professional and you will be liable to pay anywhere between 15% to 33% depending on your winnings.

Non-professional Gamblers

Presently, the majority of Canadian players can be classified as recreational gamblers or non-professional gamblers. Recreational players depend heavily on luck to score big. They might win or lose big on games but they never take gambling as their primary source of income.

If you fall into this category of players, the law of Canada exempts you from paying taxes on your winnings regardless of how lucky you get. To be classified as a non-professional gambler, you must not be making a living gambling on casinos or sports games.

Winners in the USA or Las Vegas

For Canadian citizens in the USA or Vegas, you will find that the land of opportunity is not so generous to gamblers.

As a bettor, you will be required to pay almost half of your winnings as taxes on anything above $1200.

There's no negotiating! In fact, 30% of your winnings will be automatically deducted as withholding tax. Fortunately, you don't have to lose that much money on your winnings and you can actually get it back.

Canada and the US have a special tax treaty that includes the IRS taxing Canadians who make gains gambling in America. Basically, this means you can get back the deductions if you’re able to prove gambling losses or expenses. To recoup your money, you will have to apply for a US tax number, fill out the necessary forms, and keep your fingers crossed.

Lottery Winners

As with most casino games, Lottery is strictly based on luck and the Canada Revenue Agency does not tax any lottery winnings from OLG or other lottos. Whether you’re a pro player with any years of experience or a complete newbie, you’re free from lottery gambling tax in Canada.

Online Casinos and Poker Players

Ontario online casinos are a major part of online betting sites. When betting at such platforms, there are chances you could claim a huge amount of Canadian dollars from hitting a progressive jackpot when playing your favourite high RTP slots.

As long as you're a casual bettor, you don't have to worry about taxes on your winnings. Even if you do play regularly, you won't be taxed as long as your winnings are not your primary source of income. This applies to all kinds of casino games including the likes of roulette, blackjack, baccarat, poker and craps.

Sports Betting Winners

Do you have to pay taxes on gambling winnings at online sportsbooks? No, you don’t!

Just like casino players, sports bettors don’t have to declare gambling winnings when they file their taxes. The rule covers all kinds of sports betting markets. Whether you’re up for the moneyline, total, spread bets, or you prefer to risk it all on parlay bets, you don’t have to pay taxes on any lucky hits. The exception is if you're a professional gambler that relies on gambling as your daily income.

Online Racebook Players

There is no doubt that horse racing is a fast-paced game that can turn gamblers into millionaires within minutes. If you’re a huge fan of horse racing, you don't have to part away with your lucky winnings on the horse track.

The fact is, that The Income Tax Act does not require you to report your winnings when you file for taxes though there might be an exception for those without a primary source of income that regularly wins on the tracks.

eSports Players

eSports online betting can be said to be another part of the sports betting section. With its popularity surging in the last few years, bettors might wonder if eSports is an exception to the Income Tax Act. Well, it’s not! The rules still apply to winnings from eSports. Unless it is your main source of income, Canada gambling tax is not your headache.

Is Gambling Taxation Different for Online and Offline Games?

To sum up, The Income Tax Act doesn't differentiate between online and offline gambling so we can conclude that the rules are pretty much the same for both gaming platforms.

As long as you're not a professional gambler, you are not mandated to pay taxes on gambling winnings regardless of whether those winnings were made at an online casino or on the table of a land-based casino or racetrack.

FAQ

: It depends on the type of player you are. If you’re a recreational or non-professional gambler, you don’t have to pay tax on gambling winnings. Professional gamblers, on the other hand, are mandated to pay gambling tax in Canada.
: No, Canadians are not required to pay tax on Casino winnings. This is because the government of Canada doesn’t regard gambling-related activities as a steady source of income.
: The Income Tax Act does not require recreational or non-professional gamblers to pay tax on sports betting winnings as long as it is not your primary source of income and you’re not making a living off it.
: The gambling tax in Ontario is the same as with other provinces in Canada. For non-professional gamblers, you are not subjected to gambling tax in Canada. However, professional gamblers will be required to pay taxes on their winnings.
: Yes. Just like other betting markets, hitting it with spread betting is all about luck. Canadian who win based on luck will not have to pay taxes on their winnings.