Gambling Taxes in Canada: Winnings & Losses

Last update:
9 Sep 2022

Whether you’re just about to place your first bet, or already have a couple of wins in your pocket, you’re going to be wondering about gambling taxes at one point or another.

Some of the questions that may be of interest to you could be:

• Do Canadians have to pay taxes on gambling winnings?
• Are gambling losses tax deductible?
• Are the rules for land-based casinos, online betting, and crypto winnings different?

In this guide, we’ll answer those and several other questions of interest to gambling enthusiasts in Canada.

Is Online Gambling Taxable In Canada?

That’s good news for those who gamble for hobby, but it does raise another question:

Where does Canadian law draw the line between playing for fun and gambling for business purposes?

For all online gambling (except poker, which has different rules we’ll explain below), you just need to answer a simple question:

Are you playing with the intent of making a living out of it, or are you doing it for personal reasons?

If the answer is the latter, then you have nothing to worry about.

If it’s the former, just like with any other income, it is taxable.

For example, In Ontario, if you have an income between $42,201 and $84,404, even if it’s due to professional gambling, you’ll be taxed with a rate of 9.15%.

Taxes on Poker

Because poker is a game of skill as much as it is a game of luck, the rules for treating poker winnings as business income are different.

Besides playing poker for income purposes, other factors that determine whether you’re playing it professionally are:

• your experience in terms of profit and losses in the previous years
• any poker training you might have had
• the capability to gain a profit.

To make it simple:

Are Online Gambling Losses Tax Deductible?

The rules for gambling losses are pretty much the same as they are for gambling winnings.

Just like winnings are only taxable if you’re a professional player, gambling losses can only be tax deductible if you do it professionally.

But even so, proving these losses should be treated as tax deductible is very difficult.

The standards for something being considered “businesslike behaviour” in gambling are very high, making it difficult even for professional gamblers to claim tax returns.

But there is some good news for Canadians who have casino winnings in the U.S. : they are eligible to file US income tax and claim their U.S.-made gambling losses.

However, the total losses deducted cannot be higher than total U.S. winnings, which will be taxed 30% according to the U.S. law (if they are at least $1,200).

How is Crypto Gambling Taxed in Canada?

Crypto gambling is taxed like any other type of gambling in Canada. Unless you’re doing it professionally, it’s tax-free.

Is It the Same in All Provinces?

While provinces differ in terms of tax rates for professional gamblers, the fact that those who are playing for hobby are tax-free applies all across Canada.

Is Land-Based Gambling Taxable in Canada?

Just like online gambling, land-based gambling in Canada is tax-free, so long as you’re not doing it for business income.