Emma Larsson
Facts VerifiedVerified by Head of Content: Alec Martinez
Updated: 13.10.2024In addition to entertainment, gambling for many is also a way to make money. However, since, in theory, any income should be registered and taxed, difficulties arise with understanding the taxation of gambling winnings. We will tell you in what cases you need to pay tax on casino wins and when gambling winnings are not taxable in Canada. Our experts have studied all aspects of the taxation of gamblers in Canada.
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In general, there are no taxes on casino winnings in Canada. However, this rule has exceptions, which we are going to discuss in this section.
According to Paragraph 40(2)(F) of the Income Tax Act, online gambling winnings aren’t taxable in Canada. This tax law applies to all provinces regardless of the type of gambling (casinos, sportsbooks, lottery).
Gambling winnings are taxable in Canada when the winning results in dividends or interest from depositing in the account or investing in stocks. The winnings are also taxable if gambling is your profession (gambling has been your main income for an extended period; you practice regularly and attend tournaments). In this case, the Income Tax Act deems your gambling activity as running a business, and you have to pay an income tax. Pro gamblers can claim gambling losses (entry fee, travel cost, etc.).
As soon as you start to carry out any financial operation with the money you have won, your actions fall under tax legislation. Any additional income from winnings investing must be declared on T3, T5, and T5013 forms and included in your personal income tax. The investment income will be taxed between 15% and 33%, depending on your basic income. Even if you didn’t get a T5 form and your income is less than $50, you declare to avoid hefty tax penalties.
Taxes on gambling winnings in Canada for professional gamblers are both provincial and federal. Pro players must declare earnings as taxable income, though they can deduct losses from the taxable amount.
Crypto gambling winnings tax is collected as an income tax. Crypto winnings are considered income, whose value depends on the CAD value at the time of receipt. When selling the won crypto, you will experience a capital gain or loss (depending on the crypto price changes that have occurred since you received the winning). The rate of the crypto casino winnings tax in Canada varies between 0% and 37%, depending on the tax bracket. It is important to know that if the CRA considers your crypto winning as capital gain or investment activity, only 50% of the win money will be taxed. However, if the CRA treats the winning as a business income, 100% of your profit will be taxable.
Recreational bettors don’t pay taxes on gambling winnings in Ontario. When it comes to professional gambling, players have to pay income tax that ranges from 15% to 33%. This tax applies to online casinos and sports betting but not to the lottery, according to section 87 of the Indian Act.
There are many ways to withdraw non-taxable gambling winnings in Canada. The Rather Dashing Games team usually uses the following withdrawal methods:
No, the lottery is not considered taxed gambling in Canada. According to the Canada Revenue Agency (CRA), winning a lottery is a “windfall” (unexpected payments like inheritances or gifts), and it is not subject to taxation. Lottery winning is also excluded from the taxable income list in the Income Tax Act. However, as soon as the winnings are credited to your bank account and you start to manage them by investing in something, the money becomes taxable according to all the rules.
| Casinos where you don’t pay taxes | 50+ |
| Crypto-friendly casinos | 30+ |
| Sportsbooks | 30+ |
| Popular casinos | JustCasino, Instant Casino, Spin Casino |
| Top online games | Blackjack, Poker, Roulette, Baccarat, live games and slots |
After the Rather Dashing Games experts analyzed gambling taxation in Canada, we can assure you that everything is very simple here. If you are an ordinary amateur, you can safely play casino games and place bets on your favourite sports events without worrying about taxes. However, if you gamble professionally, be prepared to pay taxes in accordance with federal and provincial legislation. If you are planning to wager with digital currency, get familiar with the types of crypto gambling taxes in Canada (business income tax and capital gain).
Verified by Head of Content: Alec Martinez
