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A common question asked by Canadian gamblers is whether they must pay taxes on casino winnings. Luckily, Canadian laws are in their favour, but there are exceptions. Discover when and why gambling winnings are taxed, along with how you can bank your prizes, tax-free.
The short answer is no! As a Canadian, you don’t have to worry about paying taxes on your casino winnings. Under Canadian tax law (specifically, paragraph 40(2)(f)(ii) of the Income Tax Act), winnings from bets or prizes aren’t generally considered taxable income.
However, there are some exceptions. If you gain money through interest or dividends (like from depositing into a savings account or investing in dividend-paying stocks) from gambling winnings you will have to pay income tax on it. This also happens if you are skilled enough to be a professional gambler. You can declare this additional earning via the T3, T5, and T5013 forms, and, depending on your income, you’ll be taxed between 15%-33%.
We recommend speaking to a personal tax advisor if you’re worried about the different legislations in your province.
Professional gamblers in poker and sports betting must declare these earnings as taxable income but can deduct losses from the taxable amount. They are subject to both provincial and federal taxes.
What qualifies you as a professional gambler? Well, if you gamble full-time (online or offline) and make a living from it or are motivated by profit, you're considered a professional and will be required to file taxes.
Other factors that indicate you're a professional gambler are:
Professional poker players, blackjack players or any other professional gambler are viewed as operating their own business and this form of income is taxable in Canada. However, pro gamblers are able to deduct loses from that taxable amount (subject to provincial and federal laws).
No, you don't have to pay tax on most lottery winnings from the likes of Lotto Max or 649 as these are defined as “windfall” or “luck-based” winnings. This also applies to most winnings sponsored by charitable lotteries or sweepstakes. The CRA does not tax lottery winnings as the “luck” factor indicates that there was no prior expectation of profiting. However, any income generated on your winnings via a non-registered investment or account is subject to taxation. Examples include:
If you're lucky enough to land a windfall and want to invest, there are tax-free saving accounts (TFSA) which we recommend looking into further.
If you ever find yourself in the extremely lucky situation of winning the lottery, you might wonder if any of your winnings will get taxed. Well, guess what? They’re not!
Defined by the Canada Revenue Agency (CRA) as ‘windfalls’ (unexpected payments that also include gifts or inheritances), which are not subject to tax. This is also stated in the often overlooked, yet significant clause in the Income Tax Act, Paragraph 40(2)(f), which explicitly excludes lottery winnings from taxable income.
However, it's important to maintain fiscal vigilance post-win. When your lottery gains enter your financial portfolio, the normal tax obligations come into force. Subsequent interest or capital gains earned from investing your winnings are subject to standard taxation rules. Similarly, if you consider transferring part of your new-found wealth to family or friends, be aware of potential donation tax implications for the recipient.
If you're a Canadian citizen legally working in the USA, you can deduct any gambling losses which happened over in the states and receive a relative tax refund. Unfortunately for US citizens, they must pay almost half of any gambling winnings as tax.
If you want to gamble in America as a Canadian citizen, you may need a non-immigrant visa to enter the United States, as well as a valid passport. If you then get lucky and make some big winnings in an American casino, you'll have to pay taxes on anything over $1,200 USD. Not declaring it isn’t an option as when you cash out, 30% is automatically deducted.
Now for some more bad news for American gamblers, if they go up to Canada to gamble, they will still have to pay the normal amount of tax that they would back in their home country.
While most casual gamers in Canada won’t be taxed on their winnings, professional players and those who profit from gambling investments will. This tax isn't a perfect fit across Canada; it differs by province. But don’t worry! To make things easier for you, we've created a snapshot of potential taxation on gambling interest in different provinces to help you find the minimum and maximum tax rates:
Scroll right to view more of table items.
| Province | Tax rate on interest from gambling winnings |
|---|---|
| Ontario | 5.05% under $51,446 – 13.16% over $220,000 |
| Québec | 14% under $51,780 - 25.75% over $126,000 |
| British Columbia | 5.06% under $47,937 - 20.5% over $252,752 |
| Alberta | 10% under $148,269 - 15% over $355,845 |
| Manitoba | 10.8% under $47,000 - 17.4%, over $100,000 |
| Saskatchewan | 10.5% under $52,057 - 14.5% over $148,734 |
| Nova Scotia | 8.79% under $29,590 - 21% over $150,000 |
| New Brunswick | 9.4% under $49,958 - 19.5% over $185,064 |
| Prince Edward Island | 9.65% under $32,656 - 18.75% over $140,000 |
| Newfoundland and Labrador | 8.7% under $43,198 - 21.8% over $1,103,478 |
For more information on withdrawal processes and the fastest-withdrawal operators, check out our updated list of online casinos with fast payout times.
The top online casinos in Canada will offer a variety of ways to cash out. The best ones for Canadian players that offer safe and reliable payouts are:
| Withdrawal Options | Types of Methods | Benefits |
|---|---|---|
| e-wallets | MuchBetter and Instadebit | Fast and secure, with instant payouts. |
| Credit or debit cards | Visa and Mastercard | Convenient, reliable, and one of the easiest options especially for new players. |
| Bank transfers | Wire transfer and Google Pay | Takes the longest but are very reliable and has a wide selection of options. |
| Cryptocurrency | Bitcoin Ethereum and Litecoin | Becoming more popular, as they are quick, and often have the lowest minimum withdrawals. |
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Though we do have gambling expertise, the Casino.ca team isn't comprised of lawyers. We recommend consulting reputable tax resources or a consultant for further guidance and keeping up to date with ever-changing laws.
Gambling & taxation - Enjoy tax-free winnings if you're a gambler in Canada.
Tax-exemption status - Read up on Canadian gambling and the tax-exemption status.
Canada Revenue Agency - If you're a pro player, be sure to brush up on Canada's income tax laws.
As stated at the top of this page, gambling winnings are not taxable in Canada unless the player is deemed professional, or the player is earning income on the winnings. This applies to both online gambling and offline gambling.
Only players deemed professional gamblers can write off gambling losses and claim business expenses such as travel and entry costs. Recreational players don't get tax deductions on losses.
Writing off your gambling losses in Canada can be extremely difficult, as this is possible only if you are recognised to be a “professional gambler” - and the standard for businesslike behaviour in this context is very high. If you think you may meet the requirements, we advise you to contact a tax lawyer and have a professional guide you through the process.
If you are a Canadian citizen that does well in a Vegas casino, you'll unfortunately have to pay taxes on anything over $1,200 USD. It’s easy to declare as when you cash out, 30% is automatically deducted.
It’s completely legal to gamble in Canada as long as you aren’t cheating and are of legal age (18 for Quebec, Alberta and Manitoba - 19 for every other province). The Criminal Code of Canada lays down the law for perceived illegal gambling offences. The more serious gambling-related offences carry prison terms of around two years for a first offence, while lesser crimes, like underage gambling can carry prison terms of around six months, along with fines going up to $5,000.
It depends. You won't have to pay taxes on gambling winnings, including high payouts, in Canada unless you're a professional gambler. Read more about how this is defined by scrolling up this page.
