Gambling tax in Canada 2025 – Are casino winnings taxable?

Taxes on gambling winnings in Canada – Summary

Here’s a quick overview of gambling tax in Canada and where you stand as a player:

• Gamblers playing for fun pay no tax on their winnings
• Professional gamblers playing for profit must report their winnings as taxable income
• You must report gambling winnings earned in the USA on your taxes, although the winnings remain tax-free
• Lottery winnings are not taxed for anyone, except when you earn interest off the winnings
• Casino winnings are tax-free for Canadians, so it’s worth checking out our top recommended casinos

Gambling taxation in Canada

Are gambling winnings taxable in Canada? No, they are not! For the vast majority of Canadians, who gamble just for fun, your winnings are tax-free.

The Canadian Income Tax Act views gambling winnings as a “windfall,” or purely luck-based, and therefore exempts gambling winnings (see paragraph 40(2)(f)(ii)). You should still report winnings on your T3, T5, and T5013 tax forms for accountability.

These rules apply to amateur gamblers in Canada, but professional gamblers have to pay taxes. You’re a professional if you anticipate a profit, either from foreknowledge or raw skill. Professional gamblers report their winnings as taxable income, though they can write-off their gambling losses in Canada.

You also need to pay tax on interest gained from gambling winnings. If you stash your winnings in a saving account or invest in dividend-paying stocks, any profit must be declared and is taxable at normal rates.

• Amateur gambling winnings are tax-exempt
• You should still report winnings during tax season
• Professional gamblers report winnings as taxable income
• Interest or dividends from invested winnings are taxed

Are casino winnings taxable?

Casinos remain one of the most popular ways for Canadians to gamble. But do you have to pay taxes on your winnings?

Casino winnings are non-taxable in Canada for amateur gamblers, although it’s always important to track your winnings and note them on your taxes. These rules apply to land-based casinos, First Nations casinos, regulated local online casinos, and offshore online casinos you can play at from Canada.

The rule remains that “windfalls” from games of chance are tax-free winnings, although that definition sometimes gets hazy in casinos. Games like slots or roulette are pure chance, but games like blackjack or poker have elements of skill. If you are anticipating a profit based on high skill levels, you may qualify as a professional gambler and be required to pay taxes.

Are lottery winnings taxed in Canada?

Lottery winnings are entirely luck-based and count as windfalls, and as such, are tax-free in Canada. In particular, Paragraph 40(2)(f) of the Income Tax Act explicitly excludes lottery winnings as taxable income, so there are absolutely no cases where your jackpot could be taxed. This is true whether you win a national lottery like Lotto 6/49 or a provincial lottery like Lottario.

The only time you may be taxed is on invested lottery winnings. You must pay tax on investment income or capital gains if you put your winnings in a savings account or pour them into a business. Similarly, if you gift a part of your winnings to family or friends, expect to lose a chunk to taxes. Explore a Tax-Free Savings Account (TFSA) to sidestep some of these issues.

These rules only apply in Canada—if you were to visit the USA and win a lottery, you would have to pay the US government taxes on your winnings.

Do Canadians pay tax when gambling from the USA?

Should you participate in gambling of any kind while visiting the USA, you won’t need to pay taxes to the Canadian government, even though you will have to declare it during tax season. This applies so long as you maintain residential ties in Canada, meaning emigrants won’t benefit from this tax break. Note that the USA will tax your winnings according to local state laws.

The rule for US gambling taxes is that you pay 30% tax on any winnings over $1,200.00. This amount will be automatically deducted when you cash out at a casino, so you must pay it.

Professional gamblers can still write-off gambling losses when playing in the USA to help counteract these taxes.

What is a professional gambler?

If you use gambling as your primary source of income, treating gambling as a full-time job solely for profit, you are considered a professional gambler.

Professional gamblers need to file their gambling winnings with the Canada Revenue Agency as income and then pay income tax on those winnings. Fortunately, like other professionals, you can write-off some expenses. Tournament and travel costs can be expensed, as can gambling losses in certain circumstances.

The best way to determine if you qualify as a professional gambler is to seek legal advice from a tax expert. But here are a few qualifications that can indicate someone is a professional gambler:

• Gambling is your main source of income
• You've been earning money for an extended period
• You practise regularly and have specialist gambling knowledge
• You often attend tournaments and travel to gamble
• You intend to rely on gambling profits for your livelihood

An important distinction is that Canada does not tax amateur gambling winnings because they qualify as a “windfall” or a stroke of luck. If you organize your gambling to maximize profit, your winnings are no longer simple luck but will qualify as professional income. However, this means lottery winnings, in particular, are tax-free for everyone since there is no element of skill involved.

Taxes on gambling winnings in Ontario

Ontario iGaming has created the first regulated market in Canada to allow Ontario online casinos, with a host of new rules that only apply in Ontario. The question is, are casino winnings taxable in Ontario?

In short, no. Amateur gamblers in Ontario still don’t have to pay taxes on casino winnings, whether from land-based or regulated online casinos. This is also true for lottery winnings and sports betting!

Professional gamblers must pay income tax on their Ontario gambling winnings, where the tax rate will vary between 15% and 33% depending on which tax bracket applies. Pros also pay taxes on sports betting profits, but not on lottery winnings.

Gambling tax laws by province in Canada 2025

Each province or territory in Canada sets its own provincial tax rate. For professionals, or for interest earned on your gambling winnings, you’ll be expected to pay provincial as well as federal tax.

Gambling tax legislation

All parts of Canada manage their own local gambling laws, though they are all subject to federal legislation as well.

The two most relevant pieces of legislation are the “Criminal Law Amendment Act, 1968-69” and the “Safe and Regulated Sports Betting Act.” These two federal acts made lotteries and sports betting, respectively, legal in all of Canada. They pair with the ”Income Tax Act” to dictate who pays tax on gambling winnings within the country.

Aside from these acts, here are some of the most important pieces of legislation across the country related to gambling taxes.