In Canada, the taxation of gambling winnings is a unique subject, often misunderstood by both casual players and professionals. As gambling continues to be a popular form of entertainment for many Canadians, it’s important to understand the tax implications based on the type of gambling activity and whether you’re considered an amateur or a professional gambler. Here’s a detailed breakdown of what you need to know about gambling taxes in Canada as of 2025.
Gambling Taxes in Canada: Quick Overview (2025)
- Amateur Gamblers: If you’re gambling for fun, your winnings are not taxed.
- Professional Gamblers: If gambling is your primary income source, you must report winnings as taxable income.
- U.S. Gambling: While you may not need to pay taxes to the Canadian government on gambling winnings in the U.S., you do need to report these earnings.
- Lottery Winnings: Lottery winnings are tax-free unless you earn interest or other investment income from them.
- Casino Winnings: For most Canadians, casino winnings are tax-free, but professional gamblers must report and pay taxes on their earnings.
Are Gambling Winnings Taxable in Canada in 2025?
The good news for most Canadians is that gambling winnings are generally not taxable. The Canadian Income Tax Act views gambling as a “windfall,” which means that as long as you are not gambling professionally, your winnings are not considered taxable income. This applies to the majority of casual gamblers who participate in games of chance like lotteries, slots, or roulette.
Key Points:
- Amateur gamblers are exempt from paying taxes on gambling winnings.
- Professional gamblers, who treat gambling as a career or a major source of income, must report their winnings as taxable income and may deduct gambling-related losses.
However, just because your winnings are tax-free doesn’t mean you can forget about them entirely. It’s still a good idea to keep a record of your winnings in case you need to report them or provide transparency to the Canada Revenue Agency (CRA).
Do You Pay Tax on Casino Winnings in Canada?
Casino winnings, whether earned at land-based casinos or regulated online platforms, are not taxable for amateur players. This includes winnings from slots, blackjack, and roulette, all of which are games of chance. If your gambling activities are purely recreational, you don’t need to worry about paying taxes on your winnings.
However, things change if you are a professional gambler. If you rely on skill and strategy to consistently make a profit from games like poker or blackjack, you may be considered a professional and subject to taxation on your winnings. This distinction is important since games that combine elements of skill may trigger tax obligations for those seeking to make a living from gambling.
Are Lottery Winnings Taxable in Canada in 2025?
Lottery winnings in Canada are tax-free. Whether you win the Lotto 6/49, a provincial lottery, or any other form of lottery, there are no taxes on the prize itself. This is a significant perk for lottery players, as in many other countries, lottery winnings are taxed heavily.
However, if you decide to invest your lottery winnings (e.g., in stocks, bonds, or savings accounts), the income generated from these investments, such as interest or capital gains, will be subject to regular tax rates. Additionally, if you gift part of your winnings to someone else, that gift could be subject to tax.
Cross-Border Gambling Winnings: U.S. vs Canada Tax Rules
If you’re gambling in the U.S. and win, you’ll be subject to U.S. taxes on your winnings. For Canadian residents, the U.S. automatically taxes gambling winnings over $1,200 at a flat rate of 30%. Even though this amount is withheld by the casino or betting site, you are still required to report these winnings to the Canadian tax authorities.
Canada does not tax gambling winnings from the U.S., but you must report any gambling income from U.S. casinos during tax season. Professional gamblers may also write off gambling losses from their U.S. winnings to offset taxes.
Tax Rules for Professional Gamblers in Canada
A professional gambler in Canada is someone who uses gambling as their primary income source. Here are some factors that may classify someone as a professional gambler:
- Gambling is your main source of income.
- You’ve been consistently earning from gambling for a long time.
- You invest a significant amount of time and effort into practicing and studying gambling techniques.
- You participate in professional gambling tournaments or travel for gambling.
- You depend on gambling profits to support your lifestyle.
For professional gamblers, taxes are not only applicable to gambling winnings but also to any related income (e.g., sponsorships, tournament prizes). Additionally, you can write off certain expenses like travel costs, buy-ins, and gambling-related losses.
Do You Pay Gambling Tax in Ontario? (2025 Update)
Ontario has set up a regulated iGaming market that allows licensed online casinos and gambling platforms to operate within the province. As of 2025:
- Amateur gamblers in Ontario are not taxed on their winnings, whether they are from land-based casinos or regulated online casinos.
- Professional gamblers in Ontario must pay income tax on their gambling earnings, with rates ranging from 15% to 33%, depending on their tax bracket.
These tax regulations apply to casino winnings as well as sports betting profits. However, lottery winnings remain tax-free in Ontario, just as they are in the rest of Canada.
Gambling Tax Laws in Canada by Province (2025 Breakdown)
Tax laws related to gambling vary slightly from province to province. In most provinces, amateur gamblers do not pay taxes on their winnings, but professional gamblers must pay both provincial and federal taxes. The tax rate for professional gamblers depends on the amount of income earned, similar to any other profession.
Here’s a general guideline:
- Amateur gamblers are exempt from paying tax on winnings.
- Professional gamblers must report gambling income and pay taxes on it.
- Taxes on interest earned from gambling winnings are standard.
Final Thoughts on Gambling Taxes in Canada
In Canada, gambling winnings are generally tax-free for most players who gamble for fun, whether from casinos, lottery wins, or sports betting. However, if you’re a professional gambler, you must report your winnings and may be required to pay taxes on them. It’s important to keep detailed records of your gambling activities to ensure compliance with tax laws, and to consult with a tax expert or legal professional if you’re unsure about your situation.
By understanding how gambling taxation works, you can enjoy your gambling experience while staying on the right side of the law.
FAQ
In most cases, casual gamblers in Canada do not pay taxes on gambling winnings. Winnings from casinos, lotteries, and sports betting are generally tax-free unless you’re considered a professional gambler.
No, casino winnings are not taxed for most players in Canada. However, if gambling is your primary source of income, the CRA may treat you as a professional gambler, and your winnings could become taxable.
No, lottery winnings in Canada are not taxed. Whether it’s Lotto Max or scratch cards, Canadians receive full payouts with no tax withheld.
If you rely on gambling for income, spend time analyzing odds, and treat it like a business, the CRA may classify you as a professional gambler — making your earnings taxable.
Yes. If you win money gambling in the U.S., the IRS withholds 30% of your winnings. You may be eligible for a tax credit in Canada through the Foreign Tax Credit.
No, gambling winnings are generally tax-free across all Canadian provinces. However, local regulations may vary slightly for online gambling and operators.
Yes. Online gambling winnings are tax-free for casual players in Canada, whether from local or offshore websites, unless you’re gambling professionally.
If you’re a casual player, no reporting is needed. But if you’re a professional gambler, you must report gambling income on your tax return.
Casual players pay zero tax on gambling winnings in Canada. Professional gamblers may be taxed based on their net income from gambling.
