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When it comes to online gambling in Canada, one of the first questions that come to the minds of most punters is, “are my winnings taxable?”

Let’s look at how sports betting taxes in Canada work and whether or not you’ll have to pay taxes on your hard-earned winnings.

Is it mandatory to pay taxes on sports betting winnings in Canada?

In most cases, no. The idea that recreational gambling should be non-taxable is an age-old British concept. It’s a constitutional belief that casual betting on luck-based games should not be taxed, and the winnings should go solely to the punter.

This is not the case in all scenarios, though. In Canada, sports betting taxes come under two different categories – one is taxable, the other isn’t.

Pro bettors

For professional gamblers in Canada, betting winnings are taxable. The thing is, it can be difficult to define exactly what a ‘professional gambler’ is.

Essentially, suppose your betting winnings are your primary source of income or running your betting operation as a form of business. In that case, your winnings might well be considered taxable to Canadian tax laws.

Casual players

Those who gamble for fun – recreational gamblers – don’t pay any income tax on their betting winnings. This applies to the vast majority of gamblers in Canada. So, as long as you’re not deemed a ‘professional gambler’ by the Canadian Revenue Agency, you don’t have to pay any tax on your winnings.

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Are profits from on-line gambling taxable in Canada?

In most circumstances, money earned from betting winnings in Canada is exempt from paying taxes, in line with the Canadian Income Tax Act. This applies to online gambling, like gambling in casinos or betting shops. So, most punters do not have to declare their gambling winnings when filing their taxes.

As explained above, there are certain cases where gamblers have to declare their winnings. The Canada Revenue Agency audits and assesses gamblers who could be said to be ‘full time gamblers’ – those whose primary income comes from betting.

Should I pay taxes on lottery winnings?

No. Canadian lottery winnings are not subject to tax.

However, money generated from lottery winnings, such as interest, is subject to tax. Also, capital gain tax applies – so, buying a house with lottery money, for instance, then selling it would mean that the profits would be taxed.

Sports betting, Gambling & income tax in Canada

One of the big benefits of sports betting in Canada is that the winnings aren’t taxable for the vast majority of punters.

Casual sports fans who make bets on their favourite sports don’t have to declare their winnings. The only case where you’d even have to think about income tax is if your winnings could be considered ‘income.’ Certain professional gamblers, who make a living out of their sports bet winnings, will have to pay income tax.

Whether a punter is deemed a ‘professional gambler’ and how much income tax they have to pay is decided by the Canada Revenue Agency.

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Federal and Regional laws in Canada

While different cities and provinces have separate regulations when it comes to the legal status of online bookmakers and casinos, the same tax laws apply across all Canadian cities and provinces.

This means that recreational gambling is tax-free throughout the whole of Canada.

Canadian citizens and U.S. earnings.

Unfortunately, after a certain amount, yes.

In the U.S., gambling winnings of $,1,200 or more are subject to 30% income tax. This amount is automatically deducted on payout of earnings.

This is a flip side, however. As a Canadian citizen gambling in the U.S., you are eligible for a tax return on any losses. So keep your receipts when gambling in the States!

Canadian gamblers & their winnings from casinos in the rest of the world…

It depends on the country you are gambling in. Many countries have a similar system to the sports betting taxes in Canada. So, as long as you’re gambling recreationally, you won’t have to pay any tax on winnings.

Tax-free gambling applies in countries including the U.K., Ireland, Australia, New Zealand, Belgium, Denmark, Sweden, and Italy.

Certain taxes on winnings may apply if you’re gambling in casinos in other countries around the world. It’s also worth checking local laws or getting local legal advice if you’re unsure.

The above is advice only. Please contact a lawyer who specializes in the sports gaming industry for in-depth legal information.

Other betting guide

We have written and developed other sports betting strategies easy to apply to achieve higher profits.

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