Do you pay tax on gambling winnings in Canada?

The short answer

The Canada Revenue Agency does not tax recreational gambling winnings. If you bet for entertainment, your winnings are not taxable in Canada. This applies to sports betting, casino play, poker, and lottery winnings alike.

The longer answer

The CRA can treat gambling winnings as business income if the activity has the character of a business. The test comes from the case Leblanc v. The Queen and considers factors like: how systematic your betting is, whether you rely on it for income, whether you have specialised skill and knowledge, the volume and frequency of your betting, and whether you pursue it in a business-like manner. Being good and being lucky are not enough. Treating it as a business is.

Deposit and withdrawal reporting

Canadian financial institutions do not report gambling deposits or withdrawals to the CRA in the ordinary course of business. Individual transactions over $10,000 are subject to FINTRAC reporting requirements, but that is anti-money-laundering reporting rather than tax reporting.

Cross-border considerations

Canadian residents who win in Las Vegas or other US jurisdictions face a US 30% withholding tax on certain gambling winnings. That is recoverable via a US tax return filed under the Canada-US tax treaty, subject to netting losses. If you win big in Vegas, keep every W-2G and ticket. See a Canadian cross-border accountant.

Bottom line

The overwhelming majority of Canadian bettors owe zero tax on gambling winnings. If you are running a business-like betting operation with systematic bankroll management, established edge, and multi-year positive expectation, get proper Canadian tax advice. Nothing on this page constitutes legal or tax advice.

Sources

• Leblanc v. The Queen (2006 TCC 680): Canadian tax court decision
• CRA Income Tax Folio S3-F9-C1: Lottery Winnings, Miscellaneous Receipts: Canada Revenue Agency
• US Publication 515 (withholding on gambling winnings): IRS.gov