Gambling Taxes in Canada: Winnings & Losses in Online Gambling
Whether you’re just about to place your first bet, or already have a couple of wins in your pocket, you’re going to be wondering about gambling taxes at one point or another.
Some of the questions that may be of interest to you could be:
- Do Canadians have to pay taxes on gambling winnings?
- Are gambling losses tax deductible?
- Are the rules for land-based casinos, online betting, and crypto winnings different?
In this guide, we’ll answer those and several other questions of interest to gambling enthusiasts in Canada.
Is Online Gambling Taxable In Canada?
Unless you’re a professional gambler, the profit you make by playing at online sportsbooks or casinos will not be taxable.
That’s good news for those who gamble for hobby, but it does raise another question:
Where does Canadian law draw the line between playing for fun and gambling for business purposes?
For all online gambling (except poker, which has different rules we’ll explain below), you just need to answer a simple question:
Are you playing with the intent of making a living out of it, or are you doing it for personal reasons?
If the answer is the latter, then you have nothing to worry about.
Even if you win a huge jackpot, so long as you’re not a professional gambler, you won’t have to pay taxes on it.
If it’s the former, just like with any other income, it is taxable.
For example, In Ontario, if you have an income between $42,201 and $84,404, even if it’s due to professional gambling, you’ll be taxed with a rate of 9.15%.
Taxes on Poker
Because poker is a game of skill as much as it is a game of luck, the rules for treating poker winnings as business income are different.
Besides playing poker for income purposes, other factors that determine whether you’re playing it professionally are:
- your experience in terms of profit and losses in the previous years
- any poker training you might have had
- the capability to gain a profit.
Are Bet365 Winnings Taxable in Canada?
No, there are no taxes for gambling at bet365 in Canada. Winnings made by amateur gamblers are not taxable in Canada, and bet365 is no exception.
Therefore, so long as you’re betting from Canada, you can bet and win all you want at bet365, and you won’t have to worry about gambling taxes.
The only exception is if you are a professional gambler. In that case, regardless of whether you do your work at bet365 or at another sportsbook, you’ll be taxed according to Canadian law.
To make it simple:
If you’re a trained poker player who was regularly gaining profit (which was your main goal) — your poker winnings will be treated as business income and thus taxed.
To give you some perspective on how lenient Canada’s gambling laws are, let’s see how they compare to other countries’ gambling tax rates.
|France||13.7% for winnings over €1500|
|Germany||5% on all stakes|
5% on all winnings
|Australia||15% on table games|
|USA||24% (usually for over $1200)|
As you can see, UK is the only other major country that doesn’t tax gambling winnings. Germany goes as far as to tax stakes as well!
Are Online Gambling Losses Tax Deductible?
The rules for gambling losses are pretty much the same as they are for gambling winnings.
Just like winnings are only taxable if you’re a professional player, gambling losses can only be tax deductible if you do it professionally.
But even so, proving these losses should be treated as tax deductible is very difficult.
The standards for something being considered businesslike behaviour in gambling are very high, making it difficult even for professional gamblers to claim tax returns.
How is Crypto Gambling Taxed in Canada?
Crypto gambling is taxed like any other type of gambling in Canada. Unless you’re doing it professionally, it’s tax-free.
Is It the Same in All Provinces?
While provinces differ in terms of tax rates for professional gamblers, the fact that those who are playing for hobby are tax-free applies all across Canada.
Is Land-Based Gambling Taxable in Canada?
Just like online gambling, land-based gambling in Canada is tax-free, so long as you’re not doing it for business income.
How to Claim U.S. Casino Winnings in Canada
If you’re from Canada and you made some decent money (at least $1200) gambling across the border, you will fall under the U.S. gambling tax law. This means you will likely have to give up 30% of your casino winnings due to taxes.
Luckily, you can claim your tax refund as well. To do that, follow these steps:
- Complete form W-7 with the IRS to get your U.S. ITIN (Individual Taxpayer Identification Number).
- Once the year ends, file a U.S. non-resident tax return.
This will allow you to lower your initial winnings by the amount of money you lost gambling in the U.S.
However, the total losses deducted cannot be higher than total U.S. winnings.
What happens if a Canadian wins money in Vegas?
When they win $1,200 or more in the U.S., regardless of the intent behind it, Canadians need to pay 30% in taxes. Vegas is no exception!
Can you claim gambling losses on your taxes in Canada?
If gambling is your profession, then you may be able to claim gambling losses. However, proving you spent that money on business endeavours is very difficult when it comes to gambling.
How much money can you win gambling without paying taxes in Canada?
Great news for casual gamblers: so long as you’re not a professional, there are no limits to how much you can win on sportsbooks or casinos in Canada. You won’t be paying taxes whether you win $10 or $1,000,000!
Can you write off gambling losses in Canada?
Unless you’re a professional gambler, the answer is “no”. Just like amateur gambling winnings aren’t taxable in Canada, amateur gamble losses aren’t tax deductible, either.