Gambling tax guide for Canada 2023
Wondering how much tax you’ll pay on gambling winnings? Read our complete guide to learn all about gambling taxes in Canada. We’ll cover taxes payable on casino gambling and sports betting winnings, as well as the lottery winnings tax in Canada. (Written by Ziv Chen)
Casinos where you pay no tax in Canada
Ziv Chen has worked in the online gambling industry for over two decades in various senior management roles before becoming a full-time writer. Combining his passions for gambling, sports, and writing, he is always on the lookout for the next innovative slots and live-dealer games in Canada. When it comes to sports, Ziv is a huge fan of College and Professional American football and Major League Soccer.
How is your gambling taxed in Canada?
The good news is that, in most cases, your winnings aren’t taxable unless you’re a professional gambler. Still, it’s important you understand your tax situation.
What you don't need to pay
As stated in Paragraph 40(2)(F) of the Income Tax Act, Canadians do not have to pay taxes on gambling winnings. This includes earnings from online casino gambling, land-based casino play, online sports betting, and horse race betting. This law extends across all provinces. So regardless of where you play in Canada, you most likely won’t have to pay taxes.
What you will need to pay
However, interest earned on gambling winnings must be declared and taxed. For example, if you win money at a casino and deposit it in a savings account, you will be liable to pay tax on the interest accrued. Or, if you invest your winnings in a stock that pays out dividends, you’ll have to pay tax on these earnings too.
What you need to report
In fact, if you are a resident of Canada, any additional earnings you make from investing your winnings must be declared on your T5 slip, T3 slip, and T5013 form. It must show as part of your investment income, taxable at rates between 15% and 33%, depending on your income level.
You might not receive a T5 form if your investment income is less than $50, but you must report it regardless. Not declaring these earnings can result in prosecution by the tax authorities and heavy fines. These earnings will also need to be shown on your personal income tax, which varies between provinces.
In addition, professional gamblers who earn an income from playing poker or betting on sports must declare gambling winnings as part of their taxable income, which will apply for provincial and federal tax assessments. In this case, all winnings must be included, but losses are deductible from the taxable amount.
Taxes on lottery winnings in Canada
Lottery winnings taxes follow the same regulations applied to gambling winnings, as you don’t have to pay any taxes on direct profits. However, as with casino and sports betting earnings, interest on lottery winnings deposited in a savings account or dividends on earnings investment must be declared as income, subject to provincial and federal tax.
Withdrawing money from a casino in Canada
With Ontario casinos online specifically, sites licensed by the Alcohol and Gaming Commission Ontario (AGCO) will provide payment methods that many Canadians will recognize from day-to-day life, such as Visa, Mastercard, and Interac. Global e-wallets like PayPal, Skrill, and Neteller are also widely accepted.
Many Canadian gambling operators allow you to deposit and withdraw with Interac to cater specifically to Canadian players. You can even use cryptocurrencies in many Canadian provinces, but gambling sites in Ontario do not accept crypto payments.
Deposits with most payment methods will be instant, and there will be no withdrawal fees with the best Canadian online gambling platforms. Most withdrawals will be processed in a few days, with e-wallets and cryptocurrencies traditionally offering the fastest withdrawal times. Depending on your chosen gambling site, some e-wallet and crypto withdrawals are instant.
Canada laws on gambling taxes by province
While there is no direct gambling tax in Canada, professional gamblers and those earning interest on gambling winnings must include their winnings in their income tax. Income tax in Canada varies between provinces. Below, we’ve provided an overview of what taxes you can expect to pay on gambling interest in each province.
Depending on your income, the gambling winnings tax Canada on your interest will range from 5.05% to 13.16% in Ontario. Just like Ontario, Ottawa casino sites, are licensed by the Alcohol and Gaming Commission Ontario (AGCO). For online casinos in Toronto, you may find ON-specific tax information on these sites.
Manitoba has three tax brackets, with the lowest 10.80% on earnings up to $36,842. If you earn between $36,843 and $79,625, you must pay 12.75%. For earnings over $79,625, you pay 17.40% in taxes.
Professional gamblers in Saskatchewan need to pay 10.50% in taxes on their first $49,720 of income. Then, 12.50% from $49,721 to $142,058, and 14.50%.
When you include interest from your gambling winnings in your income tax in Nova Scotia, you pay 8.79% on your first $29,590. There are four further tax brackets depending on how much you earn, with a maximum tax of 21% for earnings over $150,000.
The lowest income tax bracket for gambling winnings interest in New Brunswick is 9.4% on your first $47,715. The highest bracket is 19.5% for anything over $176,756.
Prince Edward Island
In Prince Edward Island, there are only three income tax brackets for gamblers to consider. Any gambling winnings included in your first $31,984 are taxed at 9.8%. The tax is 13.8% for earnings between $31,985 and $63,969 and 16.7% for anything over $63,969.
Newfoundland and Labrador
In Newfoundland and Labrador, the personal income tax rate ranges from 8.7% for your first $41,457 to 21.8% for anything over $1,059,000, with six tax brackets in between.
Our recommended online casinos in Canada
As you don’t need to pay direct tax on gambling winnings in any Canadian province unless you’re a professional gambler, you can select an online casino based on the site’s merits and keep all your profits. Our top recommended casino in December 2023 is Spin Casino, which provides an excellent selection of games, secure payment options, and attentive customer support.
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Features of online casinos in Canada
So now you know that you don’t need to pay taxes on gambling winnings from your online casino, you just need to select a site to get started. But what do the best casinos in Canada offer you? We’ve picked out some key features you’ll see at the best gambling operators in Canada, including at our recommended online casinos.
🎮 Best online casino games
Slots, blackjack, roulette, baccarat, poker
⚖️ Gambling licenses
Alcohol and Gaming Commission Ontario (AGCO), Malta Gaming Authority (MGA), Kahnawake Gaming Commission (KGC)
💵 Withdrawal methods
Visa, Mastercard, Interac, ecoPayz, e-wallets
⚡ Withdrawal speeds
Instant to three days
💲 Withdrawal fees
None - unless using cryptocurrency
🏆 Best online casino
Crypto gambling taxes in Canada
As noted above, cryptocurrencies are available for deposits and withdrawals at casinos across Canada. However, you can’t use these payment methods in Ontario. It doesn’t matter what type of crypto you use, whether it’s Bitcoin, Ethereum, or Bitcash, you won’t have to pay gambling taxes on any winnings withdrawn with these methods.
As with any other gambling winnings, though, if you earn interest on your winnings following your withdrawal or in case you are a professional gambler, you’ll need to pay taxes on your winnings.
While gambling sites don’t charge fees for most withdrawal methods, transactions with cryptos are a little different. Your gambling site may charge a small price to process the withdrawal request. Likewise, your crypto wallet may also charge you a fee for your withdrawal request. Read the terms and conditions of your crypto wallet and gambling site before claiming your payout.
Casino.org offers free advice to help you find the best online casinos and stay informed. However, we recommend speaking to a specialist tax adviser if you have any specific questions relating to gambling tax in Canada.
Canada gambling tax FAQs
Do professional gamblers have to pay income tax in Canada?
Yes, professional gamblers must pay income tax on gambling winnings in Canada. When completing your taxes, you must declare everything you win, but you can also remove any losses.
Is sports betting taxable in Ontario?
For most people, sports betting winnings are tax-free in Ontario. The exception is professional gamblers, who need to declare betting winnings and losses. Also, if you earn any interest from your gambling winnings, this needs to be included in your income tax.
Are lottery winnings taxed in Ontario?
Much like casino gambling and sports betting winnings, lottery winnings are tax-free in Canada. In every province, you can keep every cent of your win. If you earn interest on your winnings, this becomes eligible for provincial income tax.
Are gambling winnings taxable in Ontario?
If you are gambling recreationally in Ontario, your gambling winnings are not taxable. This includes casino gambling, sports betting, and poker. The only exception is professional gamblers, who must pay income tax on gambling winnings.
Are online gambling losses tax deductible in Canada?
Yes, if you are paying taxes on gambling winnings as a professional gambler in Canada, you can deduct your gambling losses. We recommend keeping detailed notes on your gambling profits and losses to make filing your taxes easier.
Are winnings on Bet365 taxable in Canada?
As with all sportsbooks in Canada, winnings from Bet365 are tax-free. You can withdraw your cash at Bet365 as long as your funds are eligible for withdrawal and keep all your winnings. If you earn money gambling professionally, this must be taxed as income.