Are Casino Winnings Taxed in Canada? CRA Rules Explained

The short answer

For casual recreational Canadian players, casino, lottery, sports-betting and poker winnings are not taxable. The Canada Revenue Agency’s long-standing position is that gambling is not a “source of income” under the Income Tax Act for non-professional players, so winnings are tax-free. This applies whether you play in person, on PlayNow, on an AGCO Ontario site, or on an offshore-licensed casino.

This is general information, not tax advice. If you are unsure or your situation is borderline, consult a Canadian tax professional.

Casual players

The CRA treats casual gambling as an act of pure chance. Because there is no reasonable expectation of profit, gambling winnings don’t qualify as a source of income under the Act, and so they aren’t taxable. This applies to slots, table games, sports betting, poker, lottery and DFS – as long as you play recreationally.

You also cannot deduct gambling losses against other income. The trade-off for tax-free winnings is that losses don’t reduce your tax bill either.

Professional gamblers

If you gamble as a business, the CRA can treat winnings as business income. The leading test is the Supreme Court’s “source of income” test, applied in cases like Stewart v. Canada. For gambling specifically, the courts have looked at:

• Do you have a system or strategy with a documented edge?
• Do you spend a significant portion of your time gambling?
• Do you have a reasonable expectation of consistent profit?
• Do you depend on gambling income for living expenses?

Almost no slot or roulette player meets this bar – the games are negative-expectation, so there’s no realistic expectation of consistent profit. Professional poker players, advantage blackjack players, sports bettors and DFS players are the ones who occasionally fall under this rule. Professional status comes with both obligations (paying tax) and benefits (deducting expenses).

US-source winnings

If you win at a US casino (in person or on a US-regulated online site), the IRS withholds 30% on winnings above the reporting threshold ($1,200 for slots, $5,000 for poker tournaments). Canadian residents can typically reclaim part or all of this through a US tax refund on Form 1040-NR by deducting documented gambling losses up to the amount of winnings. A US-Canada tax specialist can handle the paperwork.

Interest on winnings

While the winnings themselves are tax-free, any interest or investment income you earn from them after depositing in a bank account, GIC or investment is taxable like any other interest. Report it on your normal T1 return.

For more on the legal landscape, see is online gambling legal in Canada? and our responsible gambling guide.

18+ only. Gambling should be entertainment, not income. Set deposit and loss limits before you play. For free, confidential help in Canada call ConnexOntario (1-866-531-2600) or visit ResponsibleGambling.org.