Taxation on Canadian Online Casino Winnings

Ana-Maria Ciobanu

Casino expert

 Updated:
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We’ve dived deep into online gambling taxation, presenting you with concise insights about taxation on winnings, claims on losses, and much more.

Are your gambling wins subject to taxation?

Canadian citizens should note that their betting profits are treated the same as lottery jackpots, meaning they aren't taxed.

In Canada, online gambling activities aren’t taxed by the government because they see these earnings as lucky windfalls rather than liable income.

Tax Implications for Casual Online Gamblers in Canada

The rule of 'no tax' stands for recreational gamblers whose windfalls come from Canadian land-based casino establishments, in addition to...online gambling sites operating within its jurisdiction.

The only Canadian governing agency is the Kahnawake Gaming Commission. Whether a casino holds a license from bodies like MGA or UKGC doesn’t matter—what’s essential is being a Canadian resident and accessing the casino within the country.

Taxes for Professional Online Gamblers in Canada

Despite Canada’s lax stance on online gambling taxes, professional players face a different narrative. Taxes are a must for their gambling revenues.

What’s a professional player?

Playing for a living declares you as a pro. If gambling is your entertainment and not your bread and butter, it’s likely you have another job as your principal financial source.

With the title of a professional gambler comes obligations—one being the responsibility to address online gambling taxes.

Here, your winnings turn into taxable business earnings. Document them, along with any costs, on Schedule C as part of your self-employment revenue.

Interestingly, Canada Revenue Agency doesn't seem too hasty when it comes to evaluating and auditing full-time gamblers.

Furthermore, losses—an integral aspect of gambling—can influence how professional players are taxed on their casino profits.

What implications do losses have?

If your losses are substantial, they can directly impact your comprehensive income, and supposedly factor into online casino tax assessments. Yet, a 2012 court ruling stated gambled losses can't be deducted.

Even non-professional gamblers need to declare their winnings as 'other income' on line 8 of their 2021 Schedule 1. Also, bring any interests from winnings to light in the T5 form.

The past and future of gambling taxes

Initially, Canada's decision to go without income tax was a strategy to attract immigrants. This changed at the onset of World War I.

This historical tax exemption remains for online casino earnings, and it’s anticipated to persist with no foreseeable modifications.

Income taxes in 2019

Professional winnings fall under regular income taxes, akin to any other earning, so we’ve laid out a comprehensive guide to assist.

Income taxes in 2019

Your earnings will slot into an income tax bracket calculated on your taxable earnings. Note that these values adjust annually to account for inflation.

Federal Tax Bracket Information:

Federal income tax brackets Federal income tax rates

$47,630 or less

15%

$47,630 to $95,259

20.5%

$95,259 to $147,667

26%

$147,667 to $210,371

29%

More than $210,371

33%

Deducting gambling losses

If your losses don't surpass your income, there’s a chance to reclaim some of them. Meticulously record your wins and losses for accurate claims and considerations.

Necessary documents you must keep:

  • Keno – Keep your purchased tickets, validated by the establishment, alongside payout records and credit notes.
  • Slots – Track the machine number and organize your wins by the date and time each session concluded.
  • Blackjack, Poker, Craps, Roulette, Baccarat, Wheel of Fortune – You'll require the table's number plus venue credit card details to see if any credit was released.
  • Bingo – Maintain logs of the number of games, ticket costs, and additional paperwork such as receipts from the cashier.
  • Horse, harness, or dog races – Log your bets, the races themselves, and any winning coupons.
  • Lotteries – You should document your tickets, acquired winnings, any losses, and their corresponding dates.

Efficient funds management

Even without tax requirements on online gambling, smart bankroll management ensures responsible gaming and sustained enjoyment.

Efficient funds management

We've meticulously studied and combined the crucial elements of fund handling and organization for casino play.

Funds Administration Essentials

  • Refrain from Borrowing – Gambling with loans strongly signals the grip of addiction, which strains finances.
  • Reflect on How Losses Impact You – The casino should be a place of joy, not the cause of financial ruin. Avoid stakes that jeopardize your stability.
  • Sidestep Greed – The key to gambling is recognizing when to stop, even amid winning streaks.
  • Plan Your Budget – Just like spontaneous shopping without a list can drain your funds, impulsive casino trips can, too.
  • Be Honest with Yourself and Others – Distorting your wins or losses won't aid you—it masks the reality of your circumstances.
  • Take Strategic Breaks – Before diving into your next gambling session, take pauses to evaluate your paths.
  • Postpone the Play – Whether online or offline, remember that casinos are accessible tomorrow, allowing restraint today.
  • Remain Clear-headed – Good judgment is elusive when influenced by substances—stay sober.
  • Stick to Familiar Terrains – Master the games you know rather than risking substantial amounts on untested ones.

Conclusion

If gambling isn’t your primary earnings, no taxes are due for winnings from either traditional or digital Canadian casinos.

Conversely, professional players must view their earnings as taxable, and thus accountable for online gambling taxes. As a Canadian, remember you can reclaim any percentage withheld by the United States on winnings earned there.

These are the cornerstones of how online gambling is taxed in Canada. It’s expected that casual gamblers will continue to enjoy tax-free winnings.

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