Tax on Online Gambling in Canada
So, you reached the best part of sports betting – the payout. You have requested your winnings from your Canadian betting site and the money is now in your bank account – some genuinely exciting stuff.
Now though you may be wondering whether you are due to pay taxes on your gambling winning and if you have to, how you go about paying taxes on the money you won betting on sports online. If that is the information you are looking for, then this page is for you. We cover just about everything related to taxes and gambling winnings.
Do I Pay Tax on Online Gambling Winnings in Canada?
The general rule on legal gambling winnings and taxes in Canada is simple. Unless you are a professional gambler, you do not need to pay taxes on your gambling winnings. This rule is applied to both gambling winnings won in Canada (such as playing a provincial sports betting service or the lottery) and gambling winnings won outside of Canada (either using an online betting site or when you visit physical casinos in other countries).
But, why, unlike the United States which taxes winnings over $1200 at 30% does Canada not tax their gamblers? It is a pretty simple answer. The Government of Canada and Canada Revenue Agency do not consider gambling to be a constant and viable source of income (there is one exception to the rule which we will touch in a moment). Gambling losses are not deductible on your income tax if you only gamble for fun.
The laws around gambling taxes were also developed for offline betting inside Canada. Betting in Canada is regulated and taxed already. The Canadian Government may one day develop new laws taxing gambling winnings won online or outside of Canada. However, they seem more focused on making their sports betting more competitive and comparable to online sports betting sites, than taxing online sports bettors.
When You Pay Taxes on Gambling Winnings?
As we mentioned above, there are a few scenarios where you do need to pay tax on gambling winnings.
If you are a professional gambler; defined as an individual who makes the majority of their income through a form of gamble that is not the lottery, then you are required to declare winnings (and losses) on your tax return.
You are also subject to tax on gambling winnings if you invest your winnings and earn interest or some form of capital gains. The interest is considered a source of viable income and you will need to claim it on your tax return. Of course, with low-interest rates continuing in Canada, the interest earned by most is likely not enough to impact most sports bettors or push many into a higher income tax bracket.
There is no tax rate on gambling winnings in Canada. The amount of tax, if applicable, on gambling winnings in Canada depends on your total income from gambling plus your total income earned through other sources minus your total losses from gambling.
If you have any doubts or believe your income from gambling is noticeably high – especially if it is higher than the rest of your income – you could consult a tax account or tax lawyer. They can provide more details on taxes and gambling winnings in Canada.
What can you Bet Online?
Online betting sites offer plenty of different forms of gambling for Canadians to enjoy. While this website is more focused on sports betting and what online sportsbooks offer in terms of sports betting options, the sites we recommend on this page offers much more than just odds on stuff like the National Football League.
- Betway100% Deposit Bonus up to $200Bet NowNew Canada customers only. Opt-in required. Bonus based on 1st deposit of $10+. You will get a 100% matched bonus up to $200 based on your first deposit. Full terms apply.
- Bet365Up to $200 in Bet Credits for new customers at bet365Bet NowMin deposit $10. Bet Credits available for use upon settlement of bets to value of qualifying deposit. Min odds, bet and payment method exclusions apply. Returns exclude Bet Credits stake. Time limits and T&Cs apply.
- Sports Interaction100% Bonus up to C$500Bet NowNew customers only. Min $20 deposit. Max $500 CAD bonus. Rollover is 5x deposit + bonus.
- Bodog100% up to $400 + 50 Free Spins Welcome BonusBet NowThis bonus can only be redeemed on your FIRST DEPOSIT. Rollover is 5X Sports | 5X Horses | 40X Casino.
- Spin Palace Sports100% Match up to $200 CADBet Now1st Deposit - Free Bet up to $200 • New customers only • Min deposit $10 • 5x wagering at odds of 1.3+ to unlock free bet • Terms apply
Online Casinos and Poker
A big part of online betting sites is their casino. Canadian online betting sites offer full virtual casino experiences. Canada online casinos feature different styles and domination of virtual slots. They offer a full selection of table games such as roulette, blackjack, baccarat, and craps. They also offer poker rooms. Like when you bet on sports online, when you play casino games and poker you do not need to pay taxes on your winnings unless it is your primary source of income (a general rarity in Canada except for a few poker players).
Another big part of an online betting site is their racebook. Any good online betting site will offer odds on horse racing events from all over Canada and the world. Like sports and casino winnings, bettors in Canada are not required to pay taxes on the money they win betting on the horses.
Betting on eSports
The last part of an online betting site is its eSports betting section. As eSports have grown substantially in popularity over the last few years, any online betting site worth using has an extensive number of betting markets on eSports. Winnings from betting on eSports, like traditional sports betting, is not subject to taxes unless it is your main source of income.
Best Canadian Betting Sites
If you are ready to jump into the action and start betting on sports online, you are in luck. We have the best Canadian betting sites listed below. Join today to receive an awesome welcome bonus. If you are not sure which site to join, you can read our comprehensive online sportsbook reviews here.
Gambling Tax FAQs
Do you have to Pay Tax on Gambling Winnings in Canada?
No, Canadians who gamble for fun are not required to pay tax on gambling winnings as the government does not view it as a consistent or viable source of income.
What is the Tax Rate on Gambling Winnings?
There is no set tax rate on gambling winnings in Canada. The tax rate for professional gamblers or for bettors gaining interest off their gambling winnings is determined by multiple factors such as total income, total losses, and total taxes paid over the year (i.e. you have a secondary income you paid taxes from).
Do Professional Gamblers Pay Taxes in Canada?
Professional gamblers are subject to taxes if gambling is their primary source of income. Most professional bettors are poker players, not sports bettors, and are treated as freelance workers, meaning they can claim their gambling losses.
How do you Pay Taxes on Gambling Winnings?
If you are required to pay taxes on your gambling winnings, you have two options. You can remit taxes throughout the year – most likely every three months at a percentage you decide – or when you file your tax return.
Do Canadians Pay Taxes on when Gambling in the United States?
Yes, if you win more than $1200 in the United States you are subject to a 30% tax. However, due to the Article XXII in the Canada US Tax Treaty, Canadians can file a US income tax form 1040NR and claim your gambling losses, to potentially receive back part of the taxes you paid on your winning. You can also do this as a dual citizen.
Do Foreigners Pay Taxes on Gambling Winning?
If you are visiting Canada and either betting on sports, buying lottery tickets, or playing at a casino, you do not need to pay taxes on your gambling winning. However, if you are not in Canada when you win the bet, collecting the winning could be challenging – especially if it is a significant amount from the lottery.
How do you Make Money from Gambling?
The answer to this question is simple – you win more money than you wager. While many people will make money gambling in their lives, it is rarely anyone's main source of income. Additionally, it is never recommended you treat gambling as a viable and reliable source of income. Gambling should be treated as a form of entertainment. If you have difficulty controlling your gambling, contact the customer service department at your online betting site to help you set limits and control your gambling.