Casino winnings are not taxable in Canada for almost everyone who plays. A jackpot from one of the online casinos licensed by a Canadian province, a good night at the roulette table or a lottery prize stays yours, with no slip and no line on your return. The Canada Revenue Agency lists lottery winnings “of any amount” among the amounts you do not report.
The exceptions are narrow, and one of them made headlines this year. In June 2026, the Supreme Court of Canada declined to hear three poker players taxed on years of winnings. Below are the four cases where tax can apply, what changes at a US casino and the records worth keeping.
What this page covers
Tax-free, unless one of these applies
The four situations where Canadian tax can reach money won by gambling.
Gambling is your business
Winnings become business income when you play in a commercial way and live from it, as three poker players learned in 2025.
Your winnings earn money
Interest, dividends or gains on money you won are taxed like any other investment income.
The prize comes from work
A prize linked to your job, your business or your property counts as income, according to the CRA.
You bet with crypto
Staking a coin is a disposition, so the coin itself can produce a capital gain, even on a losing bet.
Why casual gambling wins stay tax-free in Canada
Canadian income tax reaches income from a source, such as a job, a business or property. A win from playing for pleasure has no such source. The Income Tax Act also closes the capital gains route: under paragraph 40(2)(f), the gain or loss from “a chance to win a prize or bet” is nil.
The leading example is a 2006 Tax Court case. Brothers Brian and Terry Leblanc bet heavily on sports lotteries from 1996 to 1999 and kept net winnings of about $2.76 million each. Chief Justice Bowman ruled that gamblers for whom gambling is “a pleasurable pursuit” are not taxable “even though they do it regularly”, and allowed their appeals.
The same paragraph works in reverse. Because the gain is nil, a casual player’s losses are nil too, so they cannot reduce the tax on a salary or any other income.
When the CRA treats gambling winnings as business income
The Leblanc ruling also described when gambling gains are taxed: when the gambling is part of a business you already run, or when you use your skill to earn a living from a game where skill counts. That second case caught Martin Fournier-Giguère, Antoine Bérubé and Philippe D’Auteuil, taxed on their net poker earnings from 2008 to 2012.
For Fournier-Giguère alone, the amounts reassessed for 2008 to 2011 came to about $1.73 million. On June 10, 2025, the Federal Court of Appeal dismissed all three appeals, noting that they “organized their lives around poker, to which they devoted almost all of their time.” The Supreme Court declined to review the case in June 2026.
Skill versus chance did not decide it. The court applied the test from the Supreme Court’s 2002 Stewart decision: an intention to profit, pursued in a sufficiently commercial way, judged on profit history, training, risk management and time spent. Jonathan Duhamel, the 2010 World Series of Poker Main Event champion, won his own case in 2022 under that test.
Is my gambling a pastime or a business?
The factors the courts weighed in the Leblanc, Duhamel and 2025 poker rulings.
| Factor | Points to a pastime | Points to a business |
|---|---|---|
| Profit over time | Wins and losses come and go | A steady net profit, year after year |
| Time spent | Evenings and weekends around a job | Almost all of your time, as in the 2025 poker case |
| Other income | A salary, a pension or another main source | Gambling is what pays the bills |
| Method and risk | You play for fun, even with a system | Bankroll rules, study, tracked results, limits on risk |
| Training | Nothing that gives you a real edge | Coaching, study tools, a deliberate way to get better |
No single factor decides: the courts weigh them together. A system alone is not enough, since Leblanc kept gamblers tax-free “even compulsively and with some sort of organization or system”. This grid is a reading aid, not an official CRA test.
Interest earned afterwards and prizes from your job
The win itself is tax-free; what it earns afterwards is not. The CRA states that income earned on non-taxable amounts is taxable, such as interest on invested lottery winnings. Once your money reaches your bank, which on licensed Ontario sites often means an Interac e-Transfer withdrawal, any interest, dividends or gains it produces go on your return.
A TFSA keeps that growth out of your income, within your contribution room. The TFSA dollar limit for 2026 is $7,000, added to any room you have not used in earlier years.
The CRA’s exemption also stops at prizes that count as income from employment, a business or property, or a prize for achievement. A draw your employer runs for staff is not a draw at the casino, even when the prize looks the same.
Crypto bets and the tax you can owe on a losing wager
The CRA lists gambling among the ways you can both acquire and dispose of crypto-assets. When you stake a coin, you dispose of it, so the gap between its value at that moment and what you paid is a gain or a loss on the coin. A coin bought for $2,000 and wagered at $3,000 leaves a $1,000 gain to report, even if the hand was lost.
For Ontario players, the question mostly arises on sites they should not be using. Provincial standards only accept deposits authorized by a financial institution and refuse cryptocurrency (AGCO standard 5.69), so a casino that takes coins is not among the casino sites licensed in Ontario.
US casino winnings when you live in Canada
The United States taxes non-residents on gambling winnings at 30%, withheld at the cash desk and reported on Form 1042-S rather than the W-2G given to US residents. Canada still treats a recreational win as tax-free, so the US withholding is usually the only tax you pay. At home, a win on a site from the iGaming Ontario directory is paid in full, with nothing withheld.
What a US casino keeps from a Canadian visitor
Rules for non-residents in the IRS instructions for Form W-2G, revised January 2026.
| Game | US tax | Paperwork |
|---|---|---|
| Slots, keno and bingo | Withheld at 30% | Reported on Form 1042-S, not on the W-2G given to US residents |
| Poker tournaments and other games | Withheld at 30%, as a general rule | Same 1042-S reporting |
| Blackjack, baccarat, craps, roulette, big-6 wheel | Not withheld | The IRS exempts these table games for non-residents |
Part of it can come back. The Canada–US tax treaty lets Canadian residents deduct US gambling losses against US gambling winnings “in the same manner as a U.S. resident,” according to IRS Publication 597. That means filing a US non-resident return (Form 1040-NR), usually with a US taxpayer number (ITIN), and proof of the losses.
One change to watch: from tax year 2026, US residents can deduct only 90% of their gambling losses. Because the treaty refers to US-resident treatment, ask a cross-border preparer how that cap applies to your claim before counting on a full refund.
Worked example: a jackpot in Las Vegas
A Canadian resident hits a slot jackpot and files a US non-resident return to deduct losses under the treaty.
| Slot jackpot | US$5,000 |
|---|---|
| Withheld at the cash desk (30%) | US$1,500 |
| Documented slot losses the same year | US$3,000 |
| Before 2026: tax on US$2,000 net | US$600, so US$900 comes back |
| From 2026, if the 90% cap applies: tax on US$2,300 net | US$690, so US$810 comes back |
Illustration only, in US dollars. The tax is 30% of winnings minus deductible losses, and losses can never exceed winnings. Whether the 2026 cap applies to treaty claims is for a cross-border preparer to confirm.
The records worth keeping after casino wins and losses
Nothing on your return asks about recreational wins, but records still help. A large withdrawal can prompt your bank to ask where the money came from, and if your play becomes more regular, your own history shows whether it ever looked like a business. Download your account history before closing an account and keep the matching bank statements.
Casinos, including online ones, report every payout of $10,000 or more, or several linked payouts within 24 hours, to FINTRAC, Canada’s anti-money-laundering agency. That report is not a tax slip, but FINTRAC can share intelligence with the CRA in the cases the law allows. Identity checks before a payout are one of the account checks we score in each review.
Tax rules move, and this page will follow them. If a rule described here has changed, flag it to the editor and it will be checked against the source.
Short answers before you file
I play poker a few nights a month. Are my winnings taxable?
Very unlikely. The players taxed in 2025 had organized their lives around poker and played almost full time. Jonathan Duhamel, a world champion, kept his winnings tax-free because the court found he did not play in a commercial way and poker was not his main occupation. Occasional games are far from that line.
Are sports betting winnings taxed in Canada?
Not for a casual bettor. The Leblanc brothers kept about $5.5 million in sports lottery winnings tax-free, even though they bet large sums for years. A bettor who works the odds full time, with a set bankroll and a written method, could be treated as running a business, as with poker.
Can I deduct gambling losses from my salary?
No. For a recreational player, the Income Tax Act sets both gains and losses from a bet at nil. Losses only count inside a gambling business, reported on form T2125 like any self-employed income, and claiming a business mainly to deduct losses invites the CRA to test whether one exists.
Are lottery prizes paid “for life” taxed?
OLG says that, generally speaking, lottery wins in Ontario are not taxed. For prizes paid as an annuity, it explains that OLG or the Interprovincial Lottery Corporation, depending on the game, makes arrangements for the taxable portion, so check the game conditions before choosing that option.
My bank asked about a large deposit from a casino. What do I show?
Your casino account history, which lists the withdrawal and its date, is usually enough, along with the matching line on your bank statement. Download it while your account is open, since some sites keep only a limited history online.
Sources · 16 official and legal sources, checked October 11, 2026
Canadian tax law and the CRA
- CRA, amounts that are not reported or taxedcanada.ca
- CRA, crypto-assets and your tax obligationscanada.ca
- Income Tax Act, section 40laws-lois.justice.gc.ca
Court decisions
- Leblanc v. The Queen, 2006 TCC 680decision.tcc-cci.gc.ca
- Fournier Giguère v. The King, 2022 TCC 132decision.tcc-cci.gc.ca
- Fournier-Giguère v. The King, 2025 FCA 112decisions.fca-caf.gc.ca
- Duhamel v. The Queen, 2022 TCC 66decisions.fca-caf.gc.ca
- The Canadian Press, Supreme Court declines poker appeal (June 4, 2026)nationalnewswatch.com
US rules
Lotteries and savings
- OLG, winners FAQolg.ca
- CRA, TFSA dollar limitscanada.ca
Regulators
- FINTRAC, reporting casino disbursementsfintrac-canafe.canada.ca
- FINTRAC, mandate and disclosuresfintrac-canafe.canada.ca
- AGCO, Registrar’s Standards: funds managementagco.ca