Are Gambling Winnings Taxable in Canada? (2026 Guide)

Hit a jackpot in Toronto, cash out a big poker tournament in Montreal, or win $50,000 on a slot from your couch in Calgary — and the Canada Revenue Agency, in almost every case, wants none of it. In Canada, recreational gambling winnings aren't taxed.

"Almost every case" is doing some work in that sentence, though. Professional gamblers can be taxed, and courts have been drawing that line more aggressively in recent years. Income you earn on your winnings is taxable. And if you win across the border, the US takes 30% before you leave the casino — unless you know how to get it back.

Here is how gambling winnings are actually taxed in Canada in 2026.

The short answer: recreational winnings aren't taxable

The CRA treats gambling and lottery winnings won by ordinary players as windfalls, not income. Its technical guidance on the subject — Income Tax Folio S3-F9-C1 — states plainly that windfalls aren't subject to tax, and that a lottery prize is taxable neither as income nor as a capital gain. The CRA's own list of amounts you don't report on your return includes lottery winnings of any amount.

In practice, that means:

• Casino and online casino winnings — slots, blackjack, roulette, live dealer — are not reported.

• Lottery prizes, including multi-million-dollar Lotto Max jackpots, are not reported.

• Sports betting winnings for a recreational bettor are not reported.

• Bonus winnings you clear and withdraw are treated the same way as any other winnings — our Canadian casino bonus guide covers how clearing works.

Canadian casinos, OLG and other provincial operators don't issue tax slips for winnings, because there's nothing to report. There's also no tax withheld when you cash out at a regulated Canadian casino or online site.

Quick reference: what's taxable and what isn't

The exception: when gambling becomes a business

The CRA's position is that gambling can produce taxable business income — or a deductible business loss — when it's carried on as a business rather than a pastime. Folio S3-F9-C1 lists the factors that point toward a business:

• Degree of organization — systems, records, bankroll management, and treating it like a job.

• Special knowledge or inside information that reduces the element of chance.

• Intention — gambling as a means of earning a living rather than for pleasure.

• Number and frequency of bets.

Frequent, regular, even systematic gambling is not enough on its own. The leading case here is Leblanc v. The Queen (2006 TCC 680), where two brothers won about $5.5 million net on sports lottery tickets over several years. The Tax Court held their winnings were not taxable: they had no edge and no real system, just heavy play and luck. The CRA quotes the decision's central point in its own guidance — gambling, even regular and systematic gambling, is not generally a commercial activity except in very exceptional circumstances.

Skill changes the picture. In Luprypa (1997), a skilled pool player who hustled bar patrons for money was found to be running a business, and his winnings were taxed.

Poker players: the line has moved

Poker is where the law has been most active. In 2022 and 2023, the Tax Court issued a series of decisions on professional poker players. One player was found not taxable (Duhamel, 2022 TCC 66), but three others — Fournier-Giguère (2022 TCC 132), D'Auteuil (2023 TCC 3) and Bérubé (2023 TCC 12) — were found to be running a business, with winnings taxed as income.

On June 10, 2025, the Federal Court of Appeal upheld all three in Fournier-Giguère v. The King (2025 FCA 112), stating there is no hard-and-fast rule against taxing gambling income. The court applied the general business test from the Supreme Court's Stewart decision. In June 2026, the Supreme Court of Canada declined to hear a further appeal, leaving the Federal Court of Appeal's ruling in place as binding precedent. Each case still turns on its own facts.

The takeaway: a full-time poker player with a disciplined, skill-based approach and no other main income is now squarely at risk of being taxed. A recreational player who has a great year is not.

The trade-off works both ways

Professional status isn't all downside. If you're taxed as a business, you can deduct legitimate expenses and losses against your gambling income. A recreational player can't: losses are personal expenses, so a bad year at the tables doesn't reduce your other taxes. In Cohen v. The Queen (2011 TCC 262), a lawyer who turned to poker tried to deduct about $121,000 in losses; the court denied them because his play wasn't businesslike enough. The CRA won't let you call yourself a professional only in losing years.

Income earned on your winnings is taxable

The windfall itself is tax-free. What you do with it afterward is taxed like any other money:

• Interest from a savings account or GIC holding your winnings is taxable, and your bank will issue the normal slip.

• Dividends and capital gains from investing your winnings are taxable.

• Gifts of winnings aren't taxed in the recipient's hands, but Canada's attribution rules can send investment income on money you give a spouse — or, for income other than capital gains, a minor child, niece or nephew — back to you for tax purposes.

If you've landed a life-changing amount, this is where an accountant earns their fee.

What about crypto winnings?

If you win in cryptocurrency, the win itself follows the same windfall rule. What happens next is different. The CRA treats selling crypto, trading it for another coin, gifting it or spending it as a disposition, and any gain since you received it is taxable as a capital gain (or business income, for someone trading as a business).

The Income Tax Act deems a prize from a lottery scheme — a term that, under the Criminal Code definition, covers casino games — to be acquired at its fair market value (section 52(4), reflected in CRA Folio S3-F9-C1). In practice, that means your cost base is generally the coin's value on the day you won it, so only the later change in value is taxed. The position is less clear-cut for winnings from offshore crypto casinos, so keep records of each win's value on the day it landed. Our crypto casinos in Canada guide covers the payment side.

Winning in the US? Here's how to get your 30% back

This is the one situation where a Canadian really does lose money to tax — and most people never claim it back.

US casinos withhold 30% of gambling winnings paid to non-residents, including Canadians, on wins that trigger reporting (typically jackpots on slots, keno and bingo, and large tournament prizes). You'll receive Form 1042-S showing the amount withheld.

Two things help:

1. Some table games are exempt. Under US tax law, non-residents don't pay US tax on non-business winnings from blackjack, baccarat, craps, roulette or big-6 wheel.
2. The Canada–US tax treaty lets you offset losses. Canadian residents can deduct US gambling losses against US gambling winnings in the same year, up to the amount of the winnings. If your losses are close to your winnings, most or all of the withholding comes back.

To claim it, you file a US non-resident return (Form 1040-NR) and need an Individual Taxpayer Identification Number (ITIN), applied for with Form W-7 alongside the return. Keep proof of your losses — casino win/loss statements, player-card records and receipts. Refunds commonly take six months to a year.

One 2026 wrinkle: new US legislation limits gambling-loss deductions to 90% of losses starting with the 2026 tax year. Whether and how that cap applies to the treaty offset for Canadians isn't settled. A bill to repeal the cap retroactively to January 1, 2026 (H.R. 10357) cleared the House Ways and Means Committee on September 16, 2026, but it isn't law yet — check its status before you file, and use a cross-border tax preparer for any large claim.

None of this creates Canadian tax: the US win is still a windfall at home.

Does your province make a difference?

No. Gambling winnings are a federal income-tax question, and the windfall rule applies in every province. Quebec, which runs its own provincial income tax, also treats lottery prizes as non-taxable when received. The province affects where you can legally play — see our guides to Ontario online casinos and Alberta's new market — but not how your winnings are taxed.

A practical checklist

• Keep records anyway. Win/loss statements and withdrawal histories are useful if the CRA ever asks where a large deposit came from — and essential for any US refund claim.

• Don't claim losses on your Canadian return as a recreational player. They aren't deductible.

• Report the income your winnings earn, not the winnings themselves.

• Track crypto values on the day you receive them if you're paid in crypto.

• Talk to a tax professional if gambling is your main source of income, or if you're claiming back US withholding.

If you're playing at higher stakes, our VIP and high-roller casino guide explains why volume alone doesn't make you a professional, and the Canadian payment methods guide covers how withdrawals reach your bank.

FAQ

Do I have to report casino winnings on my Canadian tax return? No, not as a recreational player. The CRA treats gambling and lottery winnings as tax-free windfalls, and there's no slip to report.

Are online casino winnings taxed differently from land-based wins? No. The same windfall rule applies whether you win online, at a casino or on a lottery ticket.

Can I deduct gambling losses in Canada? Only if you're taxed as a professional gambler running a business. Recreational players can't deduct losses.

Who counts as a professional gambler in Canada? Someone whose gambling is organized, skill-based and aimed at earning a living, with high frequency of play. Following the Federal Court of Appeal's 2025 ruling, full-time poker players are the most likely to be taxed.

Can I get back the 30% a US casino withheld? Often, yes. File Form 1040-NR with an ITIN and use the Canada–US tax treaty to deduct your US gambling losses against your US winnings in the same year.

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This article is general information, not tax advice; speak to a qualified tax professional about your situation. Gambling should be entertainment, not a way to make money. You must be of legal gambling age in your province (18 or 19). If gambling stops being fun, free, confidential support is available — in Ontario through ConnexOntario (1-866-531-2600), and across Canada through the Responsible Gambling Council. Please play responsibly.