Are Casino Winnings Taxable in Canada?

The short answer

• Recreational players: winnings are not taxed

  The CRA lists “lottery winnings of any amount” among the amounts you do not report or pay tax on. Its technical guidance adds that gambling is not generally treated as a commercial activity, so a recreational player’s winnings are not income and a recreational player’s losses cannot be deducted.

• Gambling as a business: net earnings are taxed

  If your gambling is carried on in a sufficiently commercial manner, the CRA can treat your net earnings as business income. The CRA calls these cases very exceptional, and the courts look at the facts of each player.

• Income earned on winnings: taxed

  Once winnings sit in a savings account or an investment, what they earn is ordinary income. The CRA’s example is interest on invested lottery winnings, which must be reported.

• Winnings in the United States: American rules apply

  The US tax authority can withhold 30% of some gambling winnings paid to non-residents, including Canadians. Canadian residents can claim US gambling losses against US winnings on a US non-resident return.

What the law and the CRA say

There is no single “gambling tax” section in Canadian law. The answer comes from three places that point the same way for ordinary players.

• The Income Tax Act, paragraph 40(2)(f)

  The Act says that a gain or loss from disposing of a chance to win a prize or bet, or a right to receive a prize or winnings on a bet, in connection with a lottery scheme or a pool system of betting, is nil. In plain terms, a win of that kind is not a taxable capital gain, and a loss is not a deductible capital loss.

• The CRA’s windfall rule

  CRA Income Tax Folio S3-F9-C1, effective 3 July 2020, says that “an amount received as a windfall is not subject to tax”. It lists the signs of a windfall, among them that you had no enforceable claim to the payment, made no organized effort to receive it and had no reason to expect it to recur.

• Lottery prizes and the exceptions

  The same folio says a lottery prize “is not taxable as either a capital gain or income”. The CRA’s list of amounts that are not reported or taxed, updated on 17 September 2026, carries the same rule with exceptions: a prize that is really income from employment, a business or property, or a prize for achievement, is taxable.

• Why frequent play is not enough

  The folio notes that “gambling is always undertaken in pursuit of profit”, so wanting to win does not by itself turn play into a business. Even regular, frequent gambling “is not generally regarded as a commercial activity except under very exceptional circumstances”.

When gambling becomes a business

The CRA says the answer depends on all the facts and on the player’s whole course of conduct. The folio lists four factors and says that no single one is conclusive.

• 1. How organized the activity is

  The degree of organization present in the way you pursue the activity.

• 2. Special knowledge that reduces chance

  The CRA points to taxpayers who “applied inside information, knowledge and skill to their activities”.

• 3. Pleasure or livelihood

  The question is whether you gamble for enjoyment or as a means of earning a living.

• 4. The extent of the activity

  How much you gamble, including the number and frequency of bets.

The other side of the rule matters too. In the CRA’s words, when an activity is a hobby, “any excess of expenses over receipts is a personal or living expense”, and it cannot be deducted. A recreational player cannot claim gambling losses against other income.

What the poker cases decided

Tax Court of Canada cases involving four poker players reached opposite results on the same legal test, and the Federal Court of Appeal has since confirmed how that test applies.

Sources: the Tax Court of Canada and Federal Court of Appeal judgments and the Supreme Court of Canada docket for file 41975, listed at the end of this page.

• Why Duhamel won

  Jonathan Duhamel won the main event of a world poker championship in Las Vegas in 2010 and kept playing in the following years. Justice Dominique Lafleur assessed whether his poker was carried on “in a sufficiently commercial manner” or was more of a hobby, and concluded that his net gains for 2010, 2011 and 2012 were not income.

• Why the other three lost

  For the other three players, the Tax Court found that poker was “much more than a pleasurable pursuit”: it was their livelihood, they devoted almost all their time to it and drew all or almost all their income from it. Their poker income in the years at issue totalled at least $5,241,025 for Mr. D’Auteuil, $3,219,074 for Mr. Bérubé and $1,450,000 for Mr. Fournier-Giguère. The court also found businesslike behaviour, such as risk management and computer tools that kept statistics on their own play and their opponents’.

• What the Federal Court of Appeal added

  The appeal court noted the Tax Court’s view that the criteria were the same as in Duhamel and that the facts led to a different result, and it found no error that would justify stepping in. It accepted that a recreational activity can become a source of income if it is carried on in a sufficiently commercial manner, and described the cases where the line between the two is thin as “rather rare”. The Supreme Court of Canada declined to hear a further appeal on 4 June 2026, so the 2025 decision stands.

• What this means for an ordinary player

  The players taxed in these cases had organized their lives around poker and earned large, steady amounts from it over several years. A recreational player who wins a jackpot or a tournament is in a different position under the CRA’s own guidance.

Interest and other income from winnings

The tax-free treatment covers the win itself, not what the money earns afterwards. The CRA states that “income earned on any of the above amounts is taxable” and gives the example that “any interest that you earn when you invest lottery winnings must be reported on your return”. The same applies to dividends or other investment income once winnings are invested.

Winnings from a casino in the United States

Canadians who win at a casino in the US deal with the Internal Revenue Service, not only the CRA. The points below come from IRS Publication 515 (2026) and the IRS instructions for Form 1040-NR (2025).

• 30% withholding on some winnings

  Non-residents of the US are generally subject to 30% withholding on the gross proceeds from gambling won in the United States, unless the income is connected with a US business or exempted by a treaty.

• Some table games are exempt

  The IRS imposes no tax on non-business gambling income a non-resident wins playing blackjack, baccarat, craps, roulette or big-6 wheel in the United States.

• Canadians can deduct US losses against US winnings

  A resident of Canada who is not in the business of gambling reports US gambling winnings on Form 1040-NR and can deduct US-source gambling losses up to the amount of US-source gambling winnings. A net gambling loss is not deductible. A cross-border tax professional can tell you whether filing makes sense in your case.

Frequently asked questions

• Do I have to report casino winnings on my tax return?

  Not as a recreational player. The CRA lists lottery winnings among the amounts that are not reported or taxed, and treats gambling as a commercial activity only in very exceptional circumstances. Report any interest or investment income the winnings earn later.

• Does one big jackpot make me a professional gambler?

  The CRA’s factors are about organization, special knowledge, intention and the extent of the activity over time. The folio says that no single factor is conclusive, and the poker cases turned on years of conduct, not one result.

• Can I deduct my gambling losses?

  Not as a recreational player in Canada: if winnings are not income, losses are not deductible either, and hobby losses are personal expenses. US gambling losses are a separate matter on a US return, as explained above.

• Is poker taxed because it is a game of skill?

  Not on that ground. In the 2022 decisions the Tax Court said that whether skill outweighs chance was not what decided the business question. The courts asked whether each player’s poker was carried on in a sufficiently commercial manner.

Free, confidential help

Winnings are never a reason to keep playing. Every provincial platform and open market includes deposit limits and self-exclusion; our responsible gambling guide explains how to use them.

Players must be 18 or older in Alberta, Manitoba and Quebec and 19 or older in every other province. Gambling can be addictive. Please play responsibly and within your means.

Sources

• Income Tax Act, paragraph 40(2)(f)

  Justice Laws website, Government of Canada: section 40.

• Income Tax Folio S3-F9-C1, Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime

  Canada Revenue Agency, effective 3 July 2020: Folio S3-F9-C1.

• Amounts that are not reported or taxed

  Canada Revenue Agency, page updated 17 September 2026: Amounts that are not reported or taxed.

• Duhamel v. The Queen, 2022 TCC 66; Fournier Giguère v. The King, 2022 TCC 132; D’Auteuil v. The King, 2023 TCC 3; Bérubé v. The King, 2023 TCC 12; Fournier-Giguère v. His Majesty the King, 2025 FCA 112

  Tax Court of Canada and Federal Court of Appeal, official English translations: 2022 TCC 132, 2025 FCA 112.

• Philippe D’Auteuil, et al. v. His Majesty the King, et al., file 41975

  Supreme Court of Canada, case information, judgment on leave of 4 June 2026: docket 41975.

• Publication 515 (2026) and Instructions for Form 1040-NR (2025)

  Internal Revenue Service, United States: Publication 515, Instructions for Form 1040-NR.