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Are Casino Winnings Taxable in Canada?

By James Burke · Updated Oct 16, 2026

General information, not tax advice. Your situation may differ; check with the CRA or a tax professional.

This page summarises what the Canada Revenue Agency (CRA) has published about gambling winnings. All quotes are from CRA Income Tax Folio S3-F9-C1, "Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime", effective July 3, 2020 (checked Oct 16, 2026). The folio itself notes that it "is not a substitute for the law".

Short answer: generally not taxable for recreational players

For people who gamble as a pastime, the CRA's position is that winnings are generally not taxable. The exception is gambling that amounts to a business, where winnings can be business income and losses can be business losses. The CRA says that's decided on the facts of each case, and that it's rare. Whether winnings are taxed or not, the house edge means players lose over time on average, so tax treatment is no reason to gamble.

What the CRA's folio says

• Windfalls (¶1.2): "an amount received as a windfall is not subject to tax." The folio lists factors, based on The Queen v. Cranswick (F.C.A.), such as having no enforceable claim to the payment and making no organized effort to receive it.
• Gambling (¶1.12): "An individual's gambling activities may result in taxable business income or a business loss. This will be the case if the gambling activities constitute a source of income (that is, carrying on the business of gambling)." Quoting Balanko v. M.N.R., the folio adds that the intention to win "does not lead to a conclusion that all who gamble, or even all those who gamble frequently, are carrying on a business."
• Lottery prizes (¶1.16–1.17): a prize from a lottery scheme "is not taxable as either a capital gain or income", unless the circumstances make it employment, business or property income. Paragraph 40(2)(f) of the Income Tax Act means no taxable capital gain or allowable capital loss arises from the chance to win a lottery prize.

When gambling can become business income

The folio (¶1.13) quotes the Tax Court of Canada in Leblanc v. The Queen, 2006 TCC 680: "Gambling - even regular, frequent and systematic gambling - is something that by its nature is not generally regarded as a commercial activity except under very exceptional circumstances."

The exceptions noted (¶1.14) involve people who "applied inside information, knowledge and skill"; the folio's example is Luprypa v. The Queen, a pool player who challenged inebriated players and was held taxable on his winnings. Under ¶1.15, whether someone carries on a gambling business is "a question of fact", and the CRA considers:

• the degree of organization in the activity,
• special knowledge or inside information that reduces the element of chance,
• the intention to gamble for pleasure compared with gambling for profit as a means of gaining a livelihood, and
• the extent of the activity, including the number and frequency of bets.

No single factor decides it. Casino games of chance such as slots have a built-in house edge that skill doesn't remove.

Losses

For a hobby, the folio (¶1.1) says "neither amounts received nor expenses incurred are included in the income computation for tax purposes", and any excess of expenses is a personal expense whose deduction is denied by paragraph 18(1)(h). So a recreational player can't deduct gambling losses. Under ¶1.12, a business loss arises only where the gambling is a business.

Interest on money you've won

Money you earn on your winnings after you receive them, such as interest or investment income, is a separate question from the winnings themselves. Ask the CRA or a tax professional how it applies to you.

When to talk to a professional

If gambling is a large or regular part of how you earn money, if you've received a very large prize, or if you're unsure how to report something, consult a tax professional or the CRA for your situation. This page doesn't calculate anyone's tax.

FAQs

Do I report casino winnings on my tax return?

Under the CRA folio, winnings from recreational gambling are generally not taxable. If your gambling may be a business (see the ¶1.15 factors above), check with the CRA or a tax professional.

Can I deduct gambling losses?

Not as a recreational player: the folio treats hobby losses as personal expenses (¶1.1). Losses are business losses only if a gambling business exists (¶1.12).

Is a big jackpot taxed differently?

The folio doesn't set a size threshold. What it looks at is whether the gambling is a business, not the amount won. The lottery prize rules in ¶1.16–1.17 apply to lottery schemes.

What makes someone a professional gambler for tax purposes?

It's a question of fact based on organization, special knowledge, intent and the extent of the activity (¶1.15). The folio, quoting Leblanc, says gambling is a commercial activity only "under very exceptional circumstances".

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General information, not tax advice. Consult a tax professional or the CRA for your situation. Sources checked Oct 16, 2026.

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