In recent years, online gambling has surged in popularity across Canada. With the growing number of players trying their luck at virtual casinos, many are left wondering how the Canada online gambling tax laws apply to their winnings.
In 2025, the Canada Revenue Agency (CRA) clarified its position on online casino earnings, making it crucial for both casual players and professional gamblers to understand what’s taxable—and what isn’t.
Here’s everything you need to know about the updated CRA winnings rules and how they impact your casino income in Canada.
Understanding the Basics: Is Online Casino Income Taxable in Canada?
Canada has traditionally taken a relatively lenient stance when it comes to gambling winnings. Generally speaking, if you’re a casual gambler playing for fun, your winnings—whether from online slots, poker, or roulette—are not considered taxable income.
However, this changes significantly if you fall under the category of a professional gambler or if your gambling activities generate consistent income.
When Winnings Are Not Taxable:
- You gamble as a hobby
- You don’t rely on gambling for your primary income
- You don’t employ strategies or systems that resemble a business operation
In these cases, your winnings are treated similarly to lottery prizes: tax-free under current CRA guidelines.
CRA Winnings Rules 2025: What’s New?
The CRA winnings rules have been updated in 2025 to add clarity to grey areas, especially with the rise of digital gambling platforms and international online casinos.
Key Updates Include:
1. Distinction Between Casual and Professional Gambling
If you’re gambling frequently, keeping detailed records, and applying skill-based strategies (particularly in games like poker), the CRA may classify you as a professional gambler. In this case, your casino income in Canada is considered business income and subject to taxation.
Example: If you’re streaming poker games and making money through affiliate links and winnings, you’re operating a business in the eyes of the CRA.
2. Reporting Foreign Casino Income
If you win money on an online casino based outside Canada, and especially if funds are held in offshore accounts, you may be required to declare these on your annual tax return.
New Rule in 2025: All online winnings exceeding CAD $10,000 from foreign platforms must be reported, even if they were not withdrawn to a Canadian bank account.
3. Crypto Winnings and Casino Earnings
Crypto gambling is on the rise, and the CRA now requires that all Canada online gambling tax obligations include earnings in cryptocurrencies. Winnings must be declared in CAD based on the exchange rate at the time of receipt.
Tip: Maintain detailed records of crypto transactions related to gambling, as they may be reviewed in a CRA audit.
What If You’re a Professional Gambler?
If you’re classified as a professional gambler, your situation changes significantly. Here’s what you need to do:
- Report winnings as income on your T1 tax return
- Deduct allowable expenses such as internet fees, travel to tournaments, and software tools
- Keep meticulous records of every session and transaction
Note: Even if you lose money overall, the CRA still expects an annual report of your gambling-related income and expenses.
Tips for Staying Tax-Compliant
- Keep Records – Track all deposits, withdrawals, wins, and losses.
- Use Canadian-Licensed Casinos – They make recordkeeping and compliance easier.
- Consult a Tax Professional – Especially if gambling is a significant source of income.
- Avoid Commingling Funds – Keep gambling winnings separate from other income streams.
- Understand Your Status – If you’re unsure whether you’re a casual or professional gambler, seek advice to avoid penalties.
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Conclusion
The updated Canada online gambling tax rules in 2025 aim to address the evolving digital gaming landscape. While casual players can still enjoy their winnings tax-free, those who gamble regularly or professionally must be aware of their responsibilities under CRA winnings rules.
Whether you’re playing for fun or profit, understanding how the CRA views your gambling activity ensures peace of mind and prevents future tax surprises. When in doubt, document everything and seek expert guidance.
FAQs
Q1: Are my online casino winnings taxable in Canada in 2025?
A1: If you’re a casual player, your winnings are generally not taxable. However, if gambling is your primary source of income, it may be considered business income and subject to tax.
Q2: Do I need to report foreign online casino winnings to the CRA?
A2: Yes. As of 2025, all foreign winnings over CAD $10,000 must be declared, regardless of whether they are withdrawn to a Canadian account.
Q3: Are gambling losses tax-deductible in Canada?
A3: Only if you’re considered a professional gambler. In that case, you can deduct losses and certain expenses from your gambling income.
Q4: What if I gamble with cryptocurrency?
A4: You must report crypto gambling winnings in Canadian dollars based on the exchange rate at the time of receipt. These are subject to the same tax rules as fiat currency.
Q5: How can I tell if I’m considered a professional gambler?
A5: If you gamble frequently, rely on it for income, and approach it in a structured, business-like manner, the CRA may classify you as a professional gambler.
