Are Gambling Winnings Taxable in Canada?

This explainer sets out what the CRA actually says, when the professional-gambler exception applies, how online, offshore, crypto and prediction-market wins fit in, and what records to keep. It quotes the CRA’s own pages throughout. It is general information, not tax advice.

The CRA rule: winnings are not income

The CRA’s page Amounts that are not reported or taxed (last modified September 17, 2026) lists amounts you “do not have to report” as income. The first item is:

“lottery winnings of any amount, unless the prize can be considered income from employment, a business or property, or a prize for achievement”

The CRA’s technical guidance on the subject is Income Tax Folio S3-F9-C1, Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime. It covers “gambling winnings” as well as lotteries, and it takes three product types in turn:

In the CRA’s words, “any interest that you earn when you invest lottery winnings must be reported on your return.” The same goes for other income your winnings produce once they are yours.

There is one more rule for prizes that aren’t cash. If you win a car or a house in a lottery, the folio says you are treated as having acquired it at its fair market value on the day you won it (¶1.17). If you later sell it for more than that, the folio’s rule means the gain is measured from that value.

When gambling becomes business income

The CRA doesn’t say “professional gambler”. Its test is whether you are carrying on a business of gambling, and the folio makes clear that this is a high bar.

• Wanting to win isn’t enough. The folio quotes Balanko v. M.N.R. (1981): the intention to make money is “shared by all who gamble” and “does not lead to a conclusion that all who gamble, or even all those who gamble frequently, are carrying on a business” (¶1.12).
• Even systematic play usually isn’t a business. It quotes the Tax Court 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” (¶1.13).
• The exceptions involve skill or an edge. The cases where winnings were taxed “relate to taxpayers who applied inside information, knowledge and skill”. The folio’s example is Luprypa v. The Queen (1997), a pool player who “in cold sobriety would challenge inebriated pool players to a game of pool” (¶1.14).
• Running the game is always business. “Profits derived from bookmaking or from the operation of any gambling establishment (carried on legally or otherwise) constitute income from a business” (¶1.11).

The folio says the question “is a question of fact” to be decided from “the taxpayer’s entire course of conduct” (¶1.15). It lists four factors, and no single one decides it:

1. the degree of organization in how you gamble,
2. whether you have special knowledge or inside information that “reduce[s] the element of chance”,
3. whether you gamble for pleasure or “for profit as a means of gaining a livelihood”, and
4. how much you gamble, “including the number and frequency of bets”.

Games of pure chance sit at the far end of this scale. The folio says lotteries “lack the badges of trade” that the usual business tests look for (¶1.12). On our reading of ¶1.14, skill-based play such as poker or sports betting is where the question is more likely to come up.

If it is business income: 2026 tax rates

If your gambling is a business, your net gambling profit is taxed as business income at your ordinary rates, and a net loss can be a business loss. Federal and provincial tax both apply. The CRA notes that provincial rates apply “in addition to” federal rates, and that each rate applies only to the part of your income inside that bracket.

Federal rates for 2026 (CRA):

Quebec rates for 2026 (Revenu Québec). The CRA’s bracket page refers Quebec residents to Revenu Québec for provincial rates:

These are gross statutory rates, shown for illustration. They don’t reflect credits or deductions. Quebec residents also get a federal abatement that reduces their federal tax, so they do not pay the full federal rates above, and business income can also bring self-employed CPP or QPP contributions. Rates for every other province and territory are on the CRA’s 2026 rates page. Which province’s rates apply depends on where you lived on December 31, 2026.

The flip side matters too. For hobbies, the folio says “neither amounts received nor expenses incurred are included in the income computation” (¶1.1). If your gambling isn’t a business, your winnings aren’t taxed, and you can’t deduct your losses either.

Online, offshore and foreign winnings

Nothing in the CRA’s rule depends on how or where you played. The non-taxable amounts page and the folio don’t distinguish online play from in-person play, or a Canadian operator from a foreign one. The test is still whether your gambling is a business. If it is, the folio notes that the Income Tax Act brings into income “income from all sources inside or outside of Canada” (¶1.1).

Two separate issues are worth keeping apart:

• Legality is not a tax question. Whether a site is allowed to serve your province is governed by the Criminal Code and provincial regulators. Our guide Are offshore gambling sites legal in Canada? covers that, including what you give up on an unregulated site.
• Winning in the US is a separate question. For tax withheld on a win in the United States, see Won in the US? Getting the 30% tax back.

Crypto gambling

If you gamble with cryptocurrency, the win follows the same gambling rules above. The crypto itself is a separate issue. The CRA says crypto “is not government-issued currency”, and that using it to pay for goods or services is “treated as a barter transaction”.

• The CRA’s crypto guidance lists “Gambling” as a type of transaction where you both acquire and dispose of crypto-assets and “need to determine the value of your crypto-assets for tax reporting purposes”.
• It says a disposition happens when you “trade or exchange it for government-issued currency or another type of crypto-asset” or “use it to buy goods or services”.
• Disposing of crypto can produce business income, or a capital gain or loss, depending on your activity.

In practice, if your coins rose in value between buying them and wagering them, or between winning them and cashing them out, that change in value can be taxable even though the win itself is not. We found no CRA worked example for crypto gambling specifically, so how each step is treated can depend on the facts. The CRA says crypto records must be kept “for at least six years from the end of the last taxation year to which the records and books of account relate.”

Prediction markets: what is unsettled

The CRA has not published guidance on prediction markets. The gambling folio doesn’t mention them. We also found no CRA page on event contracts or prediction markets by name.

The open question is which rules apply. A position on the outcome of an election or a game could be treated like a bet, under the folio’s gambling rules. It could instead be treated like a contract you buy and can sell before the event, which the CRA generally analyses as capital gain or business income, the way it does for securities and crypto. The answer may also differ between holding a position to settlement and trading in and out of it. If a market pays out in crypto or stablecoins, the crypto rules above apply to those coins as well.

Until the CRA addresses this, keep a full record of every trade and settlement, and get advice from a tax professional before you file.

What to report and what records to keep

• The win itself: if it isn’t business, employment or property income, the CRA says you don’t have to report it.
• Anything your winnings earn: interest, dividends and capital gains on what you do with the money are reported as usual.
• Crypto: report gains or losses on disposing of the crypto, even where the win isn’t taxable.
• Records to keep (our suggestion, based on what the CRA asks for elsewhere): the operator’s win statement or prize letter, account statements showing deposits and withdrawals, and for crypto, dates, amounts and values in Canadian dollars. Keeping them for six years matches the CRA’s crypto record-keeping rule.

What changed recently

• 2026 federal brackets: the CRA’s 2026 table (page modified June 25, 2026) starts at 14% and reaches 33% on taxable income over $258,482.
• 2026 Quebec brackets: Revenu Québec’s first bracket rose from $53,255 (2025) to $54,345 (2026), still at 14%.
• CRA non-taxable amounts page: last modified September 17, 2026. The page still lists lottery winnings among amounts you do not report.
• The gambling folio itself (S3-F9-C1) was last updated effective July 3, 2020. It replaced the older bulletin IT-213R on prizes from lottery schemes and pool system betting.

If gambling is costing you money

A tax-free win is still a win you may not repeat. If you’re worried about how much you gamble, these services are free and confidential:

Every number above is checked against its official source in our help lines guide, which also covers services for families and debt advice.

You can also self-exclude: How to self-exclude from gambling in Canada sets out each province’s program, and our offshore sites guide lists each province’s legal online option.

This guide explains the Canada Revenue Agency’s and Revenu Québec’s published positions. It is general information, not tax or legal advice. We don’t link to or recommend any gambling site. Last reviewed September 30, 2026.