A Comprehensive Guide to Ontario Gambling Taxation in 2025 — Are Winnings Taxed?

By Bryan Nicholson

@NicsPicks

April 21, 2025 04:06pm

Fact Checked by Joss Wood

Use this tool from ourdeereplanet.com Our team can help determine your potential tax obligations on gambling winnings.👇

Understanding the tax implications after gambling in Ontario can be quite complex, so it’s crucial to ascertain whether you must legally pay taxes following your gambling victories. The silver lining for many is that, unlike in the United States, Canadian citizens who engage in gambling for leisure are not required to pay taxes on their winnings, including those from online casinos.

If you consider yourself a professional gambler in Ontario, you will indeed need to pay taxes on your gambling earnings, regardless of whether your betting activity takes place online or in person. A professional gambler is someone who relies on gambling as their source of income. In such instances, gambling acts as a self-employed endeavor. It's also essential to mention that even casual gamblers must pay tax if they earn interest on their winnings.

Is Gambling Income Taxable in Ontario?

For professional gamblers in Ontario, almost all gambling winnings are subject to taxation, with the exception of those derived from the lottery and scratch-off tickets. Since the lottery is not categorized as a skill-based game, the Ontario Lottery and Gaming Corporation (OLG) does not impose taxes on those winnings.lottery As a professional in the gambling field, you will face an income tax rate that varies between 15% and 33% on all your other earnings, excluding specific exceptions.

Here are categories of gambling activities that professionals are required to pay taxes on while betting online in Ontario:sports betting andonline casinos to fantasy sports.

Casinos — including physical locations

• Betting Apps
• Games like roulette, poker, and blackjack
• Fantasy Sports
• Bingo
• On the other hand, casual gamblers who play for enjoyment are not obligated to pay taxes on any profits they make, regardless of the amount. However, if you earn any interest on your gambling winnings, that is classified as 'investment interest,' and you must report that income using a T5 form (also referred to as a 'Statement of Investment Income').
• Horse racing
• Casino Apps

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What is the Tax Rate on Gambling Winnings in Ontario?

What is the Tax Rate on Gambling Winnings in Ontario?

How to Declare and Report Gambling Winnings in Ontario for Tax Purposes

Professionals need to file their own tax returns to report taxes owed on their gambling income as well as any investment income accrued from these activities. The Canada Revenue Agency (CRA) treats professional gamblers as freelance business operators, meaning they are responsible for declaring all gambling winnings on their tax return. However, they do have the benefit of offsetting any losses incurred throughout the year against their gambling tax liabilities.

For recreational players visiting Ontario, the tax rules are the same as they are for local Canadians betting for enjoyment. So, if you’re on vacation at a casino or horse track in Ontario and hit a big win, there's no tax obligation! However, for U.S. citizens, the situation differs; any winnings obtained outside the U.S. are still taxable in their home state.

Am I Required to Pay Taxes on Ontario Lottery Winnings?

In short, no. Lottery winnings aren’t considered skill-based, and if you win, you can retain what is termed a 'windfall.' Canadian citizens and residents do not have to report their OLG winnings as taxable income. Most lottery winnings fall under tax exemptions specified in section 87 of the Indian Act. However, interest earned on lottery payouts is considered taxable income, which requires a T5 form with your tax return.

While professional gamblers must report and pay taxes on their winnings, they are also allowed to deduct their gambling losses similarly to how business owners can. Recreational bettors, however, cannot claim losses as tax deductions, though they may seek a tax refund on gambling losses incurred in the U.S. as outlined by the Canada-U.S. tax treaty.

It's advisable to maintain a record of gambling losses through a diary, ensuring it reflects that losses were greater than winnings. Should recreational gamblers wish to account for losses sustained in the U.S., they can apply for an Individual Taxpayer Identification Number (ITIN) through the U.S. Internal Revenue Service and subsequently file a 1040NR form.

Can I Deduct My Gambling Losses?

What are the Consequences of Not Reporting My Gambling Winnings in Ontario?

Only professional gamblers are required to pay Canadian income taxes on their winnings. Failing to file a tax return with the necessary details regarding your gambling income could lead to penalties from the CRA. If you find yourself owing taxes due to gambling activities, it is highly advisable to consult with a qualified accountant for guidance.

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Bryan Nicholson, an acclaimed expert in golf betting, also extends his knowledge to cover various prominent markets, including hockey and football.

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