If you score big from a Canadian casino, your winnings will be treated the same as other lotteries and usually remain tax-free. However, over the past few years, the CRA has begun looking for professional gamblers, classifying their “winnings” as business income and therefore taxable like any other business income.
However, do you have to declare gambling winnings in Canada?
Are Canadians required to pay any taxes on gambling winnings? No, there is no need for Canadians to pay any taxes on winnings from gambling activities like lotteries, sports betting, horse racing, online casinos etc. however, you must declare any interest earned on these winnings in the T5 form.
In any event, do you have to claim gambling winnings on your taxes? “Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes, but isn't limited to, winnings from lotteries, raffles, horse races and casinos. ... The vast majority of gamblers lose, so any additional government revenue from taxing winnings would be insignificant.
No matter, are gambling losses tax deductible in Canada?
In order to avoid cases, in which players deduct gambling losses in Canada as “business expenses”, the Canada Revenue Agency does not impose taxes on casino winnings, but also gambling losses are not deductible.
How much tax is deducted from lottery winnings in Canada?
According to the Canada Revenue Agency's windfall rules, if you win money from a lottery, you do not have to report the winnings nor pay tax on those funds. The CRA has not instituted a cap or limit on these winnings. However, if your winnings earn interest, the interest amounts will be subject to taxation.