Are gambling winnings taxable in Canada? The CRA's position and the Leblanc and Cohen cases
Are gambling winnings taxable in Canada?
The CRA says lottery winnings of any amount are not reported or taxed unless they are income from employment, a business or property. The Tax Court held in Leblanc (2006) that over C$5.5 million won on sports lotteries was not business income, and in Cohen (2011) that a lawyer turned poker player could not deduct C$121,991 of losses.
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For most players, no. The Canada Revenue Agency says you do not have to report "lottery winnings of any amount" unless the prize can be considered income from employment, a business or property. The Tax Court has applied that line hard: in Leblanc (2006) two brothers who netted C$5,523,088 on sports lotteries over four years paid no tax on it, because the court found they were gamblers, not a business.
The exception is the professional who runs gambling as a business, and the courts set that bar high in both directions. In Cohen (2011) a lawyer who turned to full-time poker could not deduct C$121,991.43 of losses because the court found it was not a business either. This page reads the CRA's pages and the two judgments. It is not tax advice.
Are gambling winnings taxable in Canada?
Not as a rule. The CRA's page "Amounts that are not reported or taxed", modified 17 September 2026, lists among non-taxable amounts:
lottery winnings of any amount, unless the prize can be considered income from employment, a business or property, or a prize for achievement
The page mentions lottery winnings and does not name casino, poker or sports betting winnings separately. The CRA's detailed position is in Income Tax Folio S3-F9-C1, "Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime". Its address exceeded the fetch tool's URL length limit in two attempts, so the folio's text is not quoted here: not verified. What the courts did with gambling winnings in general is below.
Is interest on winnings taxable?
Yes. The same CRA page says "Income earned on any of the above amounts is taxable" and gives the example: "any interest that you earn when you invest lottery winnings must be reported on your return." A tax-free win becomes a taxable stream the day it starts earning.
What did the court decide in Leblanc?
That even large, systematic gambling was personal, not a business. The case is Leblanc v. The Queen, 2006 TCC 680, decided by Chief Justice Bowman on 21 December 2006. The facts as the judgment records them:
| Leblanc fact | Figure |
|---|---|
| Years | 1996 to 1999 |
| Games | Government sports lotteries: Pro-Line, Point Spread, Over/Under |
| Estimated bets a year | C$10 to C$13 million |
| Share of bets lost, per one brother | About 95% |
| Agreed net winnings, each brother | C$2,761,544 |
| Agreed net winnings, combined | C$5,523,088 |
| Helpers collecting tickets, at one point | Up to 15 |
The Minister had assessed the winnings as business income. The court disagreed. It held that "Betting on games of pure chance, like lotteries, simply lacks the badges of trade" (para. 38), and that volume alone proved nothing (para. 46). Quoting the earlier Balanko case, it said "it is management or minimization of risk which is the characteristic of business activity" (para. 36), and the brothers had done the opposite: "They won in spite of having no system" (para. 42).
they are more accurately described as compulsive gamblers, who are continually trying their luck
The result, at paragraph 49: "their gambling activities were of a personal nature." The winnings were not business income under subsection 9(1) of the Income Tax Act, and the appeals were allowed with costs.
What did the court decide in Cohen?
The mirror image: a loss-making poker player could not call his poker a business. Cohen v. The Queen, 2011 TCC 262, was decided by Justice Pizzitelli on 12 May 2011.
| Cohen fact | Figure |
|---|---|
| Year | 2006 |
| Gambling income reported | C$81,283.30 |
| Expenses claimed | C$203,274 |
| Loss claimed | C$121,991.43 |
| Online hours claimed | About 2,500 across four sites |
| Live games placed in the money | 6 of 45 |
The court applied the two-stage test from Stewart v. Canada, 2002 SCC 46, quoting it: "Does the taxpayer intend to carry on an activity for profit and is there evidence to support that intention?" It said poker "is in my view generally considered a personal activity" (para. 18), and that a business needs "a planned and reasonable expectation of winning more than losing so as to result in a profit at the end of the day" (para. 23). "There must be more than the mere hope or desire of winning."
On the facts it found no profit history, minimal training, and a business plan abandoned after about three months. "The only evidence is that he lost money, consistently throughout the year" (para. 41). The appeal was dismissed and the loss was not deductible.
When are gambling winnings taxed as business income?
When the player runs it as a business, which the two cases show is hard to prove and cuts both ways.
| Question | Leblanc | Cohen |
|---|---|---|
| Who argued it was a business | The Minister | The taxpayer |
| Why | To tax C$5.5 million of winnings | To deduct a C$121,991 loss |
| What the court found | Personal gambling | Personal gambling |
| Effect | Winnings not taxed | Loss not deductible |
The tests the courts used: risk management rather than risk-taking, a system that actually controls outcomes, a profit history, and a reasonable expectation of profit. A player who meets them is taxed on net winnings and may deduct losses and expenses. A player who does not keeps winnings untaxed and losses undeductible. Whether a particular poker or sports bettor crosses the line is fact-specific and for an adviser.
Are crypto casino winnings taxed in Canada?
The winning follows the rules above. The crypto does not. The CRA's crypto-asset guidance says a disposition may occur when you "Trade or exchange it for government-issued currency or another type of crypto-asset", "Use it to buy goods or services", or "Transfer ownership of it by way of gift or donation". Where the transaction is not business income, a gain is a capital gain, and you "must include half of your capital gains (known as taxable capital gains) in your income for the year."
| Step at a crypto casino | Tax point on the CRA texts read |
|---|---|
| Winning the bet | Not taxed for a non-professional, per the CRA page and Leblanc |
| Swapping one coin for another to deposit | A disposition: "another type of crypto-asset" |
| Selling withdrawn coins for dollars | A disposition, half of any gain taxable |
| The deposit itself | Not addressed in the CRA pages read: not verified |
So a player who wins C$10,000 in bitcoin and sells the bitcoin later at a higher price has an untaxed win and a taxable gain on the rise in price. Records of the dollar value at each step are what support both halves.
Separate from tax, the law on whether an offshore crypto casino may serve Canadians is set out in is Stake legal in Canada, and the register's Canada country page shows what 24 operators' terms say about the country.
What this does not show
The CRA folio S3-F9-C1 was not read. Provincial tax is not covered. Winnings won in the US by Canadians and US withholding are not covered. No decision after 2011 was read.
Quick answers
Are gambling winnings taxable in Canada?
Not for most players. The CRA lists "lottery winnings of any amount" as not reported or taxed unless they are income from employment, a business or property.
Do professional gamblers pay tax in Canada?
Only if gambling is a business. In Leblanc, C$5,523,088 of net winnings was held personal and untaxed; in Cohen, a C$121,991 poker loss was held personal and not deductible.
Are poker winnings taxable in Canada?
Usually not. Cohen called poker "generally considered a personal activity", and only a business with a reasonable expectation of profit is taxed.
Is crypto won at a casino taxed in Canada?
The win is not taxed for a non-professional. Selling or swapping the crypto later is a disposition, with half of any gain taxable. See the Canada country page.
Where can I get help with gambling in Canada?
ConnexOntario answers 24/7 on 1-866-531-2600 and covers problem gambling. Gambling Therapy offers free international support at gamblingtherapy.org. More options are on the responsible gambling page.
Sources
- Canada Revenue Agency, Amounts that are not reported or taxed, modified 17 September 2026, retrieved 9 October 2026
- Canada Revenue Agency, Income Tax Folio S3-F9-C1, Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime, could not be read
- Leblanc v. The Queen, 2006 TCC 680, Tax Court of Canada, 21 December 2006, retrieved 9 October 2026
- Cohen v. The Queen, 2011 TCC 262, Tax Court of Canada, 12 May 2011, retrieved 9 October 2026
- Canada Revenue Agency, Reporting income from crypto-asset transactions, modified 3 December 2025, retrieved 9 October 2026
- CryptoGuardz Canada country page, restricted-territory terms of 24 operators, retrieved 2 October 2026
- ConnexOntario, retrieved 9 October 2026
- Gambling Therapy
About this piece
Compiled by the CryptoGuardz register team from the sources listed above. Research and drafting are AI-assisted and reviewed by a named editor before publication. Nothing here is a recommendation to gamble. If a figure or a reading is wrong, tell us and the correction is logged in public.