In Canada, gambling winnings are generally not taxable for casual players. The Canada Revenue Agency (CRA) treats these earnings as windfalls; that’s why they are exempted. However, Canadian gambling tax on crypto gambling is more complex since the CRA classifies cryptocurrency as a commodity.
Recent developments have complicated the tax landscape even further. For instance, in 2024, the Canadian government announced plans to increase the capital gains inclusion rate from 50% to 67% for gains exceeding $250,000 annually, set to take effect in 2026.
Starting in 2026, all crypto asset service providers (CASPs) will be required to report transactions between crypto and fiat currencies, as well as crypto-to-crypto transactions, to the CRA. These reports will include customer information, including names, addresses, and dates of birth.
Let’s break down what these changes mean for Canadian gamblers and how they experience crypto gaming taxation going forward.
Taxation of Traditional Fiat Gambling Winnings
Like in many countries, the tax treatment of gambling winnings in CA depends on whether the activity is considered a hobby or a business. For most individuals, gambling is viewed as a personal endeavor, and any winnings are exempt from taxation. The CRA does not require casual gamblers to report these earnings as income.
However, if gambling is conducted systematically and as a primary source of income, the CRA may classify it as a business. In such cases, winnings are considered business income and are fully subject to Canadian gambling tax Professional gamblers can also deduct gambling-related expenses, such as travel costs and training fees, from their taxable income.
The CRA looks at different factors to determine whether an individual’s gambling activities are for fun or considered a business. The main things include the frequency of gambling, the use of skill or strategy to earn profits, and the reliance on gambling as a primary income source.
For example, an online slot player who wins often and treats gambling as a full-time job may be tagged as a professional gambler. He will then be subject to Canadian gambling tax as a business. In all, what the CRA gathers from their data based on these activities has tax implications.
Therefore, individuals engaged in gambling activities should maintain detailed records and consult with a tax professional to understand their obligations fully.
Canadian Crypto Gambling Tax on Winnings
The Canadian government only recognizes the Canadian dollar and other fiat currencies as legal tender. That means using cryptocurrency for transactions, including gambling, is considered a barter transaction.
Gambling casually with crypto thus subjects players to taxation and if the cryptocurrency used for gambling has appreciated in value since acquisition, using it may trigger a capital gain. Also, any increase in the cryptocurrency’s value from the time of winning to the time of disposition could mean a taxable capital gain.
On the other hand, professional crypto gamblers are subject to different tax considerations. In such scenarios, winnings are treated as business income and are fully taxable. The main thing here is that the CRA’s classification can have significant Canadian crypto gambling tax implications.
Recent Tax Developments in 2025
As 2025 began, Canada announced significant tax changes affecting capital gains and cryptocurrency transactions. However, the government deferred the planned increase in the capital gains inclusion rate to January 1, 2026.
The main reason for the proposal was to raise the taxable portion of capital gains from 50% to 66.7% for individuals with gains exceeding $250,000 annually. If they stuck with that, the adjustment was to generate more revenue for initiatives like affordable housing.
As for cryptocurrency, the country is looking to adopt the OECD’s Crypto-Asset Reporting Framework by 2027. This framework will make it compulsory for crypto-asset service providers to report detailed transaction and customer information to the Canada Revenue Agency to enhance tax transparency and compliance.
These developments show how quickly the tax landscape in Canada is changing, particularly concerning capital gains and cryptocurrency transactions.
Key Canadian Gambling Tax Considerations for Gamblers
With every crypto gambling activity in Canada from 2025, players need to be deliberate about keeping data. The Canada Revenue Agency requires individuals to have detailed records of all gambling activities, including dates, amounts wagered, winnings, and losses. Also, for cryptocurrency transactions, the value in Canadian dollars at the time of each transaction needs to be noted.
This is a very meticulous record-keeping process, but it supports accurate reporting of income and capital gains or losses. For cryptocurrency transactions, it’s crucial to determine the fair market value in Canadian dollars at the time of each transaction. For currencies like Tether that are stable, this should be easy. It then means more volatile currencies like bitcoin may be less appealing for gambling activities because of their volatility.
Whichever option players choose, this valuation is necessary for calculating potential capital gains or losses.
All taxable income, including that from gambling activities, must be reported on your income tax return. Failure to do so can result in penalties and interest. The CRA can track cryptocurrency transactions, as exchanges are required to report transactions exceeding $10,000.
For professional gamblers, whether engaging in fiat or cryptocurrency gambling, the CRA may view the activity as a business if it’s conducted systematically and as a primary income source. In such scenarios, winnings are treated as business income and are fully taxable.
Conclusion
Although winnings from casual casino gaming in fiat money are still tax-free in Canada, using cryptocurrencies adds complications that may result in taxable situations. To guarantee adherence to CRA rules, both amateur and professional gamblers should be aware of their tax responsibilities and keep accurate records