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All you need to know about gambling winnings tax in Toronto

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Online gambling has been a prominent source of entertainment all over the world. As one of the largest countries in the world, Canada surely falls into the paradigm. When there is the question of real money income, the question of income tax comes in naturally.

If you’re a resident of Toronto and wondering whether your gambling winnings are taxable or not, you’re exactly where you should be. In this post, we’re going to discuss things to know about paying taxes in Toronto. But not before we discuss the basics of Canadian gambling rules.

Is gambling legal in Canada?

Sports betting was the primary form of gambling in Canada. It was legalized way back in 1985 when online gambling was not a thing. A few years later, land-based casinos started to pop in here and there.

But when the major gambling industry development took place and online casinos became prominent, Canada’s gambling scene remained unregulated. For the longest time, the Kahnawake Gambling Commission has played the role of an independent regulator in the country. Interestingly, the federal government of Canada never recognized KGC as a valid authority to regulate gambling.

Rather, it’s the provincial governments that have control over gambling establishments. As the capital city of Ontario, Toronto comes under the jurisdiction of the Ontario Alcohol and Gambling Commission. If you’re not aware, the Canada house of representatives has very recently passed the C-218 bill. It gave power to the provinces to regulate the online gambling industry. It has also legalized single-game wagering.

If you’re not aware, single-game wagering means betting on a single game from any sports tournament. Before, it was illegal to protect the players and the teams from any match-fixing attempts. But it’s very much possible now.

As it seems, all types of online gambling activities are now legal in Canada, giving you the ultimate opportunity to become a part of the world’s economy by playing! This is one of the many reasons players should think about taxation. Please take our congratulations on doing that. Interestingly, Ontario is one of the early adopters of the C-218 bill, and it has already permitted more than 9 offshore operators to offer gambling services to the residents as of April 2022. It means you have way more options than the provincial lottery website in Ontario.

How are gambling taxes calculated in Canada?

Well, as the gambling facilities, both online and offline, are regulated by the provincial governments, there are quite some discrepancies between the laws. For example, some provinces require you to be 21 for real money gambling, while others may let you do it when you’re 19.

So, it’s normal for players to think that the casino winning taxes might follow the same theory in Canada. But that’s not the case. The reality is that all kinds of gambling winnings are tax-free across the country.

However, the paradigm is not so simple. If it were, our endeavor on income taxes would end right here.

According to Canadian law, income that comes from an office job, employment, business, property, and other sources is subject to taxation. We know what you’re thinking. What in the world are “other things”, right? Although it’s a very vague categorization, most lawyers agree that major gifts, inheritance, lottery winnings, etc., fall under this category.

So, when you think about gambling winnings, it’s generally non-taxable. But if the winnings look like it’s a business for you or if you’re a professional gambler in the eye of the CRA, then it becomes taxable.

We know that paradigm is very confusing, especially when it comes to poker winnings. Blackjack and Roulette too. When you play these games in a casino en ligne Canada légal, you have more control over the variables. You can use your skills to substantially increase your likelihood of winning while gambling in Canada. So, in these cases, your income may become taxable if the Canada Revenue Agency marks you as a professional gambler. Thankfully, there are no cases of forceful taxation on gambling winners. Because the authority does it, it can very well create a negative impact on the world economies because gambling is now a major source of revenue for the provincial governments.

What does it mean for you in Toronto?

So, what does everything mean when put together? Do you need to pay taxes on your gambling winnings in Toronto?

The simple answer is no. You don’t have to pay any taxes. But in case you win a major amount from poker or blackjack games, it’s not far-fetched that the Canada Revenue Agency may visit your humble abode.

There’s no need to worry. If you can prove that you’re not a professional gambler and what you won was just a one-off thing, there’s no need for taxes. All Canadian tax lawyers agree that any successful venture is not so easily considered a business. And vice versa. So, even if you win consistently, it’s very unlikely that you’ll need to pay taxes.

Even if the CRA imposes payroll taxes on the winnings, it shouldn’t go over 15% in any case. The gambling laws might be different across the provinces, but the tax law works in the same way for all of the provinces.

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