Tax on casino winnings
Do you owe tax on a win, and will anything be taken at the cashier? It depends on where you live and where you played. Tap next to any statement to read the official text behind it.
General information, not tax advice. It covers federal income tax in Canada and the United States; provincial and state rules are not covered. For your own situation, ask the Canada Revenue Agency, the IRS or a tax professional.
Every statement was checked against the official source on .
At a glance
Canadian residents playing in Canada
For the Canada Revenue Agency, gambling produces taxable income, or a business loss, when it amounts to a business.
Playing for fun, even often, generally does not. The CRA quotes the Tax Court of Canada:
Gambling - even regular, frequent and systematic gambling - is something that by its nature is not generally regarded as a commercial activity except under very exceptional circumstances.
Leblanc v. The Queen, 2006 TCC 680, quoted in CRA Income Tax Folio S3-F9-C1, paragraph 1.13.
The exceptions are rare. The CRA says they involve people who applied inside information, knowledge and skill — its example is a sober pool player who challenged drunk opponents and was taxed on his winnings.
What makes gambling a business
It is decided on the facts of each case. The CRA looks at:
- how organized the activity is;
- whether special knowledge or inside information reduces the element of chance;
- whether you play for pleasure or to make a living;
- how much you gamble, including the number and frequency of bets.
What a win earns later
Income from money you won is a separate matter. The CRA’s own example: interest earned on invested lottery winnings must be reported.
Canadian residents winning at a US casino
At the casino
The United States generally withholds 30% of a non-resident’s gambling winnings, taken from the gross amount.
Blackjack, baccarat, craps, roulette and big-6 wheel are the exception: the US does not tax a non-resident’s winnings from these games unless gambling is their business.
Canada is not on the IRS list of treaty countries whose residents’ gambling income the US does not tax.
The win and the tax withheld are reported on Form 1042-S. Keep your copy: to claim the tax back, you attach it to your US return.
What the tax treaty changes
Under the Canada–US tax treaty, a resident of Canada can deduct US gambling losses against US gambling winnings in the same way a US resident can.
Other visitors generally cannot: the IRS says non-residents who are not residents of Canada generally can’t deduct gambling losses.
The treaty does not stop the withholding at the casino. You claim the deduction afterwards, on a US non-resident return, and get back tax that was overpaid.
How to claim
- Keep a record of wins and losses as you play: a diary, plus receipts, tickets or statements.
- You may need an ITIN, the 9-digit IRS number for people who need a US tax number but cannot get a Social Security number. The IRS lists non-residents who file a US return or claim a treaty benefit.
- File Form 1040-NR with Schedule NEC. On Schedule NEC, residents of Canada enter winnings on line 10a, leaving out blackjack, baccarat, craps, roulette and big-6 wheel, and losses on line 10b. US losses are deductible up to US winnings; a net loss is not deductible. Attach your copy of Form 1042-S to claim back the tax withheld.
- Applying for an ITIN for the first time? Attach Form W-7 to the front of your 1040-NR and send them together by the due date.
- Deadline: if you had no US wages with tax withheld, the return is due by the 15th day of the 6th month after the tax year ends. For the 2025 tax year, that was June 15, 2026.
The treaty measures your deduction by the rules for US residents, and those rules change from 2026: see new for 2026 below. Check the Form 1040-NR instructions for the year of your win.
For your Canadian return, start from the CRA test above, and ask the CRA if you are unsure.
US citizens and residents winning in Canada
US tax follows you abroad: citizens and resident aliens are taxed on worldwide income.
The IRS treats gambling winnings as fully taxable, and names casinos among the sources.
Report every win, including winnings that no Form W-2G was issued for.
Amounts go on your return in US dollars, converted at the exchange rate when you received them.
Losses are deductible only if you itemize on Schedule A and kept a record, and never more than the winnings you report.
New for 2026: only 90% of losses
From tax year 2026, the loss deduction on Schedule A is limited to the lesser of 90% of your gambling losses or your gambling winnings.
The change comes from the One, Big, Beautiful Bill Act of July 4, 2025, which amended section 165(d) of the Internal Revenue Code.
Example. You itemize, and in 2026 you won US$5,000 and lost US$5,000. At most US$4,500 of the losses can be deducted, so US$500 of winnings stays taxable although you broke even.
Does the Canadian casino take anything?
We have not found an official statement, from the CRA or from a casino operator, on whether a casino in Canada withholds tax from a visitor’s win. Ask the cashier when you are paid and keep whatever paperwork you are given. The IRS expects the win to be reported either way.
If gambling stops being fun
If gambling stops being entertainment, help is available.
Help and responsible gaming by provinceSelf-exclusionSet a budget and a time limit before you go
- OntarioConnexOntario1-866-531-260024 hours
- QuebecJeu: aide et référence1-800-461-014024 hours
- British ColumbiaGambling Support BC1-888-795-611124 hours
- AlbertaAddiction Helpline (Recovery Alberta)1-866-332-232224 hours
- ManitobaProblem Gambling Helpline1-800-463-155424 hours
- SaskatchewanProblem Gambling Help Line1-800-306-678924 hours
- Nova ScotiaMental Health and Addictions Crisis Line1-888-429-816724 hours
- New BrunswickGambling Information Line1-800-461-1234
- Prince Edward IslandPEI Gambling Support Line1-855-255-425524 hours
- Newfoundland and LabradorGambling Help Line81124 hours
- YukonReach Out Support Line (CMHA Yukon)1-844-533-3030
Sources
Read on . Dates in brackets are the ones each page gives for itself.
- Income Tax Folio S3-F9-C1, Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from CrimeCanada Revenue Agency (2020-07-03)
- Amounts that are not reported or taxedCanada Revenue Agency (2026-09-17)
- Publication 515 (2026), Withholding of Tax on Nonresident Aliens and Foreign EntitiesInternal Revenue Service (2026-04-30)
- Convention of 1980 as amended, Article XXII (Other Income), paragraph 3 — added by Article 11 of the Protocol of 17 March 1995 (IRS copy)Canada–United States Income Tax Convention
- Technical Explanation of the Canada–US Convention and its Protocols, Protocol 3 (1995), Article 11US Treasury Department
- Publication 597, Information on the United States–Canada Income Tax Treaty (Rev. October 2015)Internal Revenue Service (2015-10)
- Topic no. 419, Gambling income and lossesInternal Revenue Service (2026-06-11)
- Instructions for Form 1040-NR (2025)Internal Revenue Service (2026-04-30)
- Individual Taxpayer Identification Number (ITIN)Internal Revenue Service (2025-10-28)
- Instructions for Form W-7 (12/2024), When To ApplyInternal Revenue Service (2026-08-24)
- U.S. citizens and resident aliens abroadInternal Revenue Service (2026-07-09)
- Foreign currency and currency exchange ratesInternal Revenue Service (2026-05-22)
- Publication 505 (2026), Tax Withholding and Estimated TaxInternal Revenue Service (2026-04-30)
- Internal Revenue Bulletin 2026-19, REG-113229-25 (proposed regulations on wagering losses)Internal Revenue Service (2026-05-01)
Gambling is taxable as a business
An individual’s gambling activities may result in taxable business income or a business loss. This will be the case if the gambling activities constitute a source of income (that is, carrying on the business of gambling).
CRA Income Tax Folio S3-F9-C1 · page dated · read
Regular gambling is not a business
Gambling - even regular, frequent and systematic gambling - is something that by its nature is not generally regarded as a commercial activity except under very exceptional circumstances.
CRA Income Tax Folio S3-F9-C1 · page dated · read
Exceptional cases
There are some exceptional cases, which are noted in Leblanc, where gambling activities have been held to be taxable. … these cases relate to taxpayers who applied inside information, knowledge and skill to their activities. … a pool player who in cold sobriety would challenge inebriated pool players to a game of pool was held to be taxable on his winnings.
CRA Income Tax Folio S3-F9-C1 · page dated · read
What the CRA looks at
The issue of whether a taxpayer’s activities are such that he or she can be considered to be carrying on a gambling business is a question of fact … the degree of organization that is present in the pursuit of this activity by the taxpayer … the existence of special knowledge or inside information that enables the taxpayer to reduce the element of chance … the taxpayer’s intention to gamble for pleasure as compared with any intention to gamble for profit as a means of gaining a livelihood … the extent of the taxpayer’s gambling activities, including the number and frequency of bets
CRA Income Tax Folio S3-F9-C1 · page dated · read
Interest on winnings
For example, any interest that you earn when you invest lottery winnings must be reported on your return.
CRA: amounts that are not reported or taxed · page dated · read
30% US withholding
In general, nonresident aliens are subject to chapter 3 withholding at 30% on the gross proceeds from gambling won in the United States if that income is not effectively connected with a U.S. trade or business and is not exempted by treaty.
IRS Publication 515 (2026) · page dated · read
Table games exempt
No tax is imposed on nonbusiness gambling income a nonresident alien wins playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States.
IRS Publication 515 (2026) · page dated · read
Treaty countries with exempt winnings
Gambling income of residents (as defined by treaty) of the following foreign countries is not taxable by the United States: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom.
IRS Publication 515 (2026) · page dated · read
Form 1042-S
The tax withheld and winnings are reportable on Forms 1042 and 1042-S.
IRS Publication 515 (2026) · page dated · read
If you are claiming a refund of U.S. tax withheld at source under chapter 3 or tax withheld under chapter 4, you must attach a copy of the Form 1042-S that shows the income and the amount of U.S. tax withheld.
IRS Instructions for Form 1040-NR (2025) · page dated · read
Treaty deduction of losses
Losses incurred by a resident of a Contracting State with respect to wagering transactions the gains on which may be taxed in the other Contracting State shall, for the purpose of taxation in that other State, be deductible to the same extent that such losses would be deductible if they were incurred by a resident of that other State.
Canada–US tax treaty, Article XXII(3) · read
Canadian residents may deduct gambling losses in the U.S. against gambling winnings in the U.S. in the same manner as a U.S. resident.
IRS Publication 597 · page dated · read
Other non-residents
Generally, nonresident aliens of the United States who aren't residents of Canada can't deduct gambling losses.
IRS Topic no. 419 · page dated · read
Withholding stays, refund by return
This Article does not affect the collection of tax by a Contracting State.
Treasury Technical Explanation, 1995 Protocol · read
It is intended that the resident of Canada file a nonresident income tax return in order to substantiate the deduction for losses and to claim a refund of any overpayment of U.S. taxes collected by withholding.
Records
To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.
IRS Topic no. 419 · page dated · read
ITIN
An ITIN is a 9-digit number the IRS issues if you need a U.S. taxpayer identification number for federal tax purposes, but you aren’t eligible for a Social Security number (SSN).
IRS: Individual Taxpayer Identification Number · page dated · read
You may need an ITIN if you’re a: … Nonresident alien claiming a tax treaty benefit … Nonresident alien filing a U.S. federal tax return
IRS: Individual Taxpayer Identification Number · page dated · read
Form 1040-NR for residents of Canada
If you're a nonresident alien of the United States for income tax purposes and you have to file a tax return for U.S. source gambling winnings, you must use Form 1040-NR, U.S. Nonresident Alien Income Tax Return along with Schedule NEC (Form 1040-NR)
IRS Topic no. 419 · page dated · read
If you’re a resident of Canada who isn’t engaged in the trade or business of gambling, enter all gambling winnings on line 10a. … Do not include winnings from blackjack, baccarat, craps, roulette, or big-6 wheel. You can deduct your U.S. source gambling losses to the extent of your U.S. source gambling winnings. Enter your gambling losses on line 10b. … A net loss from gambling activities is not deductible.
IRS Instructions for Form 1040-NR (2025) · page dated · read
If you are claiming a refund of U.S. tax withheld at source under chapter 3 or tax withheld under chapter 4, you must attach a copy of the Form 1042-S that shows the income and the amount of U.S. tax withheld.
IRS Instructions for Form 1040-NR (2025) · page dated · read
W-7 with the return
If you’re applying for a new ITIN, complete and attach Form W-7 to the front of your tax return and file your application package with your tax return for which the ITIN is needed on or before the due date for the return.
IRS Instructions for Form W-7 · page dated · read
1040-NR deadline
If you didn’t receive wages as an employee subject to U.S. income tax withholding, file Form 1040-NR by the 15th day of the 6th month after your tax year ends. A return for the 2025 calendar year is due by June 15, 2026.
IRS Instructions for Form 1040-NR (2025) · page dated · read
Treaty follows US rules on losses
Losses incurred by a resident of a Contracting State with respect to wagering transactions the gains on which may be taxed in the other Contracting State shall, for the purpose of taxation in that other State, be deductible to the same extent that such losses would be deductible if they were incurred by a resident of that other State.
Canada–US tax treaty, Article XXII(3) · read
Under U.S. domestic law, the deduction of wagering losses is governed by section 165 of the Internal Revenue Code.
Treasury Technical Explanation, 1995 Protocol · read
Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA) … OBBBA section 70114(a) amended section 165(d) to limit this deduction to 90 percent of the amount of wagering losses during a taxable year and only to the extent of gains from wagering transactions during a taxable year.
Internal Revenue Bulletin 2026-19 · page dated · read
Worldwide income
If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. … You are subject to tax on worldwide income from all sources and must report all taxable income and pay taxes according to the Internal Revenue Code.
IRS: U.S. citizens and resident aliens abroad · page dated · read
Winnings are taxable
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, sports betting, horse races, and casinos.
IRS Topic no. 419 · page dated · read
Report all winnings
You must report all gambling winnings on Form 1040 or Form 1040-SR … including winnings that aren't reported on a Form W-2G
IRS Topic no. 419 · page dated · read
US dollars
You must express the amounts you report on your U.S. tax return in U.S. dollars. … Use the exchange rate prevailing when you receive, pay, or accrue the item.
IRS: foreign currency and exchange rates · page dated · read
Deducting losses
You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. … The amount of losses you deduct can't be more than the amount of gambling income you reported on your return.
IRS Topic no. 419 · page dated · read
2026 limit on losses
Beginning in 2026, your gambling loss deduction on Schedule A (Form 1040) will be limited to lesser of (1) 90% of your gambling losses or (2) your gambling winnings.
IRS Publication 505 (2026) · page dated · read
Source of the change
Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA) … OBBBA section 70114(a) amended section 165(d) to limit this deduction to 90 percent of the amount of wagering losses during a taxable year and only to the extent of gains from wagering transactions during a taxable year.
Internal Revenue Bulletin 2026-19 · page dated · read
Report all winnings
You must report all gambling winnings on Form 1040 or Form 1040-SR … including winnings that aren't reported on a Form W-2G
IRS Topic no. 419 · page dated · read
ConnexOntario: hours
offers free and confidential, 24/7 support to adults experiencing problem gambling
connexontario.ca · checked
ConnexOntario, Ontario
If you or someone you know is struggling with gambling, call ConnexOntario at 1-866-531-2600
agco.ca · checked
Jeu: aide et référence, Quebec
By phone 24 hours / 7 days Montreal and surroundings : 514 527-0140 Everywhere in Quebec : 1 800 461-0140
aidejeu.ca · checked
Gambling Support BC, British Columbia
Call us toll-free 24/7 at 1-888-795-6111
www2.gov.bc.ca · checked
Addiction Helpline (Recovery Alberta), Alberta
Addiction helpline 24-hour 7 days a week and confidential 1-866-332-2322 (Toll-free)
recoveryalberta.ca · checked
Problem Gambling Helpline, Manitoba
Problem Gambling Helpline 24 hours, in Manitoba 1-800-463-1554
gov.mb.ca · checked
Problem Gambling Help Line, Saskatchewan
Problem Gambling Help Line 1-800-306-6789 The Problem Gambling Help Line provides free 24-hour help to people with gambling problems and their families.
saskatchewan.ca · checked
Mental Health and Addictions Crisis Line, Nova Scotia
The Crisis line is free, confidential, and available 24 hours a day, seven days a week. Call (toll-free) 1-888-429-8167
gamingns.ca · checked
Gambling Information Line, New Brunswick
Gambling Info Line : 1-800-461-1234
horizonnb.ca · checked
PEI Gambling Support Line, Prince Edward Island
PEI Gambling Support Line 1-855-255-4255 … Free & confidential · Available 24 hours a day, 7 days a week
peigamblingsupport.princeedwardisland.ca · checked
Gambling Help Line, Newfoundland and Labrador
Gambling Help Line 811 The Gambling Help Line is a free, confidential service available province-wide, 24 hours a day.
gov.nl.ca · checked
Reach Out Support Line (CMHA Yukon), Yukon
Reach Out Support (2:00PM-10:00PM): Call 1-(844) 533-3030
lotteriesyukon.com · checked
9-8-8: Suicide Crisis Helpline
24/7/365 Crisis Support Call 9-8-8 Text 9-8-8 You deserve to be heard. We’re here to listen. A safe space to talk, 24 hours a day, every day of the year.
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