There’s No Skill Involved in Games of Online Chance in Canada
They say there are two certainties in life: “Death and Taxes”. While one has a degree of inevitability about it, providing you are not from south of the border you might just be able to get away with taxes, gambling taxes that is.
Everything is taxed in the USA including hobbies and pastimes such as the newly introduced online gambling now available within States outside of the traditional hotbed which is Las Vegas. The American tax rate is extortionate too (almost 50% in some cases!) and there is no distinction made between games of skill or random luck.
All forms of gambling are categorised the same in America – poker to keno, sports betting to slot play, TV game shows to powerballs. And if you have ever wondered why Americans always take cash as opposed to stunning prizes such as a holiday or sports car, it’s because winners will have to pay almost half of the car or trip’s value to the taxman before being able to enjoy their prize.
Thankfully the Canadian government is not so greedy and not as eager to grab a piece of every dollar of winnings that comes your way. There are some tax laws in Canada surrounding gambling winnings but, generally speaking, we have it good.
Skill-less unless you’re a regular winner
Winning money in a real land-based casino, an online live casino, or online virtual casino matters not to the Canadian Revenue Agency (CRA).
The games of chance they generally offer – such as craps, roulette, slots, blackjack and baccarat – are all considered games of chance and therefore whatever you win is yours to keep tax free. Lottery and scratch cards are also designated ‘chance’ status and so, once again, winnings from these games are exempt from taxation.
Now, there are exceptions… Once a gambling activity provides a player with a sustainable source of regular income tax inspectors declare it constitutes a source of income which is taxable. That is the case for any form of gambling, even sports betting where you may turn a consistent profit from betting on selective favourites such as horse racing. In short, it’s believed if you win regularly, you must be using a skill of some sort.
And whereas most gambling activities come under the umbrella of ‘chance’ live and online poker play is automatically considered a skill game and therefore long-term winnings from poker is subject to taxation by the CRA.