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Canadians are not obligated to pay Income Taxes!!! They are made to believe the contrary!!! Understanding Canada ’s tax laws. The Canadian Income Tax Act rules that casino winnings (online and offline) are not taxable. Canada has the best tax laws in the world, when it comes to recreational gambling. Gambler ’s best friend – who would’ve guessed? Canadian tax law doesn’t treat income from gambling as taxable income but it doesn’t allow deductions for gambling activities. Statistics Canada reports that in , government-run gambling activities generated $ billion dollars in net revenue. It’s important you have a strong hold on the taxation laws in Canada as they apply to gambling winnings and this page is here to bring clarity. Thankfully the gambler is unlikely to be impacted. But we do anticipate the Canadian government will look into ways to tax that C$4 billion and/or bring a.