Sports betting has gained massive popularity across Ontario since it was legalized and regulated. However, with growth in the industry, government regulations—particularly tax policies—have evolved to ensure fairness, accountability, and public revenue generation. In 2025, several changes to sports betting taxes have been introduced in Ontario, directly impacting bettors and operators alike.

This blog will explore these tax changes and explain how they affect the average bettor.

Understanding Ontario’s Sports Betting Landscape

Ontario became one of the leading markets for regulated sports betting in Canada after launching its online gaming framework in 2022. With major sportsbooks operating legally in the province, Ontario quickly established itself as a hub for both casual and professional bettors.

However, with the industry’s rapid expansion, the provincial government has sought to update tax policies to:

• Ensure tax revenue from the sector supports public programs.
• Prevent illegal or unregulated betting.
• Maintain fair competition among sportsbooks and casinos.

The tax changes in 2025 reflect these priorities while adding new implications for bettors.

What Are the Tax Changes for 2025?

The new tax regulations introduced in 2025 cover both sportsbooks and bettors. Here’s a breakdown of the key changes:

1. Increased Tax Rates for Sportsbook Operators

Ontario’s government has raised the tax rate for licensed sports betting operators from 20% to 22.5% of gross gaming revenue (GGR). This change aims to increase public funds without discouraging operators from continuing to invest in the local market.

2. Tax Reporting Requirements for Bettors

One of the most significant changes affecting bettors is stricter reporting requirements for large winnings. Previously, most casual bettors were exempt from reporting their gambling income unless they earned substantial amounts through professional betting or wagering.

As of 2025, Ontario’s tax regulations require individuals to report winnings over $10,000 in a calendar year to the Canada Revenue Agency (CRA). This includes all forms of winnings, whether obtained through online sports betting platforms, in-person sportsbooks, or casinos.

How Do the Changes Affect Bettors?

The new tax policies are designed to target high-stakes bettors and professional gamblers, but they also have implications for casual bettors. Below are several ways these changes may affect online betting in Ontario.

1. Higher Compliance and Reporting Obligations

If you win more than $10,000 through sports betting in Ontario, you are now required to report these earnings to the CRA. This includes keeping detailed records of your bets, winnings, and losses. Bettors who fail to comply may face penalties, including fines or additional audits.

What You Should Do:

• Keep records of every wager you place, including the date, amount, and outcome.
• Track both winnings and losses, as losses can potentially offset taxable income.
• Consider consulting a tax professional if you are a frequent bettor or expect large winnings.

2. Possible Tax Deductions on Losses (for Professional Bettors)

Professional bettors can deduct their gambling losses from their winnings when calculating taxable income. However, this does not typically apply to casual bettors who gamble sporadically. For those who meet the criteria for professional gambling, this change could reduce the overall tax burden.

Key Point:
To qualify for loss deductions, you must demonstrate that betting is a consistent, organized activity with an expectation of profit. Casual hobby bettors do not qualify for these deductions.

3. Impact on Betting Odds and Promotions

With higher tax rates for operators, some sportsbooks may adjust their odds, payout percentages, or promotional offers to offset their tax obligations. While this change may be subtle, bettors could notice slightly lower returns on certain bets compared to previous years.

How to Adapt:

• Compare odds across multiple sportsbooks to find the best value for your wagers.
• Take advantage of time-sensitive promotions and bonus offers while they last.
• Focus on long-term betting strategies to maximize returns despite small shifts in odds.

4. Potential Shift Toward Offshore Betting Sites

In response to stricter regulations, some bettors may be tempted to use offshore or unlicensed betting sites that do not comply with Ontario’s tax laws. However, this comes with risks, including a lack of consumer protection, limited recourse for disputes, and potential legal issues.

The Ontario government has increased efforts to crack down on illegal betting operations, making it riskier to engage with unregulated platforms.

Why Stay with Licensed Platforms:

• Licensed sportsbooks provide secure payment options, fair play guarantees, and responsible gambling tools.
• Your deposits and winnings are protected under provincial regulations.
• Legal platforms comply with responsible gaming standards to help bettors manage their wagering habits.

Are There Any Tax Benefits for Bettors?

While the updated tax policies increase obligations for high-stakes bettors, there are still ways to manage your tax burden effectively:

1. Use Losses to Offset Winnings

Even if you are not considered a professional gambler, keeping a record of your losses can be beneficial. If you experience significant gambling losses, they may not be tax-deductible for most bettors, but documentation can support your tax filings and prevent disputes.

2. Utilize Responsible Gaming Features

Many licensed sportsbooks offer tools to help bettors set limits on deposits, wagers, and losses. These tools can help you control your spending, reduce impulsive betting, and ultimately improve your long-term success rate.

Conclusion

The tax changes introduced in 2025 are a significant step in Ontario’s efforts to regulate and benefit from its thriving sports betting market. While these updates may increase compliance requirements and affect betting strategies, they also aim to create a more secure and responsible gambling environment.

For bettors, the key to navigating these changes is staying informed. By understanding the new tax rules, tracking your bets and winnings, and using licensed platforms, you can continue to enjoy sports betting in Ontario while minimizing any negative tax-related surprises.