Ontario Sports Betting Tax: What It Means For The Province, Sportsbooks, And Customers

GamingToday.com is an independent sports news and information service. GamingToday.com has partnerships with some of the top legal and licensed sportsbook companies in the US. When you claim a bonus offer or promotion through a link on this site, Gaming Today may receive referral compensation from the sportsbook company. Although the relationships we have with sportsbook companies may influence the order in which we place companies on the site, all reviews, recommendations, and opinions are wholly our own. They are the recommendations from our authors and contributors who are avid sports fans themselves.

For more information, please read How We Rank Sportsbooks, Privacy Policy, or Contact Us with any concerns you may have.

Gaming Today is licensed and regulated to operate in AZ, CO, CT, IN, LA, MI, NJ, NY, PA, TN, and VA.

Ontario sports bettors can celebrate like the Maple Leafs with no taxes on their winnings. (AP Photo/Charles Krupa)

In Ontario’s open and expanded sports betting market, licensed sportsbooks face a manageable 20% tax rate as operators in the province. That’s nowhere near the draconian 51% tax that New York imposes on its legal operators.

Ontario is expected to be the largest betting market in Canada. A study by Vixio, which helps clients navigate global gaming and payment regulations, estimated gross gaming revenue (GGR) of C$989 million for Ontario sports betting in its first year of operation, translating to tax revenue of C$197.8 million for the province.

Per a report from Eilers & Krejcik, Ontario online sportsbooks will pull GGR of C$570 million in 2022 and C$904 million in 2026, resulting in tax revenues for the province of C$114 million and C$180.8 million in those respective years.

In 2021, New Jersey sportsbooks wrote $10.9 billion in sports betting handle, establishing a new annual record in the U.S., and held $815.8 million in GGR. New Jersey became the first state to surpass the $10 billion threshold in a calendar year.

Pennsylvania’s sportsbooks generated $340 million in sports wagering revenue last year on handle of $6.55 billion.

It’s still early days for New York, which launched its sports betting market in January. But bettors in the Empire State wagered $4.6B from January 8, the date of launch, through March 27, with sportsbooks holding $314.6 of that handle. New York is already the largest sports betting state in the U.S. in terms of monthly handle.

Ontario’s effective tax rate is moderate, and bettors should have no concern about increased vigorish and larger hold percentages at sportsbooks like BetMGM Canada, BetRivers Ontario, and PointsBet Ontario.

Even better news for sports bettors in all of Canada? They don’t have to pay taxes on their winnings, only on any interest that is accrued on them during the year. This is a major departure from U.S. tax laws.

What Does No Taxation Mean For Ontario Sports Bettors?

Let’s compare how bettors fare on a big win in Ontario compared to New York. Hypothetically, let’s say Torontonian Claude hits a five-team parlay in the NHL that pays $5,100. His former college roommate, Dennis, lives in New York City and hits a $5,100 winner of his own on a straight bet. The two friends connect by phone to celebrate their good fortune.

Claude expresses how great it is to live in Canada. As a recreational sports bettor, he won’t have to pay taxes on his recent windfall. Dennis becomes a bit downtrodden when he realizes that the IRS already withheld 24% ($1,224) when he was forced to complete the W-2G form (required on wins of more than $5,000) at the sportsbook.

What’s more is that New York state will tax Dennis between 4%-10.9% based on his annual income. At 5%, that chips away another $255. Dennis ends up netting only $3,621 on his bet (and just 71% of Claude’s full payout).

Project this out over the course of a year, and it becomes obvious just how much the cost of doing business in NY as a sports bettor is relative to Toronto. In addition to having top-flight sportsbooks such as BetMGM, BetRivers, and PointsBet, Ontario sports bettors have a player-friendly system to profit from.

Ontario Sports Betting Apps: How To Register

With regulated single-game sports betting available in Ontario as of April 4, these sportsbook apps are our top picks for bettors in Ontario.

  1. BetMGM Sportsbook Ontario >> See welcome offer here
  2. Caesars Sportsbook Ontario >> See welcome offer here
  3. BetRivers Sportsbook Ontario >> See welcome offer here

Also read: Proline vs. New Canadian Sportsbook Apps | Best Sportsbooks in Canada to Bet The NHL

About the Author

Kris Johnson

Writer & Contributor
With more than 15 years of experience as a sports journalist, Kris Johnson’s work has appeared in Sports Business Daily, Sports Business Journal, NASCAR Illustrated, and more. Kris also wrote a sports-betting novel entitled The Endgame.

Get connected with us on Social Media