Case information

Taxation — Income tax — Source of income — Poker activities — Net earnings from poker activities considered business income by Minister of National Revenue — Whether poker is “lottery scheme” or “pool system of betting” within meaning of s. 40(2)(f) of Act — In Canadian tax law, whether usual indicia of commerciality can apply to game of chance — If activity of game of chance may constitute carrying on of business, whether test from Stewart (2002 SCC 46, [2002] 2 S.C.R. 645) provides taxpayers sufficient guarantees of predictability and tax fairness in particular field of games of chance — Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 40(2)(f).

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

These three matters concern whether the net earnings derived from poker activities between 2008 and 2012 must be considered taxable. The Minister of National Revenue found that these earnings constituted business income and therefore taxed them. The applicants challenged that decision before the Tax Court of Canada, arguing that their earnings did not meet the criteria of business income and that they should instead be non-taxable as earnings from betting. The Tax Court of Canada largely rejected their arguments, finding that the poker earnings were indeed taxable business income. The Court of Appeal, for its part, did not accept the arguments to the effect that the trial judge had erred in law or committed errors in assessing the facts. It found that he had correctly applied the legal criteria and that his findings were supported by the evidence. It therefore dismissed the applicants’ appeals.