Will Gambling Affect My Mortgage in Canada?
August 13, 2023 | Posted by: Ron Chan
If you’ve been following the Winnipeg Blue Bombers or Jets, ritually watching each game as it airs on TV or while in attendance at their respective stadiums, then you have certainly noticed something. There are sports betting advertisements EVERYWHERE. This has been happening ever since August of 2021, when the Canadian government amended the criminal code to allow single-game betting, which paved the way for provinces (Manitoba included) to begin issuing gaming licenses to private companies. Consequently a large number of adult Canadians made sports betting a regular habit. For many Manitobans, this has added to gambling activity already occurring in the province’s 8 land-based casinos along with online casino sites and apps. As a regular gambler yourself, you ponder how the activity may impact your finances “on paper”. Moreover, as someone who is also getting ready to invest in a home, you are particularly wondering one key thing; “Will gambling affect my mortgage application?”.
Let’s find out.
Everything You Need to Know About How Sports Betting and Casino Gambling May (or May Not) Impact Your Mortgage Application in Canada
Winnings Not Counted as Income on Mortgage Application
Gambling related winnings are not taxable in Canada because gambling is considered a recreational activity and thus winnings are not a regular source of income. This law applies to gambling winnings from sports betting, horse racing, lotteries, online casinos and other games of chance. Therefore, you do not need to report winnings on your mortgage application, nor to lenders or the CRA.
Interest Earned on Winnings is Considered Taxable Income
If you win enough money on your gambling activities, and that income accrues interest in an account or other investment, the interest is considered taxable income. You may consider this one of those good problems to have, given that sportsbooks and casinos haven’t taken your money. What isn’t a good problem to have, is to have the CRA on your rear. Be sure to report that earned interest to them and when filing your mortgage application for lenders to review.
Gambling Debt Impacting Credit Score?
One way gambling can affect your mortgage, is if it has affected your credit score. This may have occurred if your gambling has incurred debt, and you have missed payments as a result. If this is the case, it’s time to put the brakes on gambling and consolidate debt to repair your credit and seek mortgage pre-approval once your score has improved in the eyes of lenders.
Bigger Picture Concerns
Above we showed you how gambling may or may not directly affect your mortgage application. It’s important to note that there are indirect but no less impactful ways you can be refused a mortgage due to gambling.
Canadians who have a problematic relationship with gambling face financial consequences that render them too risky for mortgage lenders. In addition to debt (as referenced above) these concerns include the following:
- Unstable bank account balances
- High occupational turnover (a symptom of problem gambling)
- Recent separation or divorce (problem gamblers exhibit higher rates of separation and divorce which renders a dual-income household a single income household).
Concerned that you may have a problematic relationship with gambling? We encourage you to seek help though this Responsible Gambling Council (RGC) resource for Canadians.
Ready to move forward with your mortgage application? Considering the potential for “grey area” above, it’s best to work with a mortgage broker to ensure that you’re best prepared to present your case to lenders. When it comes to buying a home, it’s best not to gamble by going at it alone. If buying a property in Manitoba, reach out to mortgage specialist Ron Chan today at 204.290.9950.