A Toronto man trying to write off casino and racetrack losses against his income tax bill has gambled and lost at Canada's Federal Court of Appeal.

Winnings from gambling on the other hand are slightly different in that they are also generally non-taxable, but, if considered to be part of a business, become taxable. Hobby vs Business. To determine whether gambling is undertaken as a hobby or as a business, the Supreme Court of Canada has laid out a test in Stewart v. Canadian casino players and gamblers don't pay tax on their winnings; However, if you are a full time/professional gambler, you are required to file taxes; If you gamble and win whilst in the USA, you need to declare it; Lottery winnings also aren't taxable. While we are a team of gambling experts, we do not claim to be lawyers in any way. Specifically, your tax return should reflect your total year’s gambling winnings – from the big blackjack score to the smaller fantasy football payout. That’s because you’re required to report each stroke of luck as taxable income — big or small, buddy or casino. The court concluded that the CRA had fully considered all of the taxpayer's submissions, and that there was no evidence of procedural unfairness or bad faith by the CRA. However, the court concluded that the CRA had misinterpreted or misunderstood the taxpayer's activities, and had drawn unreasonable and unsupportable conclusions about the tax treatment of the taxpayer's gambling winnings.

Giuseppe Tarascio claims that gambling is how he earns the bulk of his income. He filed tax returns for several years, claiming both his wins and losses.

By day, Tarascio is a technician with Bell Canada. But on evenings and weekends, he responds to what he claims is his true calling: horses, slot machines, casino games and lotteries.

He claims to have won tens of thousands of dollars. For years he claimed those winnings as income, but he also deducted his losses and expenses.

In his income tax returns for 2002 and 2003, he deducted from his gambling winnings his losses and associated expenses: $40,933 in 2002 and $56,000 in 2003.

But Tarascio’s luck ran out when the Canada Revenue Agency (CRA) stepped in and disallowed those deductions.

Tarascio objected and went to tax court. He presented his books and records, but lost there too.

No 'systematic method,' court rules

Hoping his courtroom losing streak would end, Tarascio pushed his luck further, taking his case to the Court of Appeal.

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He claimed that his degree in mathematics — coupled with his experience in probability theory — gave him the expertise to register his gambling as a business.

But the court turned him down, saying Tarascio had no 'systematic method' for gambling and had spent no time practising his skills. He was also required to pay court costs of $1,000.

It didn't help that Tarascio admitted that win or lose, it was really the thrill that drove him to the tables.

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Colin Campbell, who teaches tax law at the University of Western Ontario, said the test of whether or not gambling losses are a legitimate writeoff depends on whether it’s a personal or commercial activity.

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'That's the dividing line,' said Campbell. 'And in the case of gambling, the courts have generally found that gambling is predominately a personal activity.'

Tarascio didn't want to talk about the decision when contacted by CBC News.

Asked if he planned to appeal to the Supreme Court, he said no. That would require a lawyer, but Tarascio said he can’t afford one.