Do Gambling Losses Get Split After a Split?

June 2, 2014
Ron Shulman

Article written by Ron Shulman

In Ontario, the governing rules that guide the division of property when a couple permanently separates and divorces are found in the Family Law Act.   These provisions establish the general rule that family property should be divided equally; however, the law also recognizes that there are some exceptional factors and situations that may call for a departure from the usual rule, so that anunequal division is called for.

One such scenario involves gambling debts:   For example, let’s say your Ex controls the money in your relationship but both before and after separation has wasted a significant amount of it, by gambling away funds otherwise earmarked for family-related purposes.

Faced with this scenario, Ontario courts are given special discretion by law to adjust the equalization calculation to take into account your former spouse’s “intentional or reckless depletion” of his or her Net Family Property.  The courts can do this by adjusting the equalization payment to which you are entitled, i.e. increasing it to reflect the fact that it would be unfair to make you responsible for your Ex’s unconscionable dissipation of family funds.

Note that the mere fact that your Ex wagered away family money is not enough:   in law the gambling must give rise to a situation of “unconscionability”, which is a legal threshold requiring something more than simply an unfairness or inequality.  Also, your Ex’s gambling must be considered in light of other factors such as:

  • the amounts of money risked and lost
  • the proportion of funds that were put at risk
  • how much both of you earn
  • the resources each of you brought into the marriage, and
  • the overall conduct of both of you (including whether you may have condoned your Ex’s gambling risk and the resulting losses).

Do you have a question about how gambling losses are dealt with in a relationship split?  Contact us for a consultation.