Canada has recently made moves to legalize and regulate online gambling, including both sports betting and Canadian online casino gaming. Previously, some forms of gambling had been allowed, mostly at the discretion of individual provinces. Now though, the country has federally agreed to lift the ban on single-game betting, opening up a world of opportunities for bettors and betting operators.
With individual provinces having the final say over regulating sports betting, Ontario looks set to be one of the first to bring legal online gaming after establishing iGaming Ontario. iGaming Ontario is a subsidiary of the province’s gaming regulator, The Alcohol and Gaming Commission of Ontario (AGCO), and was established to conduct and manage online gaming in the area. The AGCO also published its final draft of iGaming and sports betting regulations in Ontario, allowing new operators to set up shop without worrying about excessive restrictions.
However, although the legislation published by the AGCO describes iGaming Ontario’s purpose is to control Ontario gambling regulation, the iGaming Ontario website states that it will “enter into commercial agreements with operators who meet rigorous standards of game and operator integrity, fairness, player protections, and social responsibility, allowing all players to play with confidence”.
The History of Gambling in Canada
Canada has a long history with gambling, although it hasn’t always been legal in the country. The first recorded instance of gambling was a horse race in Quebec in the year 1767. Horse racing was incredibly popular at the time, with the Quebec Turf’s Club and the King’s Plate being the two main racing clubs that drew in the biggest crowds and the most bets. Although betting on horse racing persisted for some time, it was eventually banned in 1892 when the Criminal Code was established.
In 1892, the Criminal Code became the first piece of gambling-related legislation in Canada. The Criminal Code came about after the 1867 Constitution Act, which gave the federal government the power to legislate criminal acts across the country. Gambling, or more precisely, betting on games, was one of these crimes.
However, although all forms of gambling were banned by the Criminal Code, the ban was to be short-lived. In 1900, it was amended to allow bingo and raffle games to take place when arranged for charity purposes. In addition, 1910 saw pari-mutuel betting on horse races allowed. Pari-mutuel bets place all wagers into a pool which is then divided among the winners, making it fairer for the bettors.
For a long time, the laws remained relatively unchanged, although, in 1985, the government decided to grant individual provinces the right to allow gambling and casinos. However, this didn’t include single-game sports bets, which were still banned until 2021. Previously, sports betting had only been allowed in the form of parlays, but since the summer of 2021, Canadians have been free to take part in single game betting.
Why Were Canadian Gambling Laws Changed?
Gambling in Canada has always been popular, even if there were laws against it. The main reason for the laws being changed to allow Canadians to bet and gamble online is because they were already doing it even when it wasn’t allowed. Bill c-218 was introduced to allow single game betting, giving Canadians more freedom over how they can bet legally.
Before the law was changed, Canadians were spending around $10 billion a year on single sporting events, according to the federal government. This was often as part of illicit black-market betting by organized criminal networks. Canadians spend an additional $4 billion every year on the so-called grey market in offshore jurisdictions where such wagers are permitted. Despite not being legal, these offshore sites aren’t illegal either, and many Canadians made use of them to bet and place real money wagers online.
The new laws may allow that money to be brought back into Canada in a form that can be tracked and taxed, rather than being spent at illicit or off-shore sites. It means that local governments can charge operators taxes to operate in the province, and iGaming Ontario will be one of the organizations hoping to do so with legal Ontario gambling.
In addition to being able to tax it, Canada’s push to legalize online gambling will also help to control the industry and protect bettors from problem gambling. Canada online betting sites will require ID checks to ensure minors cannot place bets, and bettors will also have access to responsible gambling tools and resources. In addition, data will be shared between sportsbooks, law enforcement, and sports organizations to ensure the integrity of the sport is upheld.
The Aims of iGaming Ontario
Ontario looks set to be one of the first provinces in the country to truly welcome online gambling, with iGaming Ontario looking to bridge the gap between commercial operators and the AGCO. According to its website, iGaming Ontario aims to support consumer choice, consumer protection, legal market growth, and reduced red tape.
The organization supports consumer choice by introducing fair competition to the regulated iGaming market in Ontario while helping to increase the range of entertainment options and responding to consumer preferences. For consumer protection, iGaming Ontario ensures safe and responsible play while preventing access by minors and helping private operators comply with laws relating to anti-money laundering, privacy, and information security.
When it comes to legal market growth and provincial returns, iGaming Ontario expects to unlock opportunities for private businesses and capture provincial revenue that would otherwise flow to other areas. It also aims to reinvest provincial revenue into causes that will benefit Ontario. Finally, the organization also hopes to reduce the red tape involved in setting up commercial gambling sites by reducing the regulatory burden and enabling innovation and speed in the market.
What’s Next for Gambling in Canada?
Until the recent changes, Canadians who wanted to wager on a single event did so through grey market operators or offshore providers that were completely unregulated in Canada. As well as lacking protection to bettors, the money generated by these companies moved out of the country, rather than helping to fund causes closer to home.
With the new sports betting bill now in effect, provincial governments should be able to transfer significant revenue into government funds while also providing these critical consumer protections and combating the serious issue of money laundering. Online sports betting in Canada should then be safer as well as more profitable for the local area.
However, as it currently stands, the law is not favorable to private businesses looking to offer betting. iGaming Ontario believes it has found a way around this, potentially offering iGaming operators the chance to enter the emerging Canadian market. It remains to be seen whether this will be successful or not, and so far, no other provinces have followed Ontario’s lead. The change to the law was a welcome one for many in Canada, but so far, it’s unclear what effect it may have and which the first Canadian operators will be.
Gambling News, 2021
DLA Piper, 2021