Current Status of Online Gambling Regulation in Canada

Online gambling in Canada exists in a strange legal grey area. While it’s technically illegal for citizens to play for real money at any facility based outside of the province they live, millions still do it. The huge online casinos and sports books of the world have no problem with offering their services to the people of Canada, and they’re often favored over the much smaller state offerings. What’s strangest of all, the Federal government’s lack of action on the issue allows them to milk huge profits from the economy, with zero tax obligation.

Just what exactly is going on here? Can Canadians feel safe playing at online casinos? We’ll get to all that, but let’s start with a bit of background first.

History of Gambling in Canada

Venetian colonialist John Cabot first documented the native people he encountered in what we now call Canada playing games with sticks and pebbles and betting on the outcomes in 1497. He went on to discover evidence dating back as early as 6,000BC of similar games across in the area. Like most of the globe, Canada has a rich history of gambling.

Presumably, early Canucks (the colonial ones) also enjoyed the freedom to play the games of chance popular in the countries they left behind. This liberty would be short-lived, however. Following the official declaration of Canada as a country in 1867, citizens could legally gamble for just twenty-five years before the pastime was made illegal. The initial legislation might have been extreme but the next seventy years would see its slow rolling back, allowing more forms of gambling in the nation.

The culmination of the subsequent revisions to the 1892 Criminal Code came in 1985, when the government finally legalized gambling, deeming it to be a matter for provincial jurisdiction. This was the last time the Federal government legislated on gambling.

Of course, in the years that followed many Casinos, lotteries, and sports bookmakers were opened where legal. Each state’s laws differ somewhat on the matter. For example, New Brunswick, Prince Edward Island, and Newfoundland and Labrador, are the only areas which do not allow horse racing, ticket lotteries, and charitable gambling. The legal age also differs in some locations.

Online Gambling in Canada

In the late 1990s, and continuing into the new Millennium, online gambling exploded globally. There was already a booming casino industry following the repeal of earlier gambling legislation and with online versions gaining popularity globally, it was only natural that Canada would follow suit. As the internet’s reach into our lives continued, and with land based casinos struggling to compete against the online bonuses and offers, the market share of virtual casinos grew exponentially in the early part of the twenty-first century.

Where many jurisdictions across the planet legislated one way or the other around the new form of entertainment, Canada’s executive remained strangely quiet. The law which governs such activities is antiquated, and was written in a time when internet gambling wasn’t even considered. Whilst they work well for brick-and-mortar casinos – allowing them to operate at a state level – the issue is somewhat blurred when it comes to their online counterparts.

The Kahnawake Gaming Commission was established in 1996 to oversee online gambling in the Kahnawake territory. The legality of such a commission has been refuted through the courts on numerous occasions but due to the peoples’ status as a sovereign nation, they’ve argued it is their right to issue licenses to overseas providers. This is not how the legal system saw the matter, and the Kahnawake have been overruled. Despite this, they continue to issue licenses, and accept Canadian players, perhaps suggesting law enforcement’s priorities lie elsewhere.

The interpretation of the law from 1985 makes gambling across provincial borders illegal. Thus, state online casinos are legal, but supra-state one’s are not. Once a casino from Ontario accepts a player from a neighboring jurisdiction, they’re in violation of the law. This is the same as the situation online and all but those instate casinos, accepting only citizens of that state, are technically illegal. Likewise, those offering their services from outside of Canada are also in violation of the law too.

Wait? What? I know loads of people who play online here…?

Fortunately, or foolishly (depending on how you look at it), the Canadian government largely turns a blind eye to those flouting the antiquated gaming laws. Some suggest that there are more pressing matters in society to deal with (drugs, domestic crime, or terrorism, for example), while others highlight the billions of Canadian dollars leaving the country every year in the pockets of foreign companies. With such large streams of potentially taxable revenue taken from the economy annually, the Federal stance on the issue, and their reluctance to update their legislation seems mystifying.

Even the nation’s banks seem fine to bend the rules, and where they don’t, it’s very easy to set up an eWallet service and transfer cash directly from a current account to a provider who don’t ask questions, and transfer it to an out-of-state, or out of country casino. What’s more, it’s not the player who is committing the offence, so there will never be any repercussions at the gambler’s level. Whilst the law stays as it is, and whilst policing other matters takes greater importance, Canadian players can enjoy a wide range of international, and nation options with no fear of sanctions.

Some provinces are doing just that; they each have their own corporation which oversees all aspects of online gambling in its jurisdiction. The 1985 Amendment to the Canadian Criminal Code had already allowed each province to regulate slot games and other computer forms of gambling. Although that was long before there was Internet Gambling, individual provinces have interpreted the amendment to mean that they could also regulate online poker and other casino games.

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