INFOPLAY SPECIAL REPORT - On Gambling and the Regulated Online Gambling Market in Canada

This INFOPLAY REPORT delves into how gambling has evolved over the years in Canada, with a particular focus on the emergence and regulation of online gambling. Discover how Canada has tackled the unique challenges presented by the digital world in the sector and what the legal framework is.

It is increasingly common that in our daily review of sector news we find more news related to Canada and specifically to the province of Ontario. And it is not just about foreign operators or companies, but even very close brands such as Goldenpark have recently launched themselves to conquer the Ontario market.

That is why we would like to bring our readers closer to the reality of Canada in general and Ontario in particular.

It's not easy to provide a detailed view of the current state of online gambling laws and regulations in a country seemingly as different from ours as Canada. However, by reviewing some basic aspects of the history of gambling and its evolution until the arrival of the digital entertainment era, we can get close enough to a reality that allows us to highlight similarities and differences with other markets such as Spain, Argentina, or Colombia.

To do this, we will divide this INFOPLAY SPECIAL into two parts:
  • The first is a historical approach to gambling and its perception in the country, followed by the arrival of online gambling. Then, we will see how the only existing regulation a century ago (the Penal Code) has been replaced by a myriad of independent regulations and rules from the different provinces. A legal framework that has been developed to make the Canadian gambling scene homogeneous and capable of having a regulation that has served as an example in other parts of the world: Ontario.
  • Specifically, in the second part, we will focus on that reality of Ontario, with legislation that matches and leads the praises that Canada is receiving when legalizing online gambling.

1 - History of gambling in Canada

Gambling and games of chance were already part of the culture of the indigenous peoples settled in what is now Canada, where some had ceremonial and social meanings. The arrival of European settlers in the 16th and 17th centuries introduced new games and elements, such as cards and dice.

It wasn't until the 1900s, when betting on horse races was allowed and lotteries were introduced to raise funds for public projects.

At this point, and at the level of regulation (as is the case in most Anglo-Saxon culture countries), there was an attempt to create a specific law so that all this matter would stop being regulated through the Penal Code. The first decision was to allow provinces and territories to collect funds generated by gambling activities, with lotteries and horse racing as the main activities.

As everywhere in the world, online gambling was introduced in Canada at the end of the 1990s and the beginning of the 2000s. And just as it had been done with other games of chance, the regulation and control of online gambling were left to the provinces.

Some of them, such as British Columbia, Quebec, and Ontario, have tried to maximize their gambling revenue through the creation of their own online gambling projects. However, as we will see with the successful case of Ontario, the regulated market model that has been exported all over the world has been the one based on liberalization and the arrival of international operators attracted by good legislation and a moderate tax burden.

2- Emergence and Evolution of the Online Gambling Industry

Once the land-based gambling sector is consolidated based on the idea of exclusive regulation by the provinces and territories that make up Canada (13 in total), it's the turn of online gambling. And it does so with poker as the first protagonist. Not only did Canada become a haven for players from the United States when Black Friday hit the neighboring country (which interrupts the fervent activity of online poker in the neighboring country), but online gambling operators also moved their offices to cities like Toronto, Ottawa, or Vancouver.

It's important to note that leading industry companies like PokerStars were born in Canada. In fact, the first hand dealt in PokerStars' online poker room was in Ontario more than two decades ago.

Daniel Negreanu, the Canadian poker player and ambassador for Canada

But besides poker, the entire sector found support in the very technological and emerging segment of video games. Indeed, in Canada the video game sector has grown significantly over the last two decades, becoming today one of the largest video game producers, with companies such as Ubisoft, EA, and BioWare. Video games are an important part of Canada's digital economy, and synergies in terms of development, marketing, and product made it possible for a gambling industry to be born in parallel with this one.

But essentially there were two events that made Canada a convenient place for the development of adequate regulation and industry:
  • What happened on the so-called Black Friday for poker in the United States, with the traumatic enactment of the UIEGA (Unlawful Internet Gambling Enforcement Act) of 2006 (UIGEA) where it is established that poker de facto ceases to be legal. This caused thousands of professional players, affiliates, and operators to be encouraged to cross the border, and the sector needed stronger regulation in Canada. Canada then presents its candidacy as the possible responsible party to take over the American gaming tradition.
  • And then in August 2021, the law known as Bill C-218 that repeals paragraph 207(4)(b) of the Canadian Criminal Code making single bets on sports events no longer illegal. From this moment on, provincial governments can regulate single betting markets, making the sports betting segment -finally- attractive to operators.

3 - Regulations and Legislation

Similarly to Argentina, in Canada it is the Provinces that regulate and create the bodies in charge of overseeing and controlling the market and the arrival of gambling operators. Predominantly, Canada has opted for Corporations focused on lottery games (which have been very popular since the early 20th century) as the institutions responsible for legalizing any game of chance or skill that appeared in a real money version.

These institutions (Lottery Corporations), have been adapting to the times and progressively including other games that the Canadian Senate was authorizing.

In fact, the first of the laws that we are going to highlight in the list of the existing legal framework is none other than the Penal Code, which is the first legal document that already in the 19th century includes mentions about the legal status of gambling.
  • The Criminal Code

The Penal Code of 1892 is a law that codifies most of the criminal offenses in Canada. Since then it has been updated to reflect changing social values and the reality of new specific laws for issues such as gambling. It strives to give coherence to the way criminal law is applied in Canada and make the judicial system more accessible to laypeople. And in its first version, gambling appears as an illegal activity.
  • Review of the Criminal Code, RSC 1985, c C-46, Criminal Lotteries (Part VII of the Criminal Code)

In general terms, all forms of gambling were prohibited by the federal Criminal Code of Canada since 1892. However, currently most provinces have established separate governmental entities, known as Lottery Corporations that have been able to regulate the sector at a provincial level. And they do it because with this Law of 1985, gambling is taken out of the Criminal Code and begins to be considered as "a form of entertainment where a game of chance, a betting scheme, or a lottery scheme is played for money".


That is why the year 1985 is key as gambling becomes a regulated activity in Canada, but it is only legal when it is administered by a provincial government.

  • The Gambling Control Act of 1992: which regulates land-based gambling in Ontario

After the 1985 Law, the provinces work on creating their own legal frameworks. And in the case of Ontario, it is made concrete with its Gaming Act of 1992, which creates the Ontario Lottery and Gaming Corporation, incorporating casinos, gaming halls, and parlay betting to the legal gaming sector. This provincial legal framework is justified by economic development, generating income for the province, and promoting responsible gambling, while pursuing illegal gambling.

  • The Safe and Regulated Sports Betting Act (C-218): the law that for the first time allows individual bets on sports events

It was on June 23, 2021, when the Canadian Senate gave the go-ahead (for the first time in history) to legalize single bets, that is, the markets that offer a single quote on a particular match or event.

Until this date and with the entry into force of this Law, Canadians could not make individual bets but only (since 1985) the bets of combined or parlay bets (two or more bets grouped into one) were allowed. A reality that comes from the golden age of horse racing and that was available in person through each province's lottery system and later online.

The absence of a real betting market (where to bet on individual events) had led Canadians to look for more favorable online options in the states that the US was regulating the sector.

  • S-268 and S-269: Bill on sportsbetting in 2023

Much more recent are the two bills related to sports betting already presented in the Canadian Senate in June 2023. The first one is Bill S-268 that would allow the Indigenous National Associations to offer sports betting both in their halls and casinos and online from their reserves. While Bill S-269 would develop a national framework for sports betting ads, covering the only big topic that remains controversial today even in Ontario: the regulation of commercial communications on television and audiovisual media.

As we have already advanced, in a second part of this INFOPLAY SPECIAL we will focus on Ontario and how in this and other provinces gambling on the internet, poker, and sports and event betting have been regulated.
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