On August 27th, Canada officially legalized single-game sports wagering, allowing the country’s various provinces and territories to manage this activity how they see fit. Up until that point, Canadians were only allowed to legally bet on sports matches under the “parlay-only” model, where a bettor could only wager on the outcome of two or more sports events at once, in an attempt to avoid match-fixing. The legislative effort comes in the form of bill C-218 which was voted in the Canadian parliament in June of 2021. This will not only open up game options for players, but revenue lines for the state as well, with major events such as the Grey Cup, Super Bowl or the Stanley Cup attracting millions of bettors each season, and tax income will surely soar.
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History and Background
Gaming activities in Canada are regulated by the Criminal Code, essentially meaning that offering betting options and betting itself are prohibited along with any attempts to facilitate gambling such as marketing and financing and even going as far as leasing a space that would be used for gambling. It’s not all as clear-cut as that, though. The Criminal Code is a blanket prohibition that allows for exceptions at province level. Local authorities are delegated the responsibility and ability to offer licenses and regulate some types of gambling such as casino games, slot games, and lotteries, but only for land-based operations, without covering online ones. The Criminal code is unfortunately very difficult to navigate, with loopholes and prohibitive details which make it very complicated for the common bettor to figure out where and how they can legally place bets. For example, provinces are not allowed to offer licenses to third party operations but can manage online gaming operations themselves. On top of all this, before the passing of bill C-218, by the Criminal Code and without exception, bettors were only allowed to place wagers by a “parlay-model” – meaning they had to correctly predict the outcome of two or more events in order to register a win. This was done to avoid any chance of match fixing and other foul play on the part of event organizers.
Legalization and Implementation
For clarification, bill C-218 does not entail a blanket legalization of any and all types of sports betting. It allows provinces greater liberty in managing and regulating gambling on sporting events, specifically single sport and event betting, within their borders. For example, while before bill C-218 a bettor was obligated to bet on the outcome of the combined bets of who would win between a Team A and a Team B, plus a Team C and a Team D, while now provinces can allow for a single bet to be placed on the outcome of a match between Team A and Team B. This covers all types of events such as races, fights, athletic contests, and team sports. As mentioned earlier, however, it’s up to each individual province to establish licenses and regulations for single event sports betting and bill C-218 still does not offer exceptions for third-party online gambling. A province can, for example, hire someone to provide land-based operations on its behalf which also offer single event sports betting. For any online endeavors, however, the province must handle that directly. This means that independent, international operators still cannot legally penetrate this market. Canadians will have to wait for a while longer yet to legally place bets in online venues such as William Hill or Draft Kings, however given their American neighbor’s recent developments in the legalization of sports betting, there may be hope yet. Until then, Canadian bettors will, most likely, continue finding “gray-area” solutions for their iGaming needs and the Canadian government will continue losing valuable revenue from taxation. In short, bill C-218 legalizes the option for a province’s authorities to directly offer single event sports betting both online and offline, and the same authorities can contract third-party operators to offer such services, but only in a land-based establishment. As a notable case, the province of Ontario is attempting to navigate the murky legal labyrinth by creating an opportunity for independent iGaming operators via a hybrid model where Ontario directly handles the online betting (as per the Criminal Code) but with the assistance of the operator. This would be perfectly acceptable given how other provinces allow for slot machines to be placed at brick-and-mortar establishments, functioning as agents for the provincial operator which offer gambling services. Such complicated and obscure approaches should not be necessary, given that the end-goal is still the same – offering citizens a safe, regulated, and taxable environment to play.
Conclusion
While it marks the beginning of what could be a new era of freedom for Canadian gamblers both online and offline, Canada’s gaming laws still have a way to go before fully taking advantage of the revenues they could be achieving from taxation. More amendments need to be made to the laws from the Criminal Code so that private operators, both land-based and online, could operate in a legal and regulated environment, limiting the negative influences of grey or black-market providers and the potential for money laundering. This way, Canadian citizens will have safer betting options, especially during times of pandemic and lockdown. The government will also have more sources of revenue, by implementing taxation both on an operator and user level. For now, Canadians will rejoice at the opportunity to legally place a bet on whether their favorite teams will win in single events, although not with as many venue options as they might wish. With the current NHL season in full swing however, it’s certain that Canadians will show an increase in betting activity while the provinces which have already taken advantage of the liberalization offered by bill C-218 will surely register increases in tax revenue from gambling.
