Each year, Canadians wager an estimated billion on offshore sports books located in Antigua, Gibraltar, the Isle of Man or the United Kingdom, said Paul Burns, vice president of the Canadian Gaming Association. “In contrast, they spend about 0 million on provincial sports lottery games,” like Ontario’s Pro-Line. Yet the Canadian government does nothing to regulate online sports betting or collect taxes from it.
The reason bookmakers and bettors essentially can operate freely is because sports betting technically is not illegal in Canada. Attorney Michael Lipton, a gaming law expert at Dickinson Wright in Toronto, said,
“There have been no prosecutions that resulted in convictions or guilty pleas, so the offshore sports books look at Canada as a grey zone.” He noted each province oversees gambling in its territory, so the hundreds of websites offering casino and sports betting to Canadians exist beyond the provinces’ jurisdictions.
In addition, the Canadian criminal code offers little in the way of guidance regarding gambling. Attorney Chad Finkelstein, a noted gaming law expert, said, “The criminal code was written decades ago, and these provisions with respect to gaming were drafted in the 1960s and haven’t really been updated since. These provisions were not drafted with anything remotely resembling the internet ever contemplated. So we have outdated, antiquated provisions, which makes it difficult to apply to a modern gaming business.”
Finkelstein added, “If anybody tried to shut them down, online bookmakers are relying on the possibility they can’t be held liable in Canada since there isn’t a real and substantial connection between their offshore entity and Canadians who happen to access it.”
Wagerers can deposit and withdraw money through online betting accounts using major credit cards or via their accounts with large Canadian banks. In a statement, the Canadian Banking Association noted, “Laws vary by province but, in general, many forms of online gaming are legal in Canada. Banks do reserve the right to prevent transactions if they believe that the client is using the account for illegal or fraudulent purposes.” The statement continued, in some banking agreements, “online gaming transactions are listed as the types of transactions that may be prohibited. Banks will determine what transactions to allow in client accounts based on the laws in the jurisdictions where they operate and their own business policies.”
Lipton noted regulating online sports betting could provide “a very large source of potential revenue for the government. At the same time it also highlights the fact that the existing regulatory framework does not work anymore, and it’s about goddamn time the government looks at this and thinks about how they can change it.”
But that would require changing the law that restricts sports betting to a minimum of two games, called a parlay. Canadian Gaming Association Vice President Paul Burns said, “We cannot offer in Canada the product these people are seeking offshore. People have gravitated to these offshore sites. They like to bet on their favorite team, so they go where they can do that. They use their credit cards, they don’t have to leave their homes. They have chosen to spend their money there.”
Parlays are more difficult to win than single-game bets, and become more difficult as wagerers add more games to the ticket—because if you get on pick wrong, you lose. Also, the provincial lotteries offer lower returns than betting the same parlay offshore.
Recently MP Brian Masse introduced a private members bill, C-221, that would let Canadian bettors wager on single games and allow the Canadian government to tax and regulate those activities. “This is low-hanging fruit in terms of the discussion about something that is going on in our society whether we like it or not. It’s not an insignificant issue. It’s billions of dollars disappearing without any real public benefit. It affects your life even if you don’t bet,” Masse said. He added if the bill passes, provincial lotteries could be more competitive, “so that this offshore betting activity is actually translated back to the taxpayer to ensure we have revenue for health care and education.”
Ontario Lottery and Gaming Corporation spokesperson Ryan Bissonnette said Masse’s bill “would allow us to investigate what we can offer on our site in the future.” PlayOLG currently offers a suite of casino-style games but has no sports choices, forcing players to bet at local lottery retailers—or on offshore websites.
Bissonnette pointed out the provincial lotteries offer the offshore sites can’t promise. Also, “this money goes to health care, education and community infrastructure in Ontario, he said, noting in 2014, lottery revenue was $2 billion, including nearly $40 million spent on promoting responsible gambling.
However, law enforcement in regard to offshore sports books would not be easy, said Lipton. “If you are going to do something about enforcing the law in relation to these offshore sports books, you better be ready to tell that to the Kahnawake Mohawks.” The Kahnawake Gaming Commission, located in the Mohawk Territory of Kahnawake in Canada, is one of the largest licensing authorities in the world, and one of the first jurisdictions to offer licensing and regulation to offshore gaming websites. At the moment it licenses nearly 100 international gambling sites that must be hosted on servers located within Kahnawake territory. The tribe also operates the highly popular Sports Interaction gambling website.
But CGA’s Burns noted, “Most Canadians will tell you they believe what is going on is legal and they assume that somebody is paying what they should be paying to the Canadian government. They are not.”
Unfortunately Masse’s bill does not have widespread support in the Canadian legislature. “Not a lot of politicians want to stand up for gaming or stand in defense of gaming,” Finklestein said. Liberal Sean Casey, the Parliamentary Secretary to the Minister of Justice and Attorney General, recently announced in the House of Commons the government “will be opposing the bill.” Among the reasons he listed were concerns that “legalizing single-event sports betting could encourage gamblers to fix games.” He also mentioned social impact, citing a 2011 letter from the Centre for Addictions and Mental Health in Toronto that warned “an increase in legal gambling could lead to an increase in problem gambling,” with a special emphasis on sports betting.
