Canada, like so many other countries around the world, has had a complicated set of laws that govern casino gaming for decades. As with so many other jurisdictions, there was a struggle to recognize that online betting and gaming would represent the future when setting out regulation. Of course, Canada has its peculiarities, including the legality of casinos (offline and online) on tribal lands and the power of individual provinces to legislate their own laws and rules. Things have started to change in recent years, with several states, notably Ontario, legalizing sports betting and casino, and clarifying the rules for bettors and operators alike.
Perhaps most pressing for Canadian lawmakers was the concept of the grey market in online gambling. The grey market involved the operations of online casinos and sports betting companies that are licensed outside of Canada. The “grey” label refers to the legal status of these platforms. They weren’t legal or illegal; they operated in the absence of the law. One study showed that 70% of all casino wagers in Ontario were made on websites operating under grey market rules, i.e., not licensed in Canada. But the passing of the Safe and Regulated Sports Gaming Act in June 2021 paved the way for provinces to chart their own path, with Ontario leading the way. There are similarities with the United States Supreme Court decision of 2018, which allowed US states to determine their own gambling laws, although there are elements of the Safe and Regulated Sports Gaming Act unique to Canada.
Ontario’s iGaming market went live in spring 2022
Nonetheless, in April 2022, Ontario opened its doors to a provincially-regulated online betting and gaming sector, which would be governed under the direction of iGaming Ontario, a regulatory body that forms a subsidiary of the Alcohol and Gaming Commission of Ontario (AGCO). And, in just over a year since its launch, there have been many changes in Ontario’s gambling markets. Most would argue that those changes have led to better conditions for Canadian players. Most notably, online casino Ontario platforms and gambling law in Canada have been reconciled, meaning the grey market has effectively stopped operating.
The end of the grey market is an important step for the gambling industry in Canada. In Ontario, it means that operators must adhere to the licensing laws set down by iGaming Ontario, and thus players are afforded the protections of a local regulator. It’s not that the brands operating in the grey market were untrustworthy – they were some of the world’s biggest and best – but anyone playing casino will want the regulatory oversight to come in their own jurisdiction. This is an important factor, particularly in the age of VPNs that allow players to play at sites based anywhere in the world. In the simplest terms, having a local regulator means they can step in to mediate if something goes wrong.
Of course, one of the obvious points to make is that being licensed in a province means paying taxes in that province. Industry experts calculated that Ontarians wagered somewhere around $500 million on online gambling per year before the new rules came into play. As we have seen, the vast majority of that was with operators not licensed in the province, either through the grey market or other means. The salient point is that those operators who have now obtained a license in Ontario must adhere to the tax rules of the province. We should also note that the new licensing rules help local operators enter the market and compete with international brands. This includes the Toronto-based Rivalry casino firm.
Responsible gambling initiatives can be overseen and managed locally
Perhaps the most important factor for the province is that having a body like iGaming Ontario overseeing the industry can help shape responsible gambling rules and procedures. The body uses the hashtag #PlaywithConfidence to illustrate its commitment to keeping gambling fun. Obviously, operators have to adhere to the conditions set down by the regulatory body, which includes running responsible gambling campaigns, sharing anonymized data on players’ habits, and providing players with tools to limit gambling if it becomes a problem. While operators in the grey market may have adhered to such initiatives, they were not obliged to do so.
In the end, it’s only been around 14 months since Ontario’s fully compliant gambling market went live. It will take many more years to fully assess the impact. Moreover, nobody should suggest that the laws should remain static. Gambling is linked to the evolution of technology. And just as regulations of today are put in place to reflect modern tech, including the internet and smartphones, new challenges, like AI and cryptocurrency adoption, will present themselves in future. Broadly speaking, however, we can point to the changes in regulation in Ontario and other provinces as a net positive for Canadians. They can play in the knowledge that they are playing legally and in a safe environment, with operators licensed in their home province. As iGaming Ontario says, they can play with confidence.
