12 Apr

Legality of Canadian Facing Online Casinos

What are Canadian friendly online casinos? Are they legal?

Legal Canada Online CasinosFor more than a decade, there’s been doubt surrounding the legality of online gambling in many regions of the world. Questions first arose when the US began its war on internet gambling back in 2006. Thanks to legislative amendments, we now know for certain that online casinos are illegal in most US states. But what about Canada?

Following passage of the UIGEA in the US, the iGaming industry began labeling different countries of the world. They fell into three distinct categories – white markets, black markets, and grey markets.

White markets are jurisdictions where online gambling is expressly legal and regulated. Black markets are the opposite end of that spectrum; where online gambling is expressly illegal. Grey markets are those that fall somewhere in the middle.

Is Canada a Grey iGaming Market?

Yes, for the most part, Canada falls into the grey market category. However, it’s a rather unique situation. Here in the Great White North, we are a white market, and a grey market.

In the provinces of British Columbia, Manitoba, Ontario and Quebec, online casinos are legally regulated and operated by their respective provincial regulators. That means there is no room for competition within. Only a provincial regulator is able to maintain an online casino. Therefore residents of each respective province have access to only one, locally-licenced gambling website.

We are also a grey market because there are hundreds of Canadian facing online casinos operating offshore. These sites conduct business from offices in other countries, and abide by the regulations of their own jurisdictions. There are no express laws in Canada to stop them from accepting Canadian players. There are no such laws stopping Canadian players from accessing them, either. Thus no laws are being broken.

What are Canadian Friendly Online Casinos?

Canadian Friendly Online CasinosBy the loosest definition, a Canadian friendly online gambling site is one that accepts Canadian players. But not all Canadian facing casinos are legal, nor are they all what I would describe as “friendly”.

In order for an international gambling website to operate legally, and accept Canadian players, it cannot have any physical presence within the borders of Canada. That’s the only constitutional requirement that’s ever gotten any operator into trouble.

It happened back in 1999, when an online casino operating under a licence from the island nation of Antigua and Barbuda was brought up on charges for accepting Canadian players. That alone would have been fine. However, the company, Starnet Communications International (SCI), had a physical office in Vancouver, B.C.

The Courts of BC determined that, according to Section 202(1)(b) of the Criminal Code, the company was guilty of operating an illegal online gambling business.

In short, so long as an online casino has no physical presence (office, servers, etc.) in Canada, it is perfectly legal to accept Canadian players.

Why Some Canadian Facing Online Casinos aren’t so Friendly

As I said before, not all gambling websites that legally accept Canadians are what I would define as friendly. This is because they don’t all operate under the same strict regulatory codes, or sustain business practices that benefit Canadian players.

First and foremost, regulatory standards must be taken into account. Some jurisdictions have stricter regulations than others. Alderney, Gibraltar, Isle of Man, Malta and the UK are known to promote the highest standards in iGaming responsibility. Compliance is mandatory, enforcement is strict, ensuring the protection of all players.

Unfortunately, some jurisdictions don’t abide by these standards. Costa Rica is a perfect example. There are no obligations to conduct an upright business. So long as the operator pays its dues to the local government, and Costa Rican players cannot access the website, anything else goes.

The second attribute that constitutes friendliness is the provision of services that benefit Canadian players. This applies mostly to banking options. A casino that requires CAD deposits to convert into a another currency before wagering is not as friendly as one that permits wagers in CAD. Currency conversion comes with fees, costing players extra money that would otherwise be a part of their bankroll.

Future Prospects for Canada’s iGaming Legal Climate

There’s no predicting what the future might hold for Canadian facing online casinos. In areas where online casinos are under provincial regulation, the local government would love to prohibit offshore operators from accessing their residents. Whether they will ever succeed is doubtful.

Quebec tried to do just that, passing a law in 2016 that would have given them the right to enforce IP blocks against international casino sites. To make a very long story short, the Canadian Radio-Television and Telecommunications Commission (CRTC) shot it down. By federal law, only the CRTC can enforce IP blocks against any internet website.

Since then, provincial governments have made no attempt to stop Canadian friendly online casinos from accessing the market. There’s no evidence to suggest they’ll start up again anytime soon.

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