Who presents the best regulatory model should our federal government script a framework for legal online casinos in Canada?
When it comes to questionable legal matters, particularly those where
the people are divided on moral grounds, some federal governments
will take the ‘wait and watch‘ approach. That’s exactly
what we’ve seen from multiple jurisdictions in regards to
internet-based gambling. There are forerunners, like the United
Kingdom, followers like Australia and the United States, and then
there are those that freeze up, like a deer in headlights, not daring
to make a move until a clear path lays itself out before them.
Canada’s federal government is the deer. That’s not necessarily a bad
thing, though. In fact, it’s given us, as players, the freedom to
choose our own path. We can bet on sports or play casino games,
poker, bingo, and more, at any online operation we please. Only
websites hosted within Canada – those not by the crown corporation
of their local province – are illegal, and the fault for using them
lies solely with the operator, not the players.
By all means, we are among the most liberal online gambling nations
in on the planet! However, our government has been ‘waiting and
watching‘ for an awfully long time. Our provinces are doing their
best to capitalize on the opportunities provided, launching
ring-fenced iGaming operations within most provinces, but they are
tired of losing money to foreign markets. If and when our federal
government decides to heed their call and make a change, which
regulatory framework is best suited for mimicry?
Top Model for Legal Online Casinos in Canada
There are two major options to consider here; the United Kingdom or
the United States. For the last five years, the UK has been praised
for setting the bar all other jurisdictions should follow, and is
widely considered the most successful iGaming jurisdiction in the
world. Oddly enough, no jurisdiction has moved to follow them step
The US took an entirely different approach, but one that seems to be
working well enough for its 50-state environment. And should our
head-honchos decide it appropriate to leave ambiguity behind and
script a modern framework for the online gambling age, which
regulatory model should they follow? Let’s take a closer look…
The UK Online Gambling Model of Law
I’m not going to get too deep into the legislative aspect here, because there’s only one feature that truly sets the UK apart from almost every other legal iGaming jurisdiction in the world. It’s not a ring-fenced market.
Operators can be located in or outside of UK, and still apply for a license. Likewise, any UK-licensed operator can accept players that reside in or outside the UK, so long as the country of residence does not expressly prohibit online gambling.
For example, UK licensed operators can accept Canadian players,
because it’s not illegal here, but not US players, since US states
ring-fence their player pools. As such, the UK makes millions of
dollars per year in licensing fees, and much more in 15%
US Guidelines for iGaming Regulations
The US federal government took a different approach –
understandable, considering its girth and 50-state segmentation. From
a federal standpoint, all forms of gambling are illegal unless a
state choose to legalize and regulate them. Therefore each state
manages its own laws on the matter.
So far, only 3 US states, Delaware, New Jersey and Pennsylvania, have
legalized online casino games. Nevada regulates online poker only. A
few more have conceded to online lotteries. Aside from the shared
liquidity between poker networks in Delaware and Nevada, all of these
jurisdictions have one thing in common – they are ring-fenced
Only players physically located in New Jersey can play at New
Jersey’s state-run online casinos. The same goes for Delaware and
Pennsylvania. Furthermore, laws are in place preventing any operator
not licensed by the respective state from accepting players within
Conceptualizing the Laws of Canadian iGaming
Which route should Canada go, if our federal government decides a change is necessary? Well, on the one hand, going the UK route would preserve the freedom of choice already provided to the people. It would also give provincial governments an added revenue stream, requiring foreign operators to pay license fees and taxes, and at the same time staunching the flow of countless dollars from leaking offshore.
Taking the US route would change things entirely. First, it would
eliminate our ability to wager with offshore operators. Secondly, it
would make room for competition in each province. Instead of a single
legal operation run by the crown corp, multiple operations would be
allowed to open under provincial authorization. The end result would
be choices, but not nearly as many of them.
Unfortunately, either route would spell the end of betting on single-event sports. A federal-level regulatory scope would ban any activity not expressly legal in the country. The fact is, any change to the status of legal online casinos in Canada would take away something we currently have access to. While the UK option seems preferable to mimicking US regulations, I think most of us can agree no change would be best – at least, for the players who enjoy online gambling.
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