• Criminal Code Of Canada Illegal Gambling Sites
• Criminal Code Of Canada Illegal Gambling Winnings
• Criminal Code Of Canada Illegal Gambling Laws

Federal Justice Minister David Lametti is expected to introduce legislation as soon as Thursday to legalize single-event sports betting in Canada — ending a decades-old prohibition on gambling that experts say has funnelled billions of dollars into the black market.

Canada vs U.S: It is clearly illegal in Canadian law to operate an online casino/gaming site from within Canada (i.e. Legally formalized there, playing servers located there) without a license. However within the Criminal Code of Canada there are no laws that explicitly address offshore gaming sites. Offences relating to gambling are found in Part VII of the Criminal Code relating to 'Disorderly Houses, Gaming and Betting'. There are three classes of offences in relation to Gambling under the Criminal Code. Those offences relate Keeping a Gaming/Betting House (201), Betting and Book-Making (202), and Placing bets on behalf of others (203). Accordingly, all gambling is generally criminalized in Canada (see section 206). After initially criminalizing all gambling, the Criminal Code, in the next section (s. 207), sets out exceptions. Activities which are provincially-licensed and regulated are deemed to be legal gambling.

The proposed government legislation, if passed, would allow gamblers to place a bet on the outcome of a single sports game, like a football match or a hockey game.

Currently, sports bettors in Canada are limited to 'parlay' bets — meaning they have to place bets on more than one game, and pick the winning team in each contest, to see any sort of windfall. The odds of a winning parlay bet are low. Canadians spend roughly $500 million a year on parlay bets through lottery games like Pro-Line.

MPs from communities with large casinos — notably Windsor and Niagara Falls in Ontario — have been pushing the federal government to remove a single line in the Criminal Code that restricts gambling to parlays to give a boost to Canadian gambling operations, which face increasing pressure from foreign online outfits and U.S. casinos.

Liberal MP Irek Kusmierczyk, who was elected last fall to represent Windsor-Tecumseh, said in a Facebook post Wednesday that he's been 'working hard since day one' to push the government to make the necessary Criminal Code changes, which could allow casinos like Caesars Windsor or racetracks like Toronto-based Woodbine to offer enhanced sports wagering.

'Excited our government will be introducing single sports betting legislation this week,' he said in the post. 'Total team effort.'

A spokesperson for Lametti declined to comment on legislation that has not yet been introduced in Parliament.

Paul Burns, the president of Canadian Gaming Association, said he's happy that years of advocacy work by MPs and local communities finally pushed the government to stem the tide of wagered money moving offshore.

'It's just been a horrendous year for our businesses,' Burns said, adding pandemic-related health and safety measures have devastated in-person gaming at casinos and racetracks.

'It doesn't cost the federal government a thing but it gives us another product, another channel, to help us attract customers back to our businesses when it's safe to do so.'

There's already a similar bill from Conservative Saskatchewan MP Kevin Waugh on the Commons order paper that would make it lawful for a provincially licensed entity to allow betting on a single sporting event or athletic contest.

'Implementing this change would be a massive boost to the tourism, sports, and gaming sectors, as well as a significant win for the workers and communities that rely on them,' Waugh said, calling the legalization 'common-sense.'

'Though I'm encouraged by the government's apparent support for this proposal, I remain skeptical of their commitment to making it a priority,' he said, adding he won't withdraw his private member's bill just yet to ensure the government proceeds with the amendment.

While provinces and territories control gambling operations in Canada, all operators work within the limits of the federal Criminal Code, which addresses gambling regulations and laws.

Burns said the expectation is that the government will simply replicate Waugh's bill (it's a single line) in its own legislation. Government legislation is often easier to pass in Parliament than private member's bills because the government has more levers to pull to get bills through both houses of Parliament in a timely manner.

NDP MP Brian Masse, who represents Windsor West, also introduced a private member's bill in 2016 that would have made changes similar to those the Liberal government is now considering.

The government voted against that legislation, citing major sports leagues' claim that single-event betting might lead to match-fixing. But that opposition was blunted when sports leagues — including the NBA and NHL — partnered with U.S.-based casino operators like MGM Resorts to bolster sports betting in the U.S.

As recently as January, a spokesperson for Lametti told CBC News that gambling law reforms were not an 'immediate priority' for the minister.

Canadians gamble $14 billion annually on sports events

The pandemic has blown big holes in federal and provincial budgets and the legalization of this sort of betting could produce some much-needed government revenue.

An estimated $14 billion in annual sports betting — $10 billion through the black market through bookies and $4 billion more through off-shore online outlets, according to figures from the Canadian Gaming Association — is wagered by Canadians via illegal channels beyond the regulatory control of the government. The biggest draw for these other outlets is the fact that they allow bettors to gamble on just one game.

Federal and provincial governments don't get a cut of the money flowing through these illegal channels, Burns said, and the legislative change will put Canadian casinos and gambling sites on an even playing field with those who already offer these bets illegally.

'Sports betting is such a huge part of the online business. It will really just allow Canadian companies to compete. Everyone will have the same regulatory relationship,' Burns said.

'It's encouraging. The industry has been asking for this for over a decade. Substantial revenues flow to unregulated, illegal operations and offshore Internet sites without providing any financial benefits to Canadians.'

A 2018 U.S. Supreme Court ruling overturned decades-old federal limits on sports betting in states other than Nevada. The result has been a push by state lawmakers — notably in New Jersey and border states like New York and Michigan — to legalize single-game bets at casinos and racetracks and online.

Single-event legalization has unleashed a revenue boom for state coffers already. New Jersey casinos collected $4.5 billion in revenue last year alone.

'Communities like Niagara and Windsor — they're competing with sports betting across border. Now, they'll have a new product to entice customers to come back to their properties when they're able to do so, safely,' Burns said.

News broke last week that single-game sports betting was all but a done deal in Canada. It’s exciting for a country long forced to choose between playing parlay cards or choosing any number of largely unregulated alternatives.

Even before the announcement of an upcoming government-introduced bill, DraftKings CEO Jason Robins talked on the company’s earnings call about the potential growth into Ontario, which would be the sixth-biggest state if Canada were part of the U.S.

The single-game sports betting bill would represent a departure from the country’s long-established ban on single-game betting. Though it is not a done deal yet, it appears likely to pass, finally.

Background on Canada ban on single-game betting

The criminal law system in the United States is split between federal and state jurisdiction. In the realm of gambling regulation, jurisdiction has historically rested with the states, with some notable exceptions like the Wire Act and PASPA.

However, in Canada, the federal government has principal authority in establishing criminal laws throughout the country. Provincial authorities maintain the ability to regulate minor offenses, dubbed provincial offences.

Though not a perfect analogy, one can think of the Canadian federal government as having authority to regulate felonies, while the provinces have the ability to oversee misdemeanors.

Section 202 of the Criminal Code of Canada is the law that currently bans the operation of gambling businesses and forbids single-game sports betting. Section 204 of the Criminal Code created the exceptions that allowed for the parlay-style system that has become popular across the country.

Time for a change?

The last major change to Canadian gaming laws came in 1985. The adoption of single-game sports betting is a position that has been pushed several times in recent years. Indeed, members of parliament from the Windsor area pushed aggressively to legalize single-game sports betting during the early days of the Christie lawsuits in NewJersey.

Criminal Code Of Canada Illegal Gambling Sites

The opposition to legalization came from many of the same parties who sued the state of New Jersey to oppose the legalization efforts in the Garden State.

Back in 2012, many of the major U.S. sports leagues and the NCAA (who has a single member institution in Canada) sent last-minute letters reiterating their greatest hits about why they oppose single-game sports betting to members of Canadian Parliament. That effectively killed bill C-290, which had nearly skated by to its final reading without much opposition.

The 2012-2013 effort was only the first of a number of recent efforts often initiated as private members bills, which historically have little chance of passing, though single-game betting had more support than most private member bills. Even the most recent effort appeared to start as a private members bill until Federal Justice Minister David Lametti introduced legislation seemingly aligning nearly all major government parties in favor of legalizing single-game sports betting.

Legal single-game betting a game-changer?

The hope with single-game betting is that it will provide a boost to the economies of the various provinces that offer the contests when allowed. An economic jump-start for the casino industry in the border city of Windsor has long been a catalyst for the region’s politicians supporting the expansion initiatives.

That issue becomes more pressing with the city’s neighbor, Detroit, having a casino industry that has now legalized Michigan sports betting.

Criminal Code Of Canada Illegal Gambling Winnings

Of course, the success of single-game sports betting is going to depend a lot on what the market looks like, much like we have seen with the rollout of sports betting around the U.S. Some jurisdictions have had great success, whereas others have built systems that are built with obstacles to success, effectively limiting revenues to the state.

What to expect when expecting sports betting in Canada

The first area where single-game sports betting in Canada may appear different (at least at first) than much of the United States is that the provinces currently operate monopolies on the provincial gambling operations.

Not only do the provincial lottery and gaming authorities control the current parlay sports betting offerings across the country, but they also control the casinos and online poker in the province of Quebec.

While the Ontario provincial government released a budget that would allow for private entities to enter a new iGaming space with potential inclusion of sports betting under the umbrella, this has not yet played out. The move would see iGaming fall under the jurisdiction of the province’s Alcohol and Gaming Commission, which oversees a variety of industries including aspects of the horse racing industry and Ontario’s legal cannabis stores.

Not the first rodeo for Canadian iGaming

The idea of establishing an iGaming market previously appeared in the 2019 budget. The process of building an iGaming market in any of the province is likely to be lengthy, with stakeholders on both sides likely to engage in a heated debate.

Ontario, in particular, has a history with efforts to bring privatization to government monopolies (called Government Business Enterprises) that has long been a sore spot, including the privatization of the 407 toll-highway for $3.1 billion in 1999, which in 2019 was valued at more than $30 billion and has been called one of the worst deals ever made.

While this effort would effectively create a new market, as opposed to privatizing an existing market, it is uncertain how this will play out and if it would generate a different reaction.

Private eyes?

Efforts to privatize Ontario’s provincially run monopolies like the LCBO (provincially owned and operated liquor stores) have appeared periodically over time; in fact, both liberal and conservative governments have floated the idea at various times.

Ontario faces a challenge with a recently projected budget deficit of more than $38 billion in 2020 and another $33 billion projected in 2021. Historically, various provincial leadership regimes have looked at privatizing government-owned monopolies like the LCBO and the Ontario Lottery and Gaming Commission (OLGC) to shore up stretched budgets. But this plan is different from traditional models of privatization.

Time will tell whether the Ford government is able to follow through on this aspect of the budget, but it could allow for a U.S.-style online gaming marketplace that includes sports betting if the pieces fall into place.

Room for partners?

Even without a ‘free market,’ there could still be room for private enterprises to participate.

If the iGaming market does not develop immediately and sports betting is instead under the oversight of the OLGC, there might still be room for partnerships.

Ontario previously worked with Caesars World to build and operate a casino as a joint venture, though the province maintains ownership. A similar type of deal could conceivably be possible for sports betting products should the provinces choose to depart from their current sports-based branding of Proline in Ontario, the WesternCanada Lottery provinces and Atlantic Canada, Sports Action in British Columbia, and Mise O Jeu in Quebec.

The other key area for development is the expansion of mobile betting. Provincially-regulated online gaming in Canada remains nascent and has room for growth. A number of provinces still do not allow for the placing of parlay bets online, though both Quebec and British Columbia do allow for wagering online via the lottery retailer websites.

Criminal Code Of Canada Illegal Gambling Laws

Change is coming for sports betting in Canada

After spending years being unable to legalize single-game sports betting, Canada appears poised to finally cross that bridge.

An effort that began as an opportunity to gain a competitive advantage and provide a different product offering in border cities than was available on the U.S.-side has transformed into a need to remain competitive with the products being offered south of the border and through offshore competitors.

While single-game sports betting appears poised to finally be coming to Canada, now with the support of nearly all major professional sports leagues, there are remaining questions as to just what it will look like when it arrives.