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For many years now, Canada has been considered to be a ‘grey market’ for the big casino and sportsbook operators from Europe and the US. Whilst the regulatory framework in the country allows only the governments or each of the ten provinces to run their own lotteries, land-based casinos and fixed-odds betting websites, private companies based outside of Canada have also been able to take bets from Canadian citizens with impunity.
This set up has allowed powerhouse operators licensed in the European jurisdictions of Malta and Gibraltar, or even the independent Mohawk territory of Kahnawake, to establish a presence and draw revenues without taxation or the increasingly prohibitive restrictions imposed by regulators like the UK Gambling Commission.
But is all that about to change?
In their November 2020 budget, the conservative government of Ontario, led by Doug Ford, announced plans to allow the Alcohol and Gaming Commission of Ontario (AGCO) to regulate online gambling and issue licenses to private gambling operators.
Whilst this is not the first time that this plan has been put forward – it appeared in the November 2019 budget as well – the COVID-19 pandemic has brought fresh impetus. Taxation from online gambling revenues is seen as an important opportunity to cover the huge shortfalls that have resulted from a drop off in economic activity and high unemployment that is expected to continue well into 2021 and beyond.
So, how would the gambling market change for Canadian players?
Currently, if you are based in Canada and you want to gamble online you have two options. Either you can choose to play at one of the state-fun sites like PlayNow.com, run by the British Columbia Lottery Corporation, or you can play at one of the many off-shore sites that keep their doors open to Canadian players. Trusted gambling listings sites like The Casino Heat show that there are many big brands that do this, including big names from Europe like Casumo and Play OJO.
Were Ontario to start the ball rolling and issues licenses to these operators, allowing them to take bets legally and advertise real money betting on television, then the upside is that likely there will be more choice for the consumer. More betting companies would be prepared to establish themselves in a regulated market, assuming the conditions are not too prohibitive, than there are those who want to operate in a grey market where the future can be less certain.
For those players who have shied away from the offshore brands because of their ‘grey’ status, having these operators under Canadian license would be a positive change. Generally these casino sites offer a wider choice of games and a better range of incentives than their Canadian state-run rivals, as the marketing departments are very adept at acquiring and retaining players, having honed their skills in the hugely competitive markets like the UK.
Better consumer choice can only be a good thing, but what about the operators? How would they fare in a new regulated environment? Regulation brings the downside of taxation which would likely be in the region of 15% to 20% of Gross Gaming Revenue. And also more hoops to jump through as regulators attempt to tackle the issue of problem gambling. However, some may believe that operating with a limited number of other licensed businesses would signal a more stable future in the Canadian market and they are welcoming the change.
We are still in the early stages of regulation of the Canadian gambling market, so we should not expect change to come too quickly. However, the signs are there, and whilst for now it is business as usual, both operators and consumers should be ready for some interesting developments over the next five years.
