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Canada Foreign Online Gambling Licenses Could Be Coming Soon

Written by:
Payton
Published on:
Dec/01/2014
Canada Foreign Online Gambling Licenses Could Be Coming Soon

In Canada, all online gambling issues are handled on the provincial level. What this means is that the federal government doesn't have much say in what goes on, and as an industry, the goal is to use it to pad provincial revenue figures. One problem with this approach is that foreign operators who are not licensed by the provinces and who are not paying provincial taxes are able to operate more or less freely while the province-operated games suffer.

There are two ways to think about this problem. The first way is to squeeze out all competition by prohibiting foreign companies and operators from offering services inside of Canada. The idea here is that it would only leave the government-operated games for players, and the government could increase revenues that way. One problem with this approach is that you aren't guaranteed that players who leave games with foreign operators will convert over to government-backed ones. Another problem is on the technology side of how do you actually block these sites without forcing blocking policies on Internet service providers, something that is very hard to pull off politically.

 

Another way to tackle the problem is to simply offer licensing deals to these foreign operators in exchange for licensing fees and other taxes. This would allow the provinces to regulate the games by setting their own rules for how things should be ran, and this could help the players and provide funds for programs to prevent underage and problem gambling. A major problem with this approach, at least politically, is that it would make it look like the foreign operators "won" over the games offered by the provincial governments.

 

Something that largely complicates this matter is the fact that the Amaya Gaming Group has its headquarters in Montreal, Quebec, and they have a vested interest in trying to keep as much of the market to themselves as possible. They have the means to influence politics in some major ways, and nobody really knows how they're going to go about influencing this particular debate since they haven't tipped their hand yet, so to speak.

 

A recent opinion piece featured on Grizzly Gambling showed some big advantages and disadvantages for each approach. In the long -run, it would seem like the government-backed games could earn more money through a larger market share if they squeeze out the competition by force of law. On the other hand, this could backfire since it's very hard to get accurate projections for increased revenue in a scenario like this, and this has got to really spook politicians who don't want to be seen as taking incredibly bold action only to be proven wrong in a major way.

Licensing foreign operators is probably what's best for the players and the industry as a whole in terms of increased competition and allowing the provinces to earn from the current players in the current games. The disadvantage to this is that it effectively shows that a lot of the money put into government-operated games was a waste. While an abundance of wasteful government spending isn't exactly news to anyone, the fact of the matter is that this could cause some major resistance to getting a foreign licensing process started.

 

Ultimately, money is what's going to determine which way Canada goes with this. If the politicians believe that there's more money to be made in licensing the foreign operators, then that's what will happen. And if they believe the most money is going to be made by pushing out the foreign operations, then that will be the course of action that is taken.

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