Online Gambling in Canada
Online gambling has always been seen as a gray area in Canadian law when it comes to its legality, especially so when considering the diverse opinions from around the world surrounding legal gambling. However, in the last year, there has been a few provinces that started their own online gambling casinos and that is seeing several of those attempting to suggest that offshore operators are operating illegally, yet there is nothing in Canadian law that supports this. The reality is that legal online casinos in Canada do exist, but it’s far more confusing in reality and to date, the Federal Government has yet to enact any specific legislation in relation to online gambling. Whether that will change in the near future is yet to be seen but some suggest that it will come and that has seen several operators such as NetEnt exit the Canadian market.
Important Facts on Canadian Gambling
There are a number of important facts that need to be considered when it comes to Canadian law and how it relates to online gambling. It’s illegal to be found in a betting house or to run one according to the Criminal Code of Canada. However, as this is considered an outdated law, it’s impossible to apply this code to online casinos or online betting houses without further clarification. In 2012, the first fully legal online casino was launched in British Columbia with casino games and poker offered to residents of British Columbia. Based on this, we decided to look at a few areas with hopes of providing some clarification.
The Criminal Code: There were no such thing as legal Canadian casinos between 1892 and 1969. In fact, you were not allowed to gamble on anything at the time other than raffles, charity lotteries, and horse racing. However, in 1969 a decision was made by the federal government to allow all Canadian provinces to hold their own lotteries as this appeared to be a great way for various local projects to be funded. In 1985, the federal government made another decision to delegate full control over gambling to the individual provinces, meaning each province had control over gambling laws in its province. Unfortunately, the federal criminal code did not change and merely added more confusion to the issue.
Sports Betting: Canadian law, where the criminal code is concerned, permits parlay bets of 3 or more matches instead of only single matches. There is an effort in motion to remove this restriction from the Criminal code to permit wagering on single events.
Poker: There are numerous online sites offering poker within Canada. While none of the sites are hosted within Canada, other than those hosted on Indian servers, there has not been any laws been passed to prohibit Canadian player from gambling on such sites.
Taxes: The tax laws in Canada dictate winnings made from gambling are not taxed unless it’s seen as a form of employment based on the expectation of payout, skill, and frequency of play. Should you be a professional poker player, there might be taxes involved, but for those who play for fun, winnings will be taxed.
Casino Operators Offshore
The majority of casinos that operate online, do so in countries that are friendly to operators and generally these are offshore operating in Malta, Costa Rica and other countries. The fact they are identified as “offshore” is a bit confusing as a large number of offshore casinos are situated within the Canadian borders; technically falling under their own jurisdiction as they are hosted on Native reserves. For example, the Kahnawake Mohawk Nation located outside of Montreal started the Kahnawake Gaming Commission in 1996 and offers gaming licenses to online casinos providing a loophole within the Criminal code. This allowed numerous legal Canadian online casinos to operate successfully and for Canadian players to play freely online.
The Future for Legal Online Casinos in Canada
There’s no certainty what the future holds for legal online casinos in Canada due to the government being fairly hesitant in altering the criminal code from how it currently stands. Evidently, legalizing online casinos in Canada would be beneficial by pumping money into the economy of Canada and arguments for legalization and regulation are strong. In all likelihood, Canada will ultimately have a liberal form of regulation where online casinos will be regulated but will still be fully legal as long as they maintain certain restrictions and pay taxes on income generated from Canadian players.
Gaming Authorities and Regulators in Canada
As it stands, each province regulates its own gambling sites online in Canada. The Kahnawake Gaming Commission also operates inside Canada but is considered its own governing body, technically speaking. This commission not only regulates Canadian casino sites and operates its own servers, but is also considered the most-used regulator for online casino sites around the world.
The question of getting in trouble for playing online will remain unclear until certain laws have been written and passed. Due to the fact that this could take some time, most people still play at an online casino on a daily basis. As far as research shows, no one in Canada has ever charged with playing at an online casino in the past. Even if a casino cannot operate in your jurisdiction due to what a specific law states, most online casinos operate outside of the countries jurisdiction and it will be near impossible to shut all of them down without a law pertaining to same in place.
If you reside in Canada, playing at an online casino is legal. The worry about facing legal issues for playing or paying taxes on winnings is mute as the laws do not apply to either of these areas. While British Columbia recently sent out letters in attempts to suggest that those allows B.C residences to gamble at their casinos will face legal troubles, the reality is B.C has no standing on this and will be unsuccessful based on Federal Law and this has been confirmed by experts on Canadian law.