Canada Losing Billions in Gambling Taxes


Written by Geraldine 9 June 2017

Gambling taxes lossRecently, we stated that the crack-down on DFS gambling regulations was driving the industry to Canada which could prove profitable for the country. However, it seems that no action will be taken in order to benefit from the increase in gambling and betting. Primarily, this is due to the reluctance on the part of politicians to support any bill in favor of gambling. But the lack of gambling taxes imposed on betting and gambling in CA is allowing billions to slip from under the government's nose and straight into offshore companies. Read below for more.

Increase in gambling and sports betting

Gambling Taxes
Statistics from 2007, a decade ago, state that gambling is a $13 billion industry in Canada. That's including betting and gambling in land-based casinos as well, though. Still – over ten years later and with recent developments – that figure must have shot up. Since 2007, the online casino scene has grown beyond anyone's wildest imagination and spread into several different markets. Due to the U.S strict impositions on DFS (daily fantasy sports) betting, popular companies like DraftKings and FanDuel are likely to be looking into other avenues, like Canada, to grow.

Even now, recent reports have found that $4 billion a year are invested in offshore sportsbook casinos located in Europe and other countries. These offshore sportsbooks are mostly located in places like Antigua, Malta, Curacao, United Kingdom, Gibraltar and Isle of Man. These $4 billion are completely gambling tax free because of the lack of regulation surrounding offshore betting. In comparison, the provincial sports lotteries only make $500 million a year. Something which some individuals have sought to change.

Proposed bill gets rejected

Gambling taxes
In 2016, Brian Masse, an NDP MP, attempted to push forward a bill that would allow Canadians to bet on single games at their provincial lottery offices. This would also allow the government to monitor, regulate, and of course, tax most Canadian sport betting. Of course, this pertains very much to ice-hockey games especially during peak NHL season. Even though it is by far Canada's most successful and most followed sport, Canadians spend more betting outside of Canada then they do investing it in their own country. Masse's bill wanted to make it possible for Canadians to bet on individual games locally.

Unfortunately, the bill was blocked in September of last year. This is another opportunity lost, but even if it did pass – it still wouldn't have changed anything about the regulation of online gambling and online betting. Provinces need to produce and enforce these themselves, which is a laborious and fragmented process.

Current situation

As it stands, the $4 billion per year invested just in offshore sportsbooks is still going completely to the offshore companies. Even in companies like DraftKings and FanDuel decide to set-up shop in Canada, it's unlikely that the economy will see a boost from the revenue they bring with them. In order for this to happen, provincial governments need to resolve to officially regulate and tax all sports betting and gambling. This requires politicians to admit their support of the gambling industry to some extent, however, and is unlikely to be happening anytime soon. As a result, Canada will continue to lose out on billions in taxes.

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