Legal Situation of Online Gambling in Canada

By  //  January 12, 2021

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Online gamblers who wish to check the sites in Canada may be curious about the legal situation of online gambling in Canada. In general, it is illegal in Canada to use an online casino without a license. Still, Canadians can play in any offshore Casino without a license.

As a matter of fact, the turnover at offshore casinos was C$392 million in 2019, with a projected growth of C$451 million in 2020.

Canada vs. U.S legal situation of online gambling

It is clearly unlawful to operate an online casino/gaming site from within Canada without a license under Canadian law (i.e., legally officially registered, playing servers based there). However, no laws explicitly addressing offshore gaming sites exist within the Criminal Code of Canada.

This is the biggest contrast between Canada and the U.S. The 2006 Unlawful Internet Gambling Enforcement Act prohibits banks and other payment processors from transacting with offshore gaming sites at U.S. offshore casinos. Virtually all reputable gaming sites have withdrawn from the United States to remain on the right side of the U.S. authorities after the act’s passage.

No specific legislation in Canada applies to offshore gaming sites/companies, so the majority of them are very glad to accept Canadian players.

The reformed 1970 penal code opened up the opportunity for gambling by the authorization of gambling by the individual jurisdictions within Canada. This has resulted in the establishment by the provincial gaming authorities of a number of terrestrial casinos and lotteries.

Particularly noteworthy is that many of them operate their own gaming portals with casino games. We do not recommend them to be of a lower quality than offshore sites concerning their game range, quality, and bonus/promotions

The Kahnawake Commission: An odd anomaly is the Kahnawake Commission. The territory in the Mohawk area of Kahnawake is situated in Quebec and saw Online Gaming’s promise in 1996. The Mohawk Commission is not obligated by Canadian law as an Indian reservation and therefore holds a sovereign legal entity and has the competence to authorize and control offshore online gaming sites.

The Kahnawake Commission was formerly a common licensing body, licensing many of the earlier Microgaming brands. However, in recent years, several e-gaming companies/sites have disregarded this commission, preferring licenses by the gaming authorities in Malta or Gibraltar.

What future legal developments in online gambling in Canada can we expect?

No one really knows essentially, and it seems that all parties involved have an attitude of ‘waiting and seeing.’ At present, the government has shown no intention to tighten the rule, clearly stopping Canadians from playing offshore sites amid tax revenue losses.

Similarly, a completely legalized ‘white market’ in British style where offshore websites operate on the same legal base as the websites operated by the province’s gaming authorities is also unlikely, especially as their superior ‘offshore’ gaming sites will lose out to provincial gaming authorities.

The Canadian government’s attention to other risks and regulations seems to be continuing the status quo. Thus, making Canadian players free to keep playing at a wide variety of international casino sites.

You need to know four primary things

■ There is no legal risk for Canadians playing in an online casino site, playing for fun, or part-time work

■ There has not been a conviction of a Canadian citizen for playing online gaming (casino, poker, or sportsbook)

■ It is not possible to run an online casino without a license within Canada.

■ All wins from gambling are not taxable except if you regard your gaming operation as an employment type based on skill, frequency, and expectations of pay-outs – winnings are not taxable for gamers who play for fun at an online casino

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