Just as the US has opened up a regulated gambling market in the last three years, so Canada is preparing the ground for legal online and offline sports and casino betting in 2021. Many are welcoming the opportunity to give more choice to consumers and raise much needed taxes as the world emerges from the pandemic, whilst others are nervous about the dangers of problem gambling. In this article we assess the risks and rewards of a new regulated gambling market in Canada.
What Does a Regulated Gambling Market Mean?
Right now online gamblers in Canada can bet in two ways. They can choose to bet at the provincial government sites like PlayNow.com, of which there are few, or play at the offshore casinos and sportsbooks run by operators licensed in the European jurisdictions of Malta and Gibraltar. With most preferring the latter options – the products and range of sports markets are considered to be better – the Canadian government is missing out on a lot of tax revenue.
Under new regulation that became possible with the passing of Private Members Bill C-218 in summer 2021, not only is single event sports betting now legal in Canada, but private gambling operators will now be able to apply for licenses to take bets in the country. Just as in the US this process happens state by state, so in Canada each Province will have its own licensing body and procedures. And as well as sportsbooks, online casinos are also set to be invited to apply to operate in the country.
For punters, this means much more choice in the years to come. For the government, this means a huge opportunity for tax revenues. This is the reason most countries run regulated markets. In short, its widely accepted that gambling will take place anyway, though offshore sites, so why not bring it under the law, tax and regulated it?
What Will a Regulated Market Do For Canada?
There are many reasons to believe that Canada is making a good choice by regulating online gambling. Other countries that have done so successfully include the UK, Sweden, Spain, and now the US, which has already shown significant growth since it opened up its doors to legal sports betting in 2018.
The global online gambling market is expected to reach 100 billion US$ in 2026 and Canada’s is estimated to be worth around $5 billion CAD at the same time.
Currently, much of this revenue is finding its way into the bank accounts of gambling operators based in offshore territories where no tax is paid. Under a new regulated market, all this will change and the government of Canada can start raising funds from money wagered at privately owned online casinos and sportsbooks licensed from within the country. This is much needed at a time when all governments are burdened with huge debts following the COVID 19 pandemic which stopped many businesses from operating and pushed many workers into unemployment.
For the consumer there are some big advantages to gambling at legal and trusted online casinos licensed in Canada. Now there will be a much greater choice – up to this point there has only been a handful of government-run sites. And with that will come better value as onshore casinos compete for business, offering better bonus deals and higher quality products.
Should We Be Worried About Problem Gambling?
Of course, not everyone agrees with the strategy of regulation. Gambling can be highly addictive and creating a safe environment for gamblers is key to making it work.
To assess the potential issues arising from online gambling we only need to look at the debate currently raging in one of the biggest regulated markets in the world, Britain. The UK made gambling legal under an act of parliament in 2005 and a subsequent act in 2014. There 1000s of online casinos and sports betting sites where punters can spend their money and currently the remote sector generates around £5.7 billion in revenue annually for private firms, and around £2.7 billion in taxes for HMRC.
Despite the obvious advantages of raising such huge tax receipts each year, there are many who believe the law needs to change and greater restrictions be placed on betting companies. Indeed, a review of current legislation is currently taking place and a new gambling act expected in 2022. Campaigners want to see new deposit and wagering limits, affordability checks and greater fines for operators who allow gamblers to rack up huge debts by gambling £1,000s per day.
It is not yet clear how a new gambling act in the UK will look. Some have suggested that deposit limits of £100 per month should be set, with affordability checks required to be carried out before these limits can be lifted. However, affordability checks come with their own controversies as they require operators to request very personal information like annual salary and personal savings. Many big gamblers would likely be unhappy to provide such information and may stop playing at regulated sites altogether.
The issues currently begin debated in the UK make an interesting case studies for law makers in Canada. If this country is to get its regulated market right it will need to establish a balance between responsible gambling and the right of the individual to spend their money as they wish. Self-regulation is great in theory, but private companies will always seek to maximise profits, and in the case of gambling this can be at the expense of any duty of care to its customers.
Regulators would do well to keep an eye on the established European markets like the UK, Sweden and Spain to see how different approaches work as they seek to build a safe and fair gambling market that works for punters, businesses and tax collectors alike.
In conclusion, Canada is opening up a regulated market that brings huge opportunities and benefits for all involved, but it comes with some risks attached. In order to minimise the damage caused by problem gambling Canada must ensure that it demands that its licensees adopt adequate levels of responsible gambling measures. The next few years will show how successfully this strategy is carried out.