October 1, 2023

The Rise Of iGaming In Canada

The Rise Of iGaming In Canada

The Story of Canadian iGaming

Canadians are avid bettors, both at online casinos and sportsbooks. Here’s how iGaming has grown up in Canada, including some recent legal developments to the benefit particularly of sports bettors.

What is iGaming?

Video games are a business sector that today dwarfs Hollywood and is considered eGaming, whereas betting on either games of chance or sporting outcomes is considered to be iGaming. In recent years this sector has grown dramatically both in Canada and the world generally, aided by the advent of the internet, the smartphone, and seeing a spike of growth during the 2020 pandemic lockdowns when millions of people were consigned to staying at home with other distractions (such as sport) off the recreational agenda.

Domestic Canadian Casinos

While some Canadians have played at offshore sites in the past, many seeking legal online casinos now take advantage of the option to choose from legal Canadian operators over foreign betting sites. Not only are domestic casinos with Canadian licenses places that can be trusted, but there’s also the reassurance of them operating under Canadian laws, and the guarantee that play can occur in CAD, rather than having to worry about exchange rates. As an added bonus, some sites also offer sports sections focused on Canada’s most popular sporting competitions.

Size of the Market

The size of the overall Canadian gambling market in 2021 is thought to be around US$12.54 bn, which is actually a decline from the US$12.75bn of the previous year and from US$14.97bn in 2019. However, this short-term trend of decline has to be seen in the context, which has mostly been one of varying legal situations in the USA and Canada. Contrary to historical precedent, the US embraced online betting and started, on a state-by-state basis, opening up both online casinos and single-event sports betting.

Because there is vast overlap between the top sports north and south of the border, Canadians into sports or online betting could easily wager on their favorite leagues with single-event betting at US sites. This has recently led to comparable changes in Canada’s legal situation, with politicians keen to keep gambling revenues and not risk the US gaining the benefits of wagering Canadians.

The Legal Situation

Canada has, until recently, had quite an odd set of laws regarding betting. The matter was devolved to provincial authorities, with most permitting land-based casinos and parlay sports betting. A parlay bet is a multiple or accumulator bet with numerous stages, each of which must come off for a payout. This increases winnings but also makes the odds on collecting much, much longer than single-event sports betting. Online betting was a grey area, with most Canadians simply opting to play online at the casinos of other countries.

There were very few online casinos based in Canada, and sports betting was heavily restricted. Aside from provincial authorities, only the Kahnawake Gaming Commission could grant licenses to online betting sites.

It’s ironic that a major driver of recent changes to open things up came as a result of the USA (historically far more puritanical on such matters) getting there first and drawing Canadian bettors to play at online casinos and sportsbooks south of the border. To try and head this off and retain revenue, single event sports betting was legalized by Bill C-218.

The Domestic Rise of iGaming

For much of the recent past gambling was entirely forbidden within the country, and provincial gaming regulation only came into being in 1985. The majority of provinces did allow a range of betting activity, including casino games (like blackjack, craps, and slots), sports betting on events like the NFL, and lotteries, which did make the slow acceptance of online betting seem peculiarly reticent. Online betting was not expressly illegal, and there was a strange grey area that saw many Canadians betting legally at offshore betting sites, (and some opting for the black market). Obviously, the latter was without any sense of legal protection, and both meant the revenue never went to Canadian coffers, instead benefiting either foreign states or the underworld.

In 2018 and 2019 the USA started (on a state basis) liberalizing its legislation, which helped kickstart the Canadian legal moves that finally allowed single-event sports betting (a far more convenient way of wagering than the hitherto parlay only approach). Even most of those not especially enthused by iGaming appreciated the obvious upsides of permitting single-event sports betting, which improved protection for players as well as moving funds from overseas or criminal hands to the Canadian treasury.

Canada has been slower to fully embrace online betting than it was the real-world variety, but the period of a grey market appears to be fading.

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