Online Gaming Laws in Canada

Online gaming is quite a new phenomenon; it has only been in existence for just over a dozen years. This industry has however grown into a well-organized; security-obsessed one that does a good job of self-monitoring. There is quite a lot of money at stake in this industry. With revenues clocking over 20 billion worldwide in 2011 and projected to surpass the $500 billion mark by 2015, the industry has brought itself some respectability.

Online gambling, both in Canada and many other places all over the world has experienced rapid growth with new sites popping up every few days. Legislation on the issue of online gambling is quite sketchy and a little unsure truth be told. Most sites exist on unclear legal terrain.

The growth of online gambling has seen different countries develop different approaches to legislation. The UK for instance has taken the taxation and regulation approach. The Gambling Act of 2005 was set up to allow operation of online gambling sites in the UK as long as they are regulated and taxed under law. In the US however, the opposite route has been taken. The government has made attempts at eliminating online gambling, indirectly, by making gambling transactions using US credit cards illegal. Canada however has not moved policy in either direction. Online gambling in Canada has been in a bit of grey area we might say. Until the 1960s Canada was always anti-gambling, but after this, the government granted the decision to legalize gambling to individual provinces. This led to the construction of casinos and lotteries in some areas. Whether or not these changes legalized online gambling is a matter of speculation. However for now you may be able to enjoy online gaming without bother from the government.

Important facts on Online Gambling Legalization in Canada

1. The criminal code

Although part 4 of the criminal code makes operation of commercial gaming enterprises an offence, it was only enacted to deal with the traditional forms of gambling. However, in some provinces this has been applied to many forms of internet gambling. The wording might be a bit more complicated than this but the general perception is that this code does not make it illegal unless it falls directly under recognized sections of the code. This is the basic premise upon which online casinos continue to thrive legally.

2. No Charges

One fact that stands out is that the courts in Canada have never charged a single person with the crime of online gambling. The closest scrape that this industry came to with the law was when the attorney general declared all poker rooms in Indian reservations and servers hosting online casinos to be illegal. However, since the proclamation was made, no charges have been laid and the servers continue their operation within Canadian borders.

3. Canadian law and United States law

While Canada has regulations allowing provinces to license online casinos, the US does not grant its states the rights to run gambling sites. As mentioned above the US has in fact tried to stifle online gambling through some prohibitive laws. Canadian laws give their provinces the right to allow, license and operate casinos as they please. Both British Columbia and Québec governments now run gaming casinos.

4. Poker

Well, if you are a poker player, you are aware of the numerous online poker sites available in Canada. Other than the sites hosted on Indian reservations, none of these sites are hosted from within Canada but this has not hampered their availability. No laws have been passed prohibiting people from gambling on these sites therefore making them not necessarily illegal.

5. Sports Betting

Under US law it is a legal offence to bet on sporting events online but this is not the case under Canadian law. Canada allows parlay bets of over three matches only. However, efforts are being made to have this restriction removed from the criminal code thereby permitting betting on single sporting events. More information on this restriction can be found in The Criminal Code.

6. Taxes

Tax laws in Canada, with regards to online gaming are closely similar to those in the United Kingdom and Ireland. The tax laws dictate that proceeds gained from betting cannot be taxed unless they are deemed to have been gained through transactions that are business oriented. If for instance you are a professional poker player, then your winnings may be taxed, otherwise if you are just playing for fun, then your proceeds should be tax free.

Regulatory Authorities in Online Gaming

gaming commissionRegulatory bodies are generally there to ensure that stake holders in a given industry uphold fair play. In gaming, they are there to ensure that casinos conduct business fairly. These regulators govern the bookmakers and deal with any arising issues. Should a site break any of the set regulations, the regulatory body has the power to pull its license and make it cease operations.

Currently, online gaming regulation is done by individual provinces. The Kahnawake Gaming Commission governs all gambling activities within the Mohawks’ reserve basing on sovereignty. Canada’s constitution recognizes the activities of the Mohawks, (read, gaming) as an aboriginal right and therefore the KGC is well within its ambit to provide regulation of the same in the reserves. These regulations follow three principles: that operation within Kahnawake is only limited to suitable persons and entities; that the games on offer are fair and that winners are paid.

The question of whether playing online is illegal still remains unclear. Until concise and clear laws are enacted, people still continue to play at online casinos every day. Considering that no one has ever been prosecuted, besides that fact that shutting down a casino would be impossible without a well structured set of laws, operation of casinos still continues within many jurisdictions.

The bottom line therefore, is that you will not get in legal trouble for gambling online in Canada. Before playing at a casino, it is always prudent to double check their legality and track record. Online gaming however, will not get you into legal trouble.