Offshore Gambling in Canada
Offshore gambling is a grey area in Canadian law. It’s not exactly legal but it’s not exactly illegal either and the Canadian government doesn’t seem eager to test the waters.
Gambling falls under the jurisdiction of the individual provinces in Canada. Since the Internet is not bound by provincial boundaries, thousands of offshore gaming sites, based in locales such as the Isle of Man, Cyprus and Gibraltar where such gambling enterprises are welcome, operate freely in Canada. Michael Lipton, a lawyer with Dickinson Wright of Toronto and a recognized gaming expert, said that for gamers, there’s nothing in the Canadian Criminal Code that would make it illegal to wager through an offshore site. “As far as I’m concerned, you as a player aren’t committing any criminal offence by being in a position where you are engaged with an offshore operator playing poker, playing slots, or whatever the case may be,” Lipton said.
Yet there are questions about the legality of the online sites accepting bets from Canadians. The situation is even more complicated due to the fact that many of these offshore sites are regulated by the Canadian Kahnawake Commission whose seal of approval is recognized worldwide (more about Kahnawake later).
History of Canadian Gambling
Before Internet gambling began to be available to Canadians in 1994, regulation of gambling activities in Canada was straightforward. All Canadian gambling was facilitated through each province’s Gaming Corporation. These Gambling Corporations operated under the auspices of the provincial governments — generally through the provincial Finance Ministry. The provincial Corporations were responsible for carrying out provincial laws regarding gambling in the province. The Corporation operated the province’s casinos,racetrack slots rooms, bingo halls and lotteries — or acted as the agency that oversaw the companies that ran these venues. Horse racing is the exception in all provinces since horse racing in Canada is regulated by a unit of the federal agriculture department called the CanadianParimutuelAgency.
Starting in 2004 almost all provincial gambling corporations opened their own online sites. Some of these provincial online sites offer hundreds of games, mobile access and other amenities that make it convenient to gamble online in Canada while others are limited to selling lottery products online.
B.C. has been offering sports betting and selling its lottery products online since 2004. In 2009 it added poker and in 2010 it added bingo and other online games. Today the BCLC online casino operates Canada’s only provincial mobile platform.
Ontario, Manitoba, Quebec and Alberta also offer their residents hundreds of games that they can play online as well as online lottery ticket purchases.
The Atlantic Lottery Corporation does not, as of yet, feature online games although residents of the Atlantic region (Newfoundland, Prince Edward Island, Nova Scotia and Labrador).
Saskatchewan is the only province that does not offer online gaming or lottery options of any type.
Even with the easy availability of provincial corporations’ online sites, offshore casinos continue to attract large numbers of Canadian gamblers. Many Canadian gamers play at freemarket sites because they find the house edge of the freemarket casinos (97%) to be more rewarding than those of the provincial sites (50%). Other players appreciate the convenience of the fremarket sites which give players the ability to connect whenever and from wherever they wish. The provincial sites’ online options are available only to bettors who are physically present in the province while they are playing.
The legality of the freemarket gaming sites activities, including accepting bets from Canadians, hasn’t been tested in court yet. The Canadian government doesn’t seem eager to pursue the issue. The legal uncertainties involve the question of whether the Criminal Code prohibits offshore operators from accepting bets from Canadians. To date, no cases have been brought forward against any offshore gambling operator and it seems unlikely that it will happen in the near future. International extradition and other political and legal issues — including the claims of the Kahnawake First Nation of Quebec, which operates the Kahnawake Commission — are the major reasons that prevent the Royal Canadian Mounted Police from pursuing legal action.
Kahnawake Gaming Commission
Online casino players around the world rely on the Kahnawake Commission as a regulatory body that monitors online casinos’ ability to provide fair and secure gambling options. The Kahnawake Commission is facilitated by the Kahnawake Mohawk First Nation.
As a First Nation, the Kahnawake peoples of Quebec are able to operate their commission, one of the world’s largest online gaming hosts, in a legal no-man’s-land. Canadian law gives First Nations a great deal of autonomy in running their own affairs. The Kahnawake Commission describes its activities as “the official licensing and regulating authority for gaming activity within and from the Mohawk Territory of Kahnawake.”
Canadian legal authorities are reluctant to challenge the online gaming sites that operate under their auspices. Since Canadian authorities tip-toe around Kahnawake-approved sites, they see no reason at present to go after other freemarket casino sites.
The legality of the Commission’s activities is not clear, even within Canada. But more importantly, the 50 online gaming operators who represent 250 online gaming sites are protected by Kahnawake for their Canadian online gambling activities.
For now, Canadian online casino gamers don’t need to worry about their freemarket casino activities.