Industry Reports

Industry Insiders Warn Canada May Lag Behind in the Wake of US Sports Betting Legalization

Canada should reconsider its stance on sports wagering unless it wants to lag behind its neighbour in the south, industry insiders have warned in the wake of sports betting legalization in the United States. On Monday, the Canadian Gaming Association said in a press release that it welcomes the US Supreme Court decision to revoke the decades-long ban on sports betting in the country, but it also pointed out that Canadian legislators need to take action to enable local business to compete.

Even though sports betting on single events is not allowed in Canada, punters in the country spend billions in illegal bets, fuelling offshore operators and quickly growing underground sportsbooks, according to Paul Burns, President and CEO of the Canadian Gaming Association. Often operated by organized crime syndicates, black market bookmakers take in approximately $10 billion in illegal bets each year, the Canadian Gaming Association explains. In its official comment, it also says that Canadian customers also wager more than $4 billion annually in offshore sports betting sites. In comparison, only $500 million a year is wagered in legal sports wagering lotteries, which means that most punters in the country turn to shady and sometimes dangerous sites to enjoy their hobby.

And while customers in Canada place bets in illegal sites without any fairness guaranteed and no legal protection, their neighbours south of the border will soon have access to licensed and fully regulated sportsbooks. On Monday, the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act (PASPA) in a 6-3 ruling. As a result, sports betting is no longer illegal on the federal level and individual states can decide to either ban or allow it. So far, 18 states have already prepared or even introduced legislation to legalize sports betting operations. This puts a huge pressure on the Canadian gambling business and the operators, in particular, who certainly will be affected by this important development.

According to Burns, the economic impact on Canadian gambling operators, suppliers, and other businesses will be significant. The association he speaks for represents the interests of various companies in the gambling industry, including key players such as Gateway Casinos and Entertainment, The Stars Group, The British Columbia Lottery Corporation, Scientific Games, Novomatic, IGT, Konami, and more.

What Can Be Done So That Canadian Gambling Industry Can Stay Competitive?

The Canadian Gaming Association has already supported two proposals that aimed at amending the Criminal Code and allowing sports wagering on single events. Currently, provincial associations can take parlay bets, or in other words, bets on more than one game at a time, while single-game wagering remains illegal. While provinces have the jurisdiction in this matter, they are not permitted to allow this type of bets, which in the United States, were available only in Las Vegas until Monday. The national government, on the other hand, seem to ignore a multi-billion-dollar market, while due to the active prosecution, offshore and illegal operators consider Canada a legal “grey area”.

As a result, Canadian punters place bets on websites based in places such as Gibraltar, Antigua or the Isle of Man. Once US gambling operators launch their sports betting products, customers from Canada are even more likely to bet illegally on American sportsbooks. Some experts believe that thousands of Canadian punters will also travel south of the border during championships and sports seasons. The popularity of sports betting will grow even more, while there will be no legal options for fans who want to bet on their favourite sports clubs and teams.

In the latest Canadian Gaming Association release, Burns says that seven years ago, provinces wanted an amendment to the Criminal Code which would provide better consumer protection, regulatory oversight, and protection. He now urges the Government to make this simple amendment and allow wagering on single sports events. In an email to a local media outlet, the British Columbia Lottery Corporation also admitted that the legalization of sports betting in the United States would likely “stimulate interest” in this type of wagers in Canada. Moreover, experts point out that the entire sports betting landscape has changed – from sponsorship to risks such as match-fixing and gambling addiction. All this will influence the Canadian market and although quick legislative changes are highly unlikely, lawmakers at all levels need to consider what the US Supreme Court ruling would mean for Canadians.