Industry Reports

Is Canada Online Gambling Industry’s Integrity Threatened by Sports Betting or DFS?

Last week, the Quebec Superior Court overruled the controversial attempts of the province to impose a ban on local residents’ access to online gambling services being offered without an official permission by the state-run gambling corporation. In 2016, the Quebec province adopted a price of legislation under which Internet service providers were required to ban local citizens access to gambling websites that were not officially approved by Loto-Quebec.

So, could the ruling of the Quebec Superior Court give some hope for the future of online gambling in Canada, despite the rumors that digital gambling services in the country could face a potential crackdown? In fact, online gambling has been lately flourishing in Canada, thanks to more relaxed gambling legislation which has provided operators with a rather liberal environment.

As a matter of fact, the rumors related to online gambling crackdown were mostly related to the so-called Bill 74, which was announced as unconstitutional by the Superior Court of the Quebec Province. It was the Canadian Wireless Telecommunications Association (CWTA) which challenged the piece of legislation in court and argued that the Province violated federal competences by rolling out such a bill. The piece of legislation was initially forged as a way to put some limits on overseas iGaming operators to hurt the revenue generated by the online gambling industry in Canada. According to some estimates, the online gambling industry of the country accounted for a total of CA$17.3 million last year.

In spite of the fact that the state-run Loto-Quebec has been pushing very hard for the bill to take effect as soon as possible, the proposed measure has not managed to gain as much momentum as gambling corporation would have hoped for until it was finally overruled by court’s decision. Experts have previously explained that in case that the Quebec Superior Court gave the not to Bill 74, its decision would have set a precedent providing Canadian provincial government with the chance to restrict Internet access in Quebec, which could have pushed other provinces to follow the lead of Quebec, too.

Could Ottawa Consider Legalizing DFS Services in the Future?

Despite the fact that the status quo of Internet access, and online gambling, respectively, was kept intact by the Quebec Superior Court, there have still been some concerns regarding online gambling operations’ future.

Last year, a gambling researcher has called for the provincial lottery corporations which offer their services in Canada to enter the controversial business of daily fantasy sports (DFS), saying these corporations would be best able to regulate the services which have been considered an illegal form of gambling in some US states. According to the researcher, the provincial governments of Canada were best equipped to regulate the DFS activities as a form of gambling and lend their knowledge and expertise when it comes to law enforcement, age and identity verification, voluntary daily limits and self-exclusion programs.

The year 2018, however, has changed the legal landscape of the US, too, especially when it comes to sports betting. A few months ago, the US Supreme Court has ruled in favor of the state of New Jersey in the latter’s sports betting case, with the court’s decision finally lifting the nation-wide ban on sports betting operations. As a result, an increasing number of US states have been engaged in legalizing sports betting and daily fantasy sports betting options to take advantage of the additional revenue flow that could be generated by the addition of the new gambling options.

So far, the federal government of Canada has demonstrated little interest to exploit the benefits that could result from legalization of daily fantasy sports. What is more, even if the federal government considered the addition of such gambling options, it has prosecuted websites with servers in Canada, which basically strips most DFS providers of the chance to offer their services in the country as they do not have such.

Last year, the British Columbia Lottery Corporation (BCLC) shared that it was aware of the popularity of DFS but also said that it had no plans to offer such services on its website for the time. Still, the Corporation explained that it would be keeping a close eye on the DFS issue.