Historically and arguably still today, Canada has a complex relationship with gambling. For the most part, gambling was heavily restricted and illegal, including sports betting. The state ran some legal forms of gambling, and native peoples were given permission to implement their own gambling rules, making these tribes the only avenue into a legal Canadian gambling market.
Aside from the limited number of legal (state-owned) gambling operators in Canada, two other markets emerged. The black market which comprised of illegal casinos and bookmakers operating underground, either in makeshift casinos or online. Criminal organisations and gangs often ran these illicit casinos.
The other market that emerged is known as the grey market. Although it was illegal to offer gambling services onshore, there was nothing to stop Canadian residents from using online casinos and sports bookmakers abroad that were operating legally overseas. They could use these sites to access a range of sports betting markets, from a huge spread of NFL betting options to NBA and Premier League betting. This made up the grey market where punters used legal and legitimate casinos, just not legalised in Canada.
New Canadian sports betting laws
To prevent funding criminal organisations through illegal casino businesses and generate more tax from operators, Canada has decided to shake up its sports betting laws and permit single-event sports bets, such as an individual game or race. The decision to legalise sports betting will be left to individual provinces, similar to how the US has recently legalised sports betting and left the final decision down to states. It’s anticipated that widescale legalisation could create a $25 billion market.
Legalising Canadian sportsbooks – who wins?
The primary beneficiaries of a new legal sports betting market in Canada are Canadian residents. Players won’t be forced to use illegal casinos or the grey market, which can lead to issues with depositing, winnings, and even experiencing scams. The next victor of these changes is undoubtedly the Canadian Government which could raise hundreds of millions of dollars in taxes from these rule changes. Not to forget that state-owned businesses are primarily offering sportsbooks before new players will undoubtedly be welcomed into the market for gambling licenses.
Last but not least, it is those overseas sportsbook operators in the grey market that will benefit significantly. Although not entirely legally, these operators have already built-up trust and a reputation among Canadians. If they were to secure Canadian gambling licenses in the future, it would be easy for them to tap into the market and possibly overtake new Canadian sportsbooks. It’s not yet clear whether Canadian authorities will implement measures to help new locally-founded sportsbooks catch up on the brands built within the grey market.