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Spotlight: Online gaming: Should Ontario adopt wide-spread gambling legislation?

Is the United Kingdom paving the way for online gambling?
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In Canada, land-based gaming venues, online lotteries and horserace wagering are stringently regulated by the laws of each governing province or territory. This article explores current gambling legislation in Ontario, its effects on the economy and how the United Kingdom is paving the way for online gambling.

Online gambling in Canada

Obtaining an official license to operate an online gambling company in Canada is extremely difficult, and the instances of them being granted are quite rare. In recent years, there have been two high-profile examples of the Canadian government prosecuting companies for unofficially operating online gambling platforms within the country:

  • In 2001 a Delaware-based company were fined $100,000 and forced to hand over $6 million in revenues to the province of British Columbia. The company – Starnet – had illegally provided online gambling facilities by basing their servers in Canada.
  • 12 years later the province of Ontario conducted ten raids charging 19 people connected to Platinum Sports Book. The province later recovered over $2 million from the company.

To avoid losing assets and revenues to provincial governments, online gambling providers have started to base their servers ‘offshore’. By comparison, laws regarding land-based casinos in the province are fairly straightforward. In Ontario, there 25 casino and slot locations currently in operation.

Ontario-specific gambling laws

While land-based gambling is legal in Ontario, online gambling isn’t as widely adopted. Although there are government-regulated online lottery and gaming options in Ontario, sports betting is prohibited and online poker remains a grey area. In Ontario, certain online games are legal to play but poker is not specifically cited in the current legislation. As a result of the ambiguity in the laws, a number of offshore companies currently cater to betting enthusiasts in Ontario.

As these online gambling sites are not officially based in Canada they are legally free to offer their services to Canadian citizens. British and American sports betting and poker companies have a large following in Ontario.

How does gambling benefit Ontario’s economy?

Ontario Lottery and Gaming reported total revenues of $7.5 billion in 2016-2017. Over half of that revenue came from land-based casinos and lotteries.

However, relaxations in online gambling laws saw the remote gambling sector rise by 18.7%, which certainly sounds impressive. However, the total revenue of $59.4 million is fairly meagre when compared to wider industry statistics.

In Quebec for example, the online sector was worth C$100 million in the same time period, largely due to their wider offering of online gambling activities.

What are the most popular online gambling activities?

Poker:

The classic card game is one of the most popular gambling activities in the world and has encountered a resurgence in popularity in recent years. At the turn of the millennium, amateur player Chris Moneymaker won the World Series of Poker with what could be considered the greatest bluff of all time. That bluff coupled with the revolution of online gambling technology positioned poker as one of the world’s most popular online gambling activities.

Traditional casino games:

Roulette, blackjack and baccarat are popular amongst online gamblers; however, these games are more popular in traditional land-based casinos. The advent of live casino streaming technology has seen participation levels in these games increase, but they are nowhere near as popular as games like slot machines.

Slot machines:

Walk into most land-based casinos and the number of gaming tables will be dwarfed by the sheer amount of shiny, whizzing and whirring slot machines. The popularity of these games is no different in online casinos either. The majority of online casinos offer slot machines to their customers, and they use cutting edge technology to provide industry-leading entertainment to participants. In the United Kingdom, more than half of the online gambling yield comes from slot machine revenues.

How the United Kingdom has become an industry leader in online gambling

Strangely, the best example of a well-regulated and successful gambling industry comes from the United Kingdom rather than the US, Canada or Asia. The gross
gambling yield of the UK recently peaked at just below $25.5 billion (£15 billion). Sports betting, national lotteries and online casinos are all available to British gamblers at the push of a smartphone button.

It’s fair to say, citizens of the UK are spoiled for choice. The huge demand for gambling has resulted in dedicated sites for soccer betting, slots, poker and bingo – the ability to specialise in one particular area enables the sites to provide their customers with the best possible odds, games and promotions. For example, online slots in the UK come in a range of different shapes and sizes, with new games being released to the public on a regular basis.

The UK’s gambling industry is still heavily regulated by the government however, ensuring that those suffering from gambling problems can get the help that they need. British experts believe that a regulated, open gambling industry is more conducive to social harmony than a strictly illegal one. Widespread legalisation in the UK has led to a thriving online industry providing lucrative tax revenues and job creation in the country. Inter-industry competition has also led to the development of niche companies in the market.

Final thoughts

The current state of gambling legislation in Ontario could be viewed as progressive, particularly in comparison to the rest of Canada. However, there is room to further modernize the industry when it comes to online gambling to deliver greater revenues to the province while protecting Canadian players who may seek off-shore services.

Perhaps it’s time for Ontario to follow the lead of the UK and implement widespread gambling legalisation?

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