Legal Status of Online Gambling

Internet gambling has always lived in a bit of a grey area in Canadian law. The country was traditionally anti-gambling until the 1970, when the government amended the Criminal Code, legalizing certain activities[1]. In 1985, the provinces and territories were granted the right to decide whether to allow gambling or poker within their own domains. As a result some areas began holding lotteries and some casinos were constructed.

Whether or not that edict grants the right for online gambling, online casinos or online poker, is a matter of debate, though technically the same edict regarding provincial and territorial rights holds true for online gambling[2]. In fact, numerous provinces have already started running their own casino sites, based on official tenders[3].

Beyond the official provincial domains, thus far, Canadians have been able to enjoy casino and poker games online without bother. Continue reading to learn more.

Secure Gambling Sites For Canadians

6 Important Facts on Gambling in Canada

1) The Criminal Code: The Criminal Code of Canada is an official codification of criminal acts and procedures. To-date, it does not specifically make it illegal to gamble online, unless it is found that the act itself somehow falls under recognized areas of the code, or the player is underage (in which case the youth can be criminally charged[4]). The actual wording is much more complicated, and the writings on ‘Gaming and Betting’ are extensive, but that is the basic premise under which online casinos have managed to thrive legally[5]. Furthermore, while “the Criminal Code may prohibit Canadians from participating in gambling on a website located in another country, there is no mechanism to effectively enforce the prohibition”[6].

2) No Charges: As far as we know, no person has ever been charged with the crime of playing online in Canada. The industry’s closest scrape came when in 2007 servers hosting online casinos and poker rooms from Indian reservations were deemed illegal, and the Kahnawake Mohawk reserve was fined $2M[7]. Since then, the reserve has continued to appeal its jurisdictional rights, and the servers continue to operate within Canadian borders.

3) Canadian vs. U.S. Law: One key difference is that the U.S. does not grant states the right to run online gambling sites (by making financial transactions involving online gambling service providers illegal through the Unlawful Internet Gambling Enforcement Act of 2006[8]). In Canada, however, provinces have the right to allow and license online casinos as they please.

4) Sports Betting: Betting on sporting events online is illegal under U.S. law, but not under Canadian law, whose Criminal Code allows parlay bets of three or more matches (as opposed to single matches). An effort is being made to remove that restriction from the Criminal Code[9], permitting wagering on single sporting events. Check out our sports betting page to learn more or try for yourself.

5) Poker: There are a number of online poker sites available within Canada. While none of these sites — other than those housed on Indian reserves — are hosted from within the country, no law has been passed prohibiting Canadians from gambling on such sites[10]. See our poker page if you want to learn more or play.

6) Taxes: Canadian tax laws dictate that gambling winnings are generally not taxed unless seen as a form of employment determined based on skill, frequency of play, and expectation of payout[11]. If you’re a professional poker player, taxes may apply[12], but for gamers playing just for fun, winnings should be tax-free.

Regulators and Gaming Authorities in Canada

A regulating body is important, because it serves the purpose of ensuring that all casinos operate fairly. This regulating body acts like a governor of the site, and is equipped to deal with any issues. If a site breaks the rules as set by this regulator, they may then lose their licence as a consequence, which means that they would cease to have the right to offer their services. Essentially, the sites can be shut down for non-compliance. Should a site break one of the rules set by the regulator, its license can be pulled and it would no longer be able to offer any of the games you might like to play.

Who Are the Regulators? – The regulators differ from province to province. This is because currently, each one of the provinces across Canada has the right to regulate its own gambling sites.

There’s also the Kahnawake Gaming Commission. This operates from within Canada, and is named so because it operates from the Mohawk Territory of Kahnawake. It is the official licensing and regulating authority for gaming activity within Canada, but it technically counts as its own governing body. As a company, it has several key responsibilities. It runs servers, in addition to regulating casino sites in Canada.

Kahnawake was actually one of the first jurisdictions worldwide to see the potential of this industry. It’s continued on its mission to regulate interactive sites. Back in July 1999, the Commission put regulations in place concerning interactive gaming. This means it’s the longest-serving regulator of its kind.

Their primary job is to provide protection to players, not to police them. Any sites used by players have to be permit holders, a privilege granted to them by the Commission itself. The Commission then regulate such websites in a variety of ways. Everything is done to keep games fair and honest. Players have rights, and their key right is to be treated fairly. All of these rules are good news for you – you are to be paid promptly, and your information has to be held in confidence.

The Commission is also the body concerned with regulating underage players; those under 18 years of age must not play (or be encouraged to play) at any time. Vulnerable people should also not be targeted by websites, as they may not understand the risks that are involved.

As such, the Commission ensures that each website must have a mechanism to give the player back control of his or her gaming. They must be allowed to limit their playing, even if that means setting their limit to zero. Concerned family members are also allowed to apply directly to the Commission, who can help ensure that their family member prohibits the person at risk from able to place bets or wagers at that site anymore.

Everything has to be reasonable and open, with the Commission seeing that contracts are properly adhered to, with their initial terms being acceptable, fair and not out of the ordinary. This means they have to be easy-to-read, and provided in English (or any other such languages as are deemed appropriate).

Finally, the Commission also ensures that there are places for players to turn if they have any problems. Exploitation is absolutely unacceptable, and you have the right to dispute your treatment by any gambling sites. They have plenty of dispute resolution mechanisms at their disposal to address player complaints, up to and including the possibility of third party arbitration. They pride themselves on staffing a full-time Dispute Resolution Officer to promote the efficient and just treatment of any player who should find themselves with a complaint.

It’s important to note that online gaming operators that are licenced by the Commission have to conduct their business by hosting at Mohawk Internet Technologies, which is their data center located within that territory. It’s managed by Continent 8 Technologies. However, it’s not just restricted to sites here – it is also one of the most-used regulators for sites all around the world.

Can I Get In Trouble for Playing Online? – The question of what makes a casino legal will remain unclear until concise laws are written and passed. While this may be a while away, many people still play at casinos online every day. Again, as far as our search shows, not one person has been charged with the crime of playing any casino games online. Even if a specific law states a site cannot operate in your area, most sites operate outside of jurisdiction and shutting them out is almost impossible without a structured set of laws.

Canadian Gambling Jurisdictions

The laws surrounding online gambling just aren’t that clear. On the one hand, there’s legislation which means that it’s illegal for any website to provide Canadians these types of services – such as betting and gambling – unless they are in possession of a license from the government. There isn’t a law making it illegal to use gambling sites located elsewhere though, and so this distinction is important.

To complicate things further, each separate province actually within Canada is able to regulate gambling across its own regions. In fact, some local governments even operate their own outlets for citizens to access and use.

Because of all this, it can be tricky to randomly pick a website to play at if you’re in Canada. You’re better off choosing online casinos that have been independently reviewed, like the ones we recommend here on Online-Casinos-Canada.ca

FAQ

What does Canadian law actually say about gambling online?

This is tricky, because the law has never been entirely clear when it comes to internet gambling, and as such, there has always been somewhat of a grey area. Back in the 1980s, the government changed its previously anti-gambling stance which had been present until the 1970’s. This means that certain activities are now legal under the Criminal Code. Since 1985, each individual province and territory has had the right to decide for itself whether gambling of any kind or poker is to be allowed in their particular domain. This means that some regions have lotteries and casinos, whereas others do not.

What is the Criminal Code in Canada, and what does it mean for me?

As we mentioned earlier, there is a Criminal Code in Canada which dictates what is and isn’t okay legally in the country. As such, it’s an official codification of things classed as criminal acts, and the procedures surrounding them. What’s important to note is that there are no specific laws which make it illegal to actually gamble online, unless it is found that the act itself somehow falls under recognised areas of the code, or in cases where the player is underage. If that’s the case, any youth found gambling can actually be criminally charged. The wording that’s actually in the Criminal Code is far more complicated, and sections specifically related to “Gaming and Betting” are extensive, but in terms of the basics, the Code does allow online casinos to continue to operate and thrive. Technically, the Criminal Code may well prohibit Canadians from participating in online gambling activities on websites from other countries, there isn’t actually a mechanism to effectively enforce this type of prohibition.

Do I have the right to partake in online gambling activities in Canada?

There is a debate about whether or not you have a right to take part in either online gambling, online casinos or online poker, although technically you could argue that the same decree regarding provincial and territorial rights is relevant to the internet, too. Numerous different provinces across Canada have actually started rolling out their own casino sites, based on such official tenders.
Luckily, this all means that Canadians are presently able to enjoy casino games online as well as poker games online, without any trouble. Beyond the official provincial domains, thus far, Canadians have been able to enjoy casino and poker games online without bother.

What’s the worst punishment anyone’s received for gambling online in Canada?

As we stated earlier, to the very best of our knowledge, nobody has ever actually been charged with the crime of gambling online here in Canada. That means that your average player – like you – won’t be scrutinized for such online activities.
When it comes to those operating the sites, it can be a slightly different story. There was a bit of a close call in 2007, when servers hosting online casinos and poker rooms from indigenous reservations were deemed to be against the law. The Kahnawake Mohawk Reserve was subsequently fined $2M. Since that time, the reserve has campaigned for an appeal for its jurisdictional rights. As such, these servers are still operating within Canadian borders.

What might happen to me if I play games online in Canada?

No law-abiding citizen wants to think that they are doing anything illegal, for fear of consequences. However, it’s quite unclear at the moment what punishments would be if they ever were to be used, as the question of what makes casinos legal will remain a blurred line until the day that more concise laws and written and then passed.
The bottom line is that if you’re living in Canada, you’re not going to find yourself in any legal trouble that will find you incarcerated or fined, unless you’re knowingly doing something wrong. This is especially true if you’ll be using one of the official provincial casinos that are available to you. If you have any uncertainty whatsoever, you can exercise caution and double check. Legal advice is always available at your own expense.
However, at the time of writing this, there’s nothing to say that you should live – or play – in fear.

How do laws differ in the Canadian market as opposed to the current laws in the United States?

When it comes to Canadian vs US law, a key difference is that the US doesn’t actually give its states the right to operate online gambling sites, which is something they enforce through the Unlawful Internet Gambling Enforcement Act of 2006. In Canada though, it’s really up to each province to decide for itself whether to operate them as they see fit – and they have the legal right to do so.
As we stated earlier, there are also certain allowances under Canadian law that simply aren’t legal across the border. For example, it’s legal here to bet on sporting events online. However, under US law, the same cannot be said. The Criminal Code here in Canada allows parlay bets of three or more matches (as opposed to single matches). As this is restrictive, efforts are being made to change the Criminal Code, to permit wagering on single sporting events.

Which Canadian provinces have the most relaxed laws when it comes to these matters?

There’s no distinct answer about which provinces are most open to online gambling. Many provinces, such as British Columbia, Ontario and Quebec have made steps to introduce regulated in-state options, however.
As a player, rules aren’t as tightly imposed on you as they are with those providing the gaming services. They have a duty to protect you and ensure that you’re being treated fairly.
All of the information given in this section applies to Canada as a whole.

Can I play on my favorite sites when I travel internationally?

When traveling outside Canada, some websites may not work because the rules in your destination may be different. Certain provinces have state-run sites which actually stop people playing while outside of their borders.
When it comes to international sites, you may well be able to continue to play when you go abroad. It really depends on where you’re going, and their attitudes to these kinds of activities. You should check local laws in advance, and you should not attempt to break them by way of illegal methods. In fact, your account may even be frozen – and authorities may be contacted – if you dare to attempt this, particularly if you are playing for real money. In such areas where this may be culturally or morally frowned upon, there may be stricter punishments, too. Ignorance is no excuse, and it’s really not worth it!

What’s the deal when it comes to taxes and playing games for money online?

Tax matters are important. Generally, if you have any earnings within the country, these should not be concealed from the government. However, Canadian tax laws may actually work quite nicely in your favor, providing that you’re a Canadian citizen.
They actually dictate that gambling wins aren’t taxed generally, unless they could be considered a form of employment. This is determined by skill, how often you play, and the expectation of payout. If you’re just gambling for fun, this likely will not apply to you. Of course, if you’re a professional player, taxes may then apply, as this might count as a job. You should notify an accountant for any financial advice, to ensure that you are doing everything properly and above board.
However, in most cases, when gamers are playing for the fun of it, they’re in luck – winnings tend to be tax-free.

What is your legal expertise in these matters?

It’s important to note that this article has not been written by those in the legal profession, and as such, should not be considered legal advice. We have done our best to make sure that all information is accurate at the time of writing. Local legislation, restrictions and enforcement are subject to change at any moment. Additionally, you should note that we have no responsibility to ensure that updates are made to this page if there are changes after we’ve published it. In cases like this, care should be taken to ensure that you seek legal advice if you have any genuine legal concerns.

Bottom Line – To Play or not to Play?

If you live in Canada, gambling online is not going to get you in legal trouble, especially if you play at one of the official provincial casinos. If you are unsure whether you can play at a certain online casino, it is always best to use caution and double check. But as of writing, there’s no proof you should  be afraid of getting in legal trouble for playing online. See our top list of casino reviews to get started playing today.