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

The purpose of having a regulating body is to ensure that casinos operate in a fair manner. The regulating body acts as the governor of the site and handles any problems. 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 its services.

Who Are the Regulators? – Currently, each province in Canada regulates its own online gambling sites. There is also the Kahnawake Gaming Commission, which operates inside Canada, but is technically its own governing body. This company not only runs servers and regulates casino sites in Canada, but is also one of the most-used regulators for sites 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.

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.