Canadian Provincial Gaming Corporations Form Coalition Against Illegal Online Gambling

They want federal government to crack down on operators in black market
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Canada‘s provincial gaming corporations are collectively taking a firm stand against misleading advertising and the operation of illegal gambling websites within the country.

A coalition of five provincial gaming corporations — British Columbia Lottery Corporation, Manitoba Liquor and Lotteries Corporation, Loto-Quebec, Atlantic Lottery Corporation, and Alberta Gaming, Liquor & Cannabis — put out a joint press release Thursday calling on the federal government to work with provincial jurisdictions to protect the Canadian public from online black-market operations.

The newly formed coalition is protesting the use of “free-to-play” advertising tactics used by illegal operators in all forms of media during national broadcasts, which it says “blur the line between provincially regulated gaming sites” and illegal gaming sites.

“Research shows that the majority of players are unaware of whether an online site is legal in their province or not,” said Atlantic Lottery Corporation President and CEO Patrick Daigle in the release. “This is a significant amount of money that could be staying right here in our region to fund public services, but instead continues to be taken away from helping our communities to the sole benefit of illegal operators.”

The coalition plans to collectively raise public awareness regarding these issues and reach out to media platforms to advise them of their “duty to comply with existing laws and regulations” surrounding misleading advertisements for illegal gambling. The federal government is also being called upon to shut out illegal operators from the markets where the coalition provincial lottery corporations operate. There are hundreds of illegal gaming sites operating in Canada, according to the coalition.

Offshore gambling vastly outnumbers legal sites

According to recent research conducted by the Canadian Gaming Association, more than $4 billion in Canada is wagered through offshore online sports betting sites (not including iCasino), while only $500 million is wagered through legal provincial sports lottery products offered to Canadians. Online gray market operations have been ongoing in Canada for over two decades, and many sites have significant Canadian player databases as a result.

“Illegal operators see the Canadian landscape on a whole as ripe for the taking,” said Alberta Gaming, Liquor and Cannabis CEO Kandice Machado in the release. “They are using misleading advertising to dominate the market, offering countless opportunities for Canadians to — often unknowingly — engage in illegal betting.”

Canada’s federal criminal code states all forms of gaming are generally prohibited, but Section 207 makes an exception for provincial governments to “conduct and manage” gaming within their own province.

The coalition says provincial oversight helps protect players, while illegal gambling websites aren’t regulated by any provincial, or federal, government. Online sports betting and iCasino revenue generated by provincial lottery corporations is reinvested into Canada’s communities.

“The members of our coalition return their profits back to the province in which they operate. These profits help fund important programs and services like healthcare, education, and community programs,” said Manitoba Liquor & Lotteries Corporation President and CEO Manny Atwal. “Illegal gambling websites advertise to Canadian players but often operate outside of Canada, taking the profits with them.”

Ontario a different case

A noticeable omission from the coalition is the Ontario Lottery and Gaming Corporation. Ontario is in a unique situation after launching its regulated online gaming and sports betting market on April 4.

“OLG is not in it because Ontario has taken steps to protect and regulate their market,” CGA President and CEO Paul Burns told US Bets. “Within their own jurisdiction, [provincial gaming corporations] can enforce, or take action, if they think someone is breaking the law. The provinces have the tools, they can help themselves.”

Ontario is now a black market for offshore operators, unless they have — or are in the process of obtaining — a gaming license from the Alcohol and Gaming Commission of Ontario in conjunction with iGaming Ontario.

“If you do not have a license application in ahead of April 4, and you don’t have AGCO aware of that, then you are now in a black market. There’s no more gray market in Ontario anymore,” said CGA Senior Advisor Amanda Brewer during a recent Twitter Spaces discussion on sports betting by Parleh Media.

For example, bet365 and Betway are two offshore operators that have successfully made the transition to becoming regulated in Ontario. Both companies previously operated in the gray space in the province for many years and built significant Canadian player databases prior to launch of the regulated market. Players in other regions of Canada outside of Ontario can also still access these online gaming sites.

One frustrated executive from a newly regulated Ontario sportsbook recently told Sports Handle in a message exchange, “Black market operators (there is no gray market any longer in Ontario in my opinion) still live in Ontario, are not paying any tax OR being held under the regulatory rules. Advertising is very frustrating for operators playing by the rules. And it’s not just that, it’s also the ‘.net’ advertising that is still allowed for operators that have NO license and national media companies promoting brands that are operating unregulated books outside of Ontario.”

Ontario regulators established strict rules for advertising and bonus inducements for operators in the province, but .NET gaming site advertising is running on social and mainstream media in Canada and throughout Ontario. These advertisements, though, must make it clear that these games are, in fact, play-for-free.

Provincial regulators have not yet released any iGaming revenue reports, so it’s unclear how Ontario’s market is performing at this point.

So far, Ontario is the only Canadian province to adopt an open iGaming model.

Photo: Shutterstock

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