There has been a quiet revolution in the Canadian gambling world, from a decades-long federal ban on single-event betting to a mosaic of successful provincial iGaming markets.
Changes largely caused by Passage of Bill C-218 in 2021The Safe and Regulated Sports Betting Act has quietly freed up billions of dollars from economic activity. Provinces that were given the power to “conduct and manage” their own gaming schemes interpreted this mandate in very different ways.
The result is a dynamic regulatory system in which competitive open markets created in Ontario exist alongside traditional government monopolies, giving millions of Canadians a new understanding of what legal online gaming will look like.
Federal Fund: Decriminalization of Single Event Betting
For decades, Canada's Criminal Code allowed only one form of sports betting: parlays (bet on multiple outcomes). As a result, the rich single-event betting market has been left entirely in the hands of offshore gray operators and the black market. It is estimated that Canadians bet about $14 billion annually on this unregulated market..
The turning point was the passage of Bill C-218 in June 2021. By lifting a legal ban that restricted sports betting to pari-mutuel betting, the federal government quietly handed responsibility for single-event betting to the provinces and territories.
The change in legislation was not symbolic; it was an economic necessity designed to recover lost tax revenue, create jobs and, most importantly, provide improved consumer protection. The law immediately gave provinces the power to recoup billions of tax revenues lost to unregulated operators.
Alberta, for example, moved quickly to accommodate betting on select events on its government platform, Play Alberta, to ensure a safe and regulated space. for Canadians in Alberta to be able to bet on sports online. This early monopoly-type strategy, controlled by Alberta Gaming, Liquor and Cannabis (AGLC), was the first to focus on channeling demand into the regulated arena. The decision by provinces to either implement a government product or adopt a direct commercial model has been a hallmark of iGaming's explosive growth in Canada.
The Ontario Model: The Path to a Competitive Market
As Canada's most populous province, Ontario was the undisputed pioneer in choosing an open, competitive market over a permanent government monopoly.
Ontario's model, launched in April 2022, is different from other provinces and has served as a proof of concept for commercial iGaming in Canada.
Key characteristics of the Ontario market:
- Regulatory and Operator Structure: The Alcohol and Gaming Commission of Ontario (AGCO) is responsible for licensing and regulatory compliance, and AGCO's iGaming Ontario (iGO) oversees commercial agreements with private operators. This model allows dozens of proven international operators to compete legally.
- High sanitation: Ontario has achieved high sanitation by inviting established gray market operators into the regulated space. This has led to the successful migration of the vast majority of players and the transfer of income from unregulated offshore platforms to a regulated structure.
- Economic Impact: The competitive environment has driven innovation, generated enormous tax revenues, and created thousands of direct and indirect job opportunities in technology, marketing, and compliance.
- Revenue share: Ontario operators are required to pay the province a percentage of their gross gaming revenue, which is typically around 20%.. It is a stable and significant source of funding for provincial programs.
Ontario's success has established a strong economic and regulatory standard against which other provinces are compared to set a benchmark for iGaming systems in those provinces.
Alberta Transition: Adapting to Competition
Following Ontario's success, Alberta is the next major province to move from a state-monopoly system (Play Alberta) to a competitive, multi-operator model. This reflects a growing understanding that a single-operator platform, while compliant, is not capable of taking full market share from established international competitors.
Industry analysts estimate the monopoly platform's drainage rate to be around 20%, meaning significant money is still flowing into the gray market.
Alberta's proposed strategy:
- Following in Ontario's Footsteps: The Province has publicly announced its intention to emulate Ontario's competitive model by opening its doors to qualified private operators who can compete with the current AGLC-run platform. The recent passage of Alberta's Online Gaming Act provides the legislative framework for this change.
- Regulatory Differences: While Alberta has embraced the spirit of competition, it has allowed for possible deviations. For example, the “conduct and manage” role could be assigned to a ministry rather than a separate agency such as iGO, and the province could choose a higher revenue share than Ontario's 20%.
- Pre-Consultation: One key difference is Alberta's commitment to more intensive consultation with First Nations communities prior to the opening of a competitive market, ensuring early resolution of economic participation and impact issues.
This transformation is important because it makes the “open market” model the dominant force in Canada. The expected opening of Alberta's competitive market will likely force other provinces to do the same.
Monopoly vs. Competition: Rest of Canada
Not all provinces have adopted the competitive model, resulting in a two-tier iGaming environment across the country.
Monopoly model:
Several provinces, such as British Columbia, Quebec and the Atlantic Lottery Corporation (ALC) provinces, have continued to use their classic model.
- British Columbia (BCLC): Operates PlayNow.com, a sports betting and interactive casino gaming site, under a government monopoly. This strategy prioritizes central control over ultimate market competition and revenue and depends on public trust in the Crown Corporation.
- Quebec (Loto-Québec): operates its online products through EspaceJeux.com. Like British Columbia, this approach aims to funnel the gaming business through a single source owned by the province, keeping all revenues in provincial coffers but limiting consumer choice and, with difficulty, eliminating the black market entirely.
Competitive rationale:
Proponents of the competitive model argue that it is the only viable way to counteract the entrenched gray market. By providing superior technology, variety and competitive odds, private operators attract the vast majority of players.
The regulatory model allows the province to regulate the market, generate healthy revenues and enforce Canadian standards more effectively than a government monopoly on its own. Events in Ontario and Alberta have opened the preliminary stage of discussions about competitive realignment in provinces such as British Columbia and Quebec.
Responsible gaming and consumer protection: a central pillar
One of the most important aspects of redefining iGaming in Canada across all provincial models is the emphasis on strong consumer protections and responsible gaming (RG) regimes.
The transition from an unregulated black market to a provincially regulated environment puts regulators at the center of protecting players.
Mandatory responsible gaming measures:
- Strict advertising standards. Provinces like Ontario have strict advertising standards for marketing and advertising materials aimed at reducing harm and protecting vulnerable people from harassment. All advertising must promote safe play and fair play.
- RG Tools: Legal sites are required to provide a suite of player protection tools, including mandatory deposit limits, time limits, reality checks, and easy access to self-exclusion programs. Operators are also required to obtain RG Check accreditation.
- AML and KYC Compliance: Operators are required to comply with robust Anti-Money Laundering (AML) and Know Your Customer (KYC) standards to ensure the integrity of financial transactions and stop underage gambling.
Conclusion
Canada's iGaming mania is not a wild explosion, but a measured, systematic effort by provincial governments to overhaul their legal and digital environments. The legalization of single-event betting, spurred by Bill C-218, gave provinces the freedom to go their own way. Ontario's open market approach has raised the bar for economic development and resource allocation, which Alberta emulates while other provinces continue to maintain lucrative monopolies.
