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Betting Online in the Great White North

A new study about online gambling in Canada has just been released, and it doesn’t look like the future is much brighter in the Great White North than it is in the U.S.

Public policy research group, The Canada West Foundation (CWF), notes in Gambling @ Home: Internet Gambling in Canada that gambling is “largely seen by Canadians as a socially acceptable activity.”

Popular support of gambling hasn’t brought Internet wagering to the masses in Canada, however, as the report indicates.

Online gambling in Canada sits in a bit of a netherworld, and that has contributed to its current ambiguity. Gambling operations and lotteries are managed by the provinces, which are themselves overseen in this area by the federal government and a series of very strict laws.

Betting on the Internet is not expressly forbidden in Canada, but operators need a license from the provincial government to accept wagers. And the provincial government is not issuing online wagering licenses, thus effectively making it illegal.

Because of these legal hurdles, the report says that the actual practice of gambling online is not much of a growth industry in Canada. One other major stumbling block is the fact that single-event sport betting, which is currently one of the most popular forms of online wagering, is also prohibited under current legislation.

According to the report, provincial governments have four possible courses of action with regard to Internet wagering: licensing, operating, prohibiting, or maintaining the status quo. Several costs/benefits scenarios are outlined in the report, with the social and financial ramifications of online gambling figuring prominently.

The CWF believes online casino licensing opportunities would benefit Native and community groups, and would prevent Canadian money from going offshore. But it also suggests that the expansion of online gambling in Canada could lead to an increase in problem gambling and diminished provincial lottery revenue.

Although maintaining the status quo appears to be of little interest to gambling companies (many of which are Canadian and are doing quite well on the international stage), the report seems to suggest that there is little harm in staying the course because so few Canadians actively bet online.

Unfortunately, this conclusion is somewhat flawed. The industry has grown substantially since this data was collected, and it is highly likely that the number of Canadians actively wagering online has grown considerably in recent years.

There are a number of interesting observations in the final pages of the report. The CWF suggests that the absence of provincial involvement or licensing opens the door for money laundering activities, but it also says that “a ‘wait and see’ approach may be the best option for policy makers.”

Perhaps the most significant conclusion of the study, however, is that the provinces will continue to lose money to offshore gambling sites regardless of what they do. That trend will likely continue until the major Nevada casinos go online.

The CWF expects that the proliferation of offshore sites will likely lead to increased calls for government intervention, but it believes that the Canadian government has a difficult task ahead of it to determine a “course of action on Internet gambling that does the least amount of harm.”…

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