The rapid development of the gaming industry is also confirmed by a Statista study:
The average annual growth rate (CAGR) is expected to be 6.39% between 2024 and 2029, leading to a projected market volume of $5.71 billion by 2029.
The projected market volume of online casinos will be $2.61 billion in 2024.
It is estimated that over 69% of the population of legal gambling age will participate in gambling in 2024.
The online gambling market is expected to see the number of users reach 33.9 million by 2029.
With the legalization of online gambling in the country's provinces, more and more people are participating in iGaming in Canada. Undoubtedly, many people engaged in online gambling even before it became legal, but many were reluctant to take the risk. The fact that iGaming is now regulated in many provinces has attracted new players.
Let's take a closer look at the regulation of online casinos in Canada and evaluate this rapidly growing online gambling market from the perspective of laws and licensing.
Are Online Casinos Legal in Canada?
Online gambling in Canada is legal, but with certain nuances related to regulation and jurisdiction. Federal law sets general guidelines prohibiting online gambling without a license. However, many provinces have effectively implemented their own online gambling systems.
Each province has the right to independently establish its own rules and regulate online gambling within its territory. Provincial legislation may vary depending on the type of gambling. For example, some provinces may only allow sports betting and casino games, while others may permit a broader range of gambling activities.
Overall, online gambling in Canada is legal, provided that regulatory norms are followed and permission is obtained from provincial authorities.
Differences Between the Regulated and Unregulated iGaming Market
In Canada, the iGaming market can be divided into regulated and unregulated segments.
Operators in the regulated market must obtain licenses from provincial or territorial authorities. Licenses are granted only after strict requirements and standards are met, including:
Data security. Licensed operators are required to use modern data protection technologies and ensure secure transactions.
Game fairness. Platforms must conduct regular checks on game fairness and randomness of results.
Responsible gaming. Provincial regulators require operators to implement mechanisms for protection against gambling addiction.
Meanwhile, the unregulated market represents a more risky environment where players may face issues related to security, game fairness, and consumer rights.
The Difference Between Registration and Licensing
Canadian law mentions gambling licenses only for charitable organizations and small operations that have received permission from the provincial government. This means the Code does not allow private individuals or companies to obtain a license to conduct gambling on a provincial scale.
So, how does the licensing work in provinces where online gambling is allowed? Provincial governments have developed their own regulatory systems. These systems require gambling companies to register with the provincial regulator.
Thus, registration is handled by the provinces, while licensing is solely the responsibility of the state. Although the essence of these procedures is roughly the same.
Regulation of Gambling in Canada
It is important to note that the last significant update to the Code’s provisions occurred in 1985. Since then, much has changed in the gambling industry. As a result, the Code does not differentiate between the provision of land-based gambling and online gambling (“iGaming”). Therefore, the general prohibition applies regardless of whether the activity takes place online or offline.
The Criminal Code of Canada is the main law governing gambling activities in Canada. While the Code prohibits gambling in Canada, provincial governments are empowered to enact their own legislation to regulate the organization and conduct of gambling within their jurisdictions.
We have given you a general overview of the regulations for iGaming in Canada. Now, let’s focus on the provinces where online casinos are legal, which are Ontario and Kahnawake.
Regulation of Gambling in Ontario
On April 4, 2022, Ontario became the first province in Canada to introduce a regulated competitive online market for iGaming. Private gambling operators register through the Alcohol and Gaming Commission of Ontario (AGCO) and sign an operating agreement with iGaming Ontario, a subsidiary of AGCO.
Here are the key restrictions applicable to registered iGaming operators in the Ontario iGaming market:
Only players aged 19 and over can participate in iGaming products “conducted and managed” by iGaming Ontario.
Players must be physically located in Ontario to play legally. However, players can register and manage their accounts (e.g., deposit or withdraw funds) while outside of Ontario.
Registered iGaming operators in Ontario are allowed to provide their services only in Ontario and cannot rely on their AGCO registration to offer their services in other provinces.
More information on gambling regulations in Ontario can be found on the website of the Alcohol and Gaming Commission of Ontario.
Regulatory Features in Kahnawake
Kahnawake is a small settlement located in the Canadian province of Quebec. Kahnawake is an independent zone within Canadian territory and is not subject to Canadian laws.
The first regulations for organizing gambling activities were adopted in 1999 by the official licensing and regulatory body—the Kahnawake Gaming Commission (KGC).
Here are the main aspects of gambling regulation in this region:
Licensing. The KGC is responsible for licensing and regulating all forms of gambling in Kahnawake.
Online games. Online games are regulated according to the same standards as land-based gambling, with a focus on consumer protection and ensuring responsible gaming.
Financial and legal requirements. Gambling operators must conduct regular audits and provide reporting. All financial transactions must be transparent and subject to review.
Responsible gaming. The Gaming Commission supports responsible gaming initiatives by providing players with tools and resources to prevent addiction.
International aspects. Kahnawake is internationally recognized as a gambling hub, allowing operators to attract clients from around the world.
For additional information, you can visit the official website of the Kahnawake Gaming Commission.
Risks and Consequences of Non-Compliance
Violations of the Code fall under criminal law. Directors, officers, and senior management may face criminal charges related to the activities of their gambling company.
Violation of provincial gambling legislation typically does not result in personal liability for directors and officers.
The main enforcement mechanisms in the gambling sector in Canada include:
Gambling-related prosecutions in Canada are rare. However, the emergence of the iGaming market in Ontario has led to a justified increase in administrative fines, particularly for violations related to advertising and marketing.
Advertising of Gambling in Canada
At the federal level, advertising is regulated by the Canadian Code of Advertising Standards, which prohibits any misleading advertising and that which targets minors.
Each province or territory has its own laws. Let’s consider gambling advertising regulations using Ontario as an example, as it is the largest and most influential jurisdiction.
The Ontario regulator requires that all gambling advertisements include information about age restrictions, responsible gaming tools, and support lines. Additionally, starting in 2024, Ontario has introduced strict rules regarding the use of celebrities and influencers in advertising materials, as this can impact vulnerable groups of the population.
According to gambling advertising standards, any public marketing or advertising promotion of interactive bonuses and promotions is strictly prohibited. However, there is an exception allowing advertising in two ways:
Marketing and advertising of bonuses are subject to the following conditions:
Any marketing or advertising materials must disclose all key terms and conditions of the offer at the first presentation on the iGaming website.
If a player must risk their own money or if the terms involve their money, services and bonuses cannot be described as “free.”
No services can be described as “risk-free” if the player must incur losses or risk their money to use or withdraw winnings from a “risk-free” bet.
Thus, affiliates must carefully monitor compliance with all local and federal rules in Canada to ensure their advertising campaigns are legal.
Conclusion
Staying within the legal framework in the iGaming market in Canada is entirely feasible. It is essential to comply with regulatory requirements and operate in online gambling jurisdictions where it is permitted, despite their limited number.
For affiliates, this means promoting legal operators who are officially registered in Canada and adhere to regulatory requirements. Specifically, they must ensure fair play, player safety and data security, and provide tools for combating gambling addiction.
Advertising requirements for gambling are few and quite transparent. Adhering to these guidelines is sufficient to avoid violating the laws of the province in which the advertised iGaming operator is registered.
