The Push and Pull of Gambling Regulations

The last couple of years have seen significant shifts in the approach to gambling regulation both north and south of the US-Canadian border. Two significant changes have emerged, the first in the form of the Supreme Court of the United States (SCOTUS) overturning a law that prohibited betting on sport events across most of the United States.

Meanwhile, Canadians have been grappling with their own restrictions, in the form of Bill 74, when the state of Quebec attempted to prevent overseas online casinos from operating within the province and wanted to force Internet Service Providers (ISPs) to police any illegal activity. Whilst this has been initially struck down, it has led to ongoing uncertainty as to whether Quebec will challenge the ruling or pursue some other form of restriction.

Flux is Fantastic

This ongoing reviewing of the laws governing live online casinos on either side of the border has led to a state of flux that has provided speculators with many potential opportunities. Historically, many gamblers flowed north to enjoy the relatively relaxed regulations enjoyed by many Canadians.

Towns close to the border benefited from the tourism, whilst US gamblers enjoyed an additional tax break on any winnings gained whilst abroad.

Now the tables are set to flow the other way, as Canada does not currently offer single game sports betting, and Canadian and US gamblers may be tempted to enjoy more of their games State-side.

The effect of the SCOTUS ruling has been almost immediate in terms of the eagerness of states to develop the sport betting industry in both its online and offline forms. Whilst the freedom for states to determine their own gambling regulations has been established, some, like New Jersey have faced push-back from organisations such as the NBA and NFL among others.

Whilst New Jersey ultimately won their battle in the courts, there are a significant number of other hurdles to overcome in terms of in-state regulation and monitoring of the industry on a scale they simply have not had to handle before.

However, the logistics are a calculable and workable problem and with a raft of other states also vigorously looking to open the industry within their jurisdictions, it is clear that there will be a lot of shared experiences and best practice conferences between stakeholders to ensure that the development of the sector is swift and profitable.

Stagnation could be deadly

All this, of course, seriously risks putting a dint in Canada’s previously shinny and relatively liberal gambling regulations. In the first instance the estimated $500 million in legal sports betting that takes place in Canada could take a hit as the sector goes from a one horse race to a race with multiple horses where the Canadian entrant is unable to compete in all events.

The limitation of only allowing parlay betting in Canada will be felt as gamblers turn to online sites across the border where there is more variety. Not convinced? Well, there is already an estimated $10 million spent in overseas sports gambling that Canadian’s partake of annually just to begin with.

If Quebec were to ultimately win it’s restriction on the ability of overseas platforms to ply their wares within its province, this would be like placing a bandage on a cracked dam. Not only would revenues drop from the reduced number of visitors coming to Canada to play, but it is likely that an increasing number of Canadians would make the effort to travel south to enjoy the variety of games available.

Ultimately, the Canadian provinces would suffer, especially as so many of the institutions and charities have been significant beneficiaries of what is effectively a state-run income-stream.

Many within the industry are pinning their hopes on the support from ISPs over the ruling on Bill 74 and the continued support of the state legislature to underline the need for a reform of Canadian gambling laws.

Sensibly the recent changes to the US landscape should place further pressure on the Canadian gaming commissions to rethink their approach to one of development rather than prohibition.