Gambling around the world is subject to different laws and legislation. Some of the most
popular land-based gambling destinations, like Macau and the US, have some of the most
stringent laws pertaining to gambling and online gambling. Other main markets like Europe,
the UK, and Canada have more relaxed laws regulating the market. As the online gambling
industry has grown considerably over the last few years, there have been a number of
legislative changes in the US in particular that have sought to take advantage of this growing
market.
How do the laws in the US and Canada differ?
Initially, the laws in Canada and the US were fairly similar, with both countries taking a very
tough stance on gambling. In the US, gambling was completely illegal in the early 20 th
Century, and the Federal Wire Act of 1961 legislated on any gambling across state lines and
using phones or telegraph (extending now to online). This did open up some scope for
individual states to legislate, and casinos became legal to an extent in Louisiana, Iowa and
Illinois. Mirroring this, in the 1970s, reform in the Canadian Criminal Code meant that
provinces were able to set their own legislation with regards to gambling.
In the early noughties, the two countries took wildly different directions when it came to
gambling, specifically with regards to online gambling which was becoming increasingly
popular.
In the US, the Unlawful Gambling Enforcement Act of 2006 was brought in my George Bush.
This law looked to curtail online gambling in all forms by making it illegal for any operator to
accept payment for gambling services over the internet.
Canada, on the other hand, started to legislate to take advantage of all the benefits that a
well regulated online gambling market could bring. Players in Canada can access a wealth
of online gambling options, including casinos created by provincial governments themselves,
including slots, poker, live dealer games, blackjack, and many more.
In Canada, online entities are not allowed to be based on shore, but must be licenced by the
Canadian government, and most operators will have sites specifically geared at the local
market. Canadian players will have more choice than their American counterparts, as
although the laws around online gambling have relaxed somewhat in the US in recent times, they are still very strict and pose a minefield to operators who find they can easily fall foul of
legislation.
In 2018, the US Supreme Court struck down PASPA 1992 (Professional and Amateur Sport
Protection Act) as it was ruled unconstitutional, and this has paved the way for a number of
states to look at opening up their markets to sports betting as a direct result of this. New
Jersey, Nevada, and Delaware were among the first states to legalise sports betting, closely
followed by Mississippi, West Virginia and New Mexico. So far 22 states have legalised
sports betting, most recently was North Carolina in March 2021. Several other states are
planning on making changes to legislation, or have bills going through the process.
The overturning of PASPA has also paved the way for online gambling to become part of the
conversation again, with states including New Jersey, Nevada, and Delaware allowing
players to gamble online using off-shore operators. Other states are sure to follow.
However, in Canada, wagers on single sporting events are not currently allowed. Following a
1985 bill, which passed in just 58 days, Canadians can only bet on sports if they do so on
multiple or cumulative groups of games. This was brought in in an attempt to reduce the
incentives for match manipulation or match fixing. However, Bill C-218 is currently going
through Parliament, with a view to overturning this ban as a way to safeguard casino jobs
and stop money going across the border.
In the US, casinos winnings are taxed, meaning that players can lose up to a quarter of their
winnings to the tax man. In Canada, players’ winnings are tax free, but operators and
bookies pay taxes, thus generating revenue for the government. In the US, the gambling
industry’s GDP increased from US$2.51 billion to US$2.65 billion between May and
September 2019. In August 2020 alone, the state of New Jersey netted US$85 million from
gambling, as residents took advantage of casino games like these, this resulted in a 120%
increase from the previous year. This is just a fraction of what the market could be worth
once fully open, and the US is poised, if changes in legislation go ahead, to be one of the
main players in the gambling world along with Canada, Europe, and the UK.
In Canada, gambling revenues are huge, with around US$23 billion generated every year.
This is set to increase dramatically in the ban on single event sports betting is lifted, as
players stop placing bets abroad and bring the money back into the country.
What next for the US and Canada?
Both countries started off from fairly similar points, diverged massively as attitudes to
gambling took their laws down different paths, and are slowly coming back to some degree
of parity. The US in particular has struggled with the federal versus state legislation, as well
as looking to legislate in a meaningful way that will protect operators and players, as well as
reaping the financial benefits of a more open (online) gambling market.
