The legality of online gambling in both Canada and the United States is a convoluted topic. There are some aspects that aren't transparent. This clarity became further cloudy in the US when the US Department of Justice changed their opinion on the "Federal Wire Act" for sports betting in January 2019. While this latest opinion appears it won't impact the US in a significant way, it still symbolizes the chaotic history of gambling laws within the country. As for Canadian online casinos, they too have had their fair share of ambivalence when it comes to online wagering.
Online Gambling History In Canada
Back in 1985, Canadian law opened up the legalization of gambling as gaming machines were introduced throughout the country. Gambling was deemed illegal back in 1892, so it took nearly 100 years before casinos were opened up throughout many of the provinces. However, the idea of online wagering in the country was not much of a thought at that time, and the only vague reference to it in the Criminal Code of Canada is a measure prohibiting sites that promote online betting to operate within the borders of The North. It does not explicitly state that it is illegal to use online gambling sites from companies that don't operate within the country, but it also does not state that it is legal to do so. Currently, there have been no reported instances where Canada or any of their provinces within have gone after individual players for online betting in the form of fines or jail time. There has only been one instance of Canada going after an offshore operator, as they levied fines and took back money from Starnet Communications International of Delaware back in 1999.
Considering the soft execution of the law, many Canadian players participate in offshore online wagering and sports betting, even while there are legal online betting sites running in the country, such as Pro-Line. It's often easier to use these offshore sites, as they're popular globally, offer many types of games, have superior sign-up and deposit bonuses, and in the case of sports wagering, you are allowed to place bets on single games, which is prohibited in Canada.
History Of Online Gambling In The United States
In 1994, MicroGaming developed the first online casino software. It wasn't until two years later that the first bet was taken at Intercasino, which offered 18 games. Shortly after, Kahnawake Gaming Commission was formed to regulate these online casinos. It didn't take long for online casinos to take off in the United States, as over $1.5 billion was generated by the time 2001 rolled around.
In 2006, everything was brought to a stop, as an act that was cleverly added onto the "SAFE Port Act" called the "Unlawful Internet Gambling Enforcement Act of 2006" was now being enforced. This act made it unlawful to have financial transactions between betting sites and banks.
Many companies found work-arounds, essentially creating a gray market for online gambling. But things began to take a turn in January 2011 when New Jersey passed legislation, sponsored by Raymond Lesniak, to allow online wagering in the state. In December of 2011, the US Department of Justice released an opinion that stated the "Federal Wire Act" prohibited online sports betting, but not for casino games. This opened the door and New Jersey took full advantage in February 2013, officially passing legislation which legalized online casinos in NJ. But what about sports betting?
Sports betting was previously illegal due to the Professional and Amateur Sports Protection Act of 1992 (PASPA). That all changed in June 2017 when the Supreme Court of the United States heard New Jersey's case to legalize sports wagering. In May 2018, the highest court in the US ruled in the Garden State's favor, officially opening the doors for not only sports wagering, but online sports betting in NJ as well.
Before this time, Nevada was the only state to offer sports betting, but on June 5, 2018, Delaware became the second state to do so, and a few days later, New Jersey joined the fray.
Since that time, the following states have legalized sports betting for a total of 13:
- Rhode Island
- New Mexico
- West Virginia
- New Hampshire
On Monday, January 14, 2019, the US Department of Justice reversed a 2011 opinion of the "Federal Wire Act" as it applies to sports betting. It is to be determined how this impacts the future of US online gambling, but for now, it appears to be minimal.
The Differences Between Online Gambling In Canada And The US
The differences between Canada and the US are quite significant. First, you have wagering differences. You are not allowed to place wagers on single games in Canada, whereas the sports betting in the US has a multitude of betting options. Next, are the regulations.
Canada does not have a regulating body to oversee operators. This is why there is a lack of public transparency when it comes to gambling revenue numbers for Canadian casinos. There are also no taxes collected on the revenue either. Also, you can be 19 and gamble in the country, where you must be 21 in the US. The United States also has regulating bodies and collects taxes from each casino. Not only that, many laws dictate the allocation of the tax revenue collected from these operators.
Despite the DOJ's change of opinion, the United States has made significant strides with their gambling laws across the country. There have even been discussions of a federal bill to make online sports betting legal across the country. The hope is that Canada follows suit.