May 28, 2022

The Queens County Citizen

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Why is Canada Two Decades Behind Europe When it Comes to Regulating Sports Betting?

For the past two decades, the sports betting industry has been in something of a “grey zone” legally speaking. Canada legalized sports betting in the early 1990s but it criminalized betting on single sporting events. While European countries liberalized the gambling industry and bookmakers in these countries saw their fortunes soar, the Canadian sports betting industry has been stuck in something of a time warp.

Single-Game Betting vs Parlay-style Betting 

The criminalization of single-game betting has, perhaps, been the strictest manifestation of the Canadian anti-gambling regulations. While single-event sports betting is criminalized under the BC-218 of the Criminal Code, the law allows parlay-style betting or betting on multiple events, which some online casinos like this one also offer. Parlay-style betting refers to betting on a combination of at least two games to speculate the outcome. Naturally, a single bet is easier to crack than a parlay bet or a multi bet. Parlay bets therefore, drastically minimizes the punter’s chances of winning a bet. It is a lot difficult for sportsbooks to convince punters to put their money on parlay bets and this has driven many local punters to offshore accounts and lots of other illegal sports betting joints where billions are wagered every year.

Offshore Bookmakers Offer Better Payoffs  

It is not just in the single-event sports betting that local bookmakers and punters face challenges. Canadian law allows for pay offs of winnings within some approved limits. Such limitations don’t obtain with European and other offshore bookmakers and as a result, foreign bookmakers can provide as much as six times the betting amount. Naturally, due to these limits, Canadian punters flock to offshore betting sites where they can get more lucrative winnings. In the US and the UK, for instance, there is greater regulation of gambling and bettors are assured of their winnings. Bookmakers in Canada simply don’t have the friendly regulatory terrain that would enable them to lure bettors from the more lucrative offshore betting terrain. That means a lot of money, to the tune of $4 billion, is being siphoned off to offshore betting sites.

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Regulatory Constraints Have Contributed to Poor Offerings  

Having to grapple with a coterie of legal constraints means that Canadian bookies cannot give local punters the kinds of competitive offerings that meet international standards. Canadian punters simply get a better deal on offshore sites. This lopsided predicament has seen billions of dollars that could have flowed into the local economy getting siphoned offshore and helping power the competitive edge of the offshore bookies. This is clear in the amounts that Canadians wager locally with provincial bookies ($500 million) versus the amounts wagered in offshore accounts ($4 billion).

Change is on the Horizon 

The Canadian sports betting has mainly been frozen in a regulatory time warp for the past two decades. The regulations have not kept in step with the pace of changes in the global online sports betting marketplace. So, while the betting market in Europe is increasing in size and sophistication thanks to a more liberal regulatory framework, Canada is still trying to undo 1990s-era regulations that now seem quite archaic and stifling for the industry. However, 2021 is looking up to be a watershed year for the industry due to pressures from within and without. There is good traction with new legislation that aims to reverse a two-decade old law that criminalizes betting on single-event sporting. Industry players believe this is the ray of light that will finally unlock the potential of the industry in the country. Betting in Canada has long been limited to parlay-style betting that allows punters to bet only on two or more events and prohibits single-game betting which limits their winnings. It is no secret, that is law, amongst other regulatory bottlenecks has driven Canadian punters to the offshore markets and illegal gambling operations. It is siphoning money out of Canada and empowering organizing crime syndicates in the gambling world. Liberalizing the betting industry in Canada this year could therefore be a big deal. It would create new employment opportunities, economic prospects, new tax revenues and help develop a more robust local sportsbook marketplace. Pressure is also coming from the south where there has been a liberalization of the sports betting industry. In 2018, the Supreme Court of the US struck down the early 1990s-era Amateur Sports Act which prohibited states from legalizing sports betting. The new legal terrain now allows all the US states to go ahead and legalize and regulate their own sports betting markets. This is critical because the US is no longer at par with Canada in imposing regulatory bottlenecks on sports betting. That means Canada will now lose even more billions to the US sportsbooks unless Canada updates its regulatory framework on sports betting to stay competitive.

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