UNITED STATES—Canada is the United States’ nearest neighbor both in the obvious geographical sense but also in terms of its ancient historical cultural ties. While the two North American nations share strong and friendly bonds of affinity, they also differ significantly in a number of regards such as in their political system, gun culture (or lack thereof), cuisine, and so on. One of the key differences between the two that has caused a lot of international tension, or perhaps envy is a better word, is the differing legal approaches to online casinos. Citizens of each country have very different experiences when trying to gamble online.
The United States has a problematic recent history of trying to regulate and control online gambling activity. Over the past decade in particular the Department of Justice and State regulatory bodies have struggled to get a firm handle on how exactly online casinos should be regulated, if at all. For example, all the way back in 2011 reversed a key legal understanding that held that the Federal Government could render online gambling illegal under certain circumstances – instead they stated that the Federal Wire Act (the laws in question) referred only to betting sites and not to online casinos.
Since then the American experience has mostly been a hodge-podge and state-by-state process of half-hearted or otherwise failed or stalled attempts to establish a basis of regulation. For example, over the last several years Nevada, Delaware and New Jersey have pushed forwards to clarify that “games of chance” are perfectly legal to place bets upon – something that has been important for the online poker industry. Just this month several new states have voted and passed legislation seeking to clarify the status of betting on sports online and whether or not permits are required, etc. But long story short – the American legal system has not yet fully decided how it should relate to online casinos.
Hence the envy foreshadowed above – the situation in Canada is radically different! Not only is there no tax on winnings, unlike on the other side of the border where Americans pay a whopping 25% tax on their earnings from gambling, but the Canadian Government has not yet even started to try to control or regulate the activity of online casinos. The flipside of this, however, is that the Canadian Government does not manage licensing of online casinos. This means that it is often described as a “grey” area in terms of legislation – it’s both not illegal in any way, but at the same time it isn’t something that is officially sanctioned.
For this reason, Canadians gambling online enjoy the freedom of being able to play online casino games and gamble at essentially any site and play games operated by pretty much any provider. And while the USA is (in)famous for its luxurious casinos in Las Vegas – the epi-centre of gambling on Earth – when it comes to online casinos, there simply aren’t that many prestigious operators in America just yet. Most of the more celebrated online casinos are run from places like Gibraltar, London or Malta, where favorable tax incentives provide a perfect foundation for such businesses.
What this means is that Canadians can pick and choose freely from operators that may not be serving American customers, and not infrequently these operators provide far better deals and special offers than their American counterparts. Given all this, you might be wondering if there are any negatives that Canadians experience relative to Americans. Well, in this respect one of the downsides is that payment can sometimes be an issue for Canadians who have elected to play at particular websites. Not all online casinos accept the more common payment methods, with some even requiring a wire transfer – a practice that has seen some patterns of fraudulent behavior in recent years. In other words, the lack of regulation on the Canadian side of the border means that gamblers are much more independent for better and worse.
With interest in online casinos growing massively following the extended periods of lockdown and social distancing that 2020 has delivered us as a consequence of the ongoing coronavirus pandemic, it is critical that national governments adopt a coherent and sensible approach to regulation in the field. However, it is unclear what exactly is the best approach – the American attempts to allow state-by-state regulation or the Canadian hands-off approach. Both methods have their pros and cons but for the majority of gamblers, the Canadians enjoying tax-free winnings from online casinos all over the globe will surely be happier than their American counterparts.