Regulation of Sports Betting in Canada VS the USA


While the Canadian government is doing little, if anything at all is doing in relation to online sports betting, our neighbor to the south is making efforts to rein in what has grown into a multibillion-dollar business.

The United States addressed this issue ten years ago, during the online poker boom, after casino operators in Nevada – the only state where sports betting of all kinds fully legalized – realize how much revenue goes to foreign gambling sites. Under intense lobbying of the representatives of the gambling industry, Congress acted swiftly and in 2016 issued the Act on illegal gambling on the Internet (Unlawful Internet Gambling Enforcement Act – UIGEA), which prohibits taking payments from online gambling in states where gambling is illegal.

“Congressional officials said, hey you, foreign operators, your business is illegal, you are violating federal laws. But these operators have ignored the call, “- said co-chair of the company Law Group of Sports Dan Etna in New York.

Congress therefore convinced that the law covers businesses that they can control – the banks and other companies that process customer payments to online gambling sites.

“They would then have appealed to the payment system – PayPal. If you have made the payment through Chase Manhattan or TDBank in the United States, regardless of who carried out the transaction, it was a violation of federal laws, – explained Etna. – Thus, the Congress had controlled foreign websites”

Etna has confirmed that this limitation did not take up the possibility of Americans to participate in online gambling, which, according to the law, was not considered a crime in terms of the bettors. Many foreign merchants have ceased to serve US customers, but others continued, and savvy gamblers use workarounds, such as proxy servers and third-party payment companies that allow bettors to replenish their accounts, acting as an intermediary between customers and their banks.

NBA wants a different approach to the sports betting

Recognizing this reality, has pushed the US to expand the boundaries of full legalization of sports betting outside of Nevada. Limited forms of sports gambling are legal in the states of Delaware and Montana, which offer games, controlled by state lotteries.

In 2014 in New Jersey was put forward a law providing the resolution of sports betting in the territory of the state, which become an attempt to support the fading casinos and horse racing industry. Such action challenged the federal statute of 1992, which prohibited sports betting, supported by the state, except for the states of Nevada, Oregon, Delaware and Montana, which originated this activity.

To date, legal claims prevented the entry into force of the law and all the four major sports leagues in North America along with the National Collegiate Athletic Association, which oversees university sports in the United States, opposed the actions of New Jersey. But soon the federal court’s will make decision and if the representatives of New Jersey will win the case, they will immediately offer sports betting services, and then will be followed by other states.

The stakes are high. Consider the following: According to the chief governing body of the state of Nevada in the field of gambling (Nevada Gaming Control Board), sports bookmakers have set a new monthly record (on the amount of money received from the tender) for each of the three months of 2016, including 459 million dollars in March. Bookmakers received 19.6 million dollars in February, and 9.7 million in March.

National Basketball Association (NBA) also wants to take part in it. Although it continues to oppose the actions of New Jersey, is one among the four leagues publicly acknowledged that billions of Americans are involved in gambling on sports and call for change. In the column, commentator of the newspaper New York Times commissioner Adam Silver calls for a “different approach” to sports gambling. Silver refers to the estimates on which $ 400 billion is going on illegal sports betting in the United States each year, and said: “This shows a clear craving for the safe and legal way to bet on sports.”

Silver calls on Congress to “take the federal framework that will empower betting in professional sports, prescribe stringent regulatory requirements and technical security measures.”

Canada is in no hurry to respond

This desire for change is not the case in Canada, where it is estimated that annually receive $ 4 billion from the tender through offshore sports bookmakers.

In Ottawa, it was recently introduced a bill by an ordinary member of Parliament – Brian Masse funded a deputy from the New Democratic Party of Canada, which will allow to bet on certain games. Several provinces are currently allowed to conduct sports gambling through lottery company, but there is betting limit in which bettors must correctly guess the outcome of the various games. Provincial Lottery also offer lower payments to these rates than at offshore sites.

“Just adapt it and slide on the regulated market – offers Masse. – Thus, the foreign operation in the field of betting almost depart back to the taxpayers. ”

Despite this, the Liberal government says it is going to reject the bill.

“Nobody wants to be on the sidelines saying, that we should expand gambling activities” – emphasizes the lawyer in Toronto, Michael Lipton.

But there is a way forward. And it starts with the best product offers for the gambler.

Another way, voiced by Lipton, is the end of the monopoly of provincial lotteries and representation of licensing system, in which private betting companies can operate and be regulated by the state. Such a system currently exists in the UK, where betting has been widely recognized and is available in the traditional private offices.

Question about daily fantasy sports

The feeling that Canada is not going to budge when it comes to gambling. While the authorities and regulators after two decades continue to puzzle over how to deal with the billions of dollars received from foreign sports betting by bookmakers on the horizon other problems surfaced.

The growing popularity of sites of so-called daily fantasy sports, such as DraftKings and FanDuel, where users can place bets and win money depending on their ability to anticipate the results of the individual players, many raises the question whether these activities are related to sports gambling. Developing industry seized on a loophole in the UIGEA act, calling fantasy sports intellectual game, not gambling. When the act was passed in 2006, legislators want to legalize playing fantasy sports, as most of them involve lower rates and seasonal games played among friends.

In the US, some states have called fantasy sports some form of gambling and recognized its illegal. Both bookmakers, DraftKings and FanDuel, industry leaders agreed to stop spending money on the event in New York City, succumbed to pressure from the authorities. Other states, such as Virginia, decided to regulate this activity and to receive profit from it.

But US lawmakers at least paying attention to this issue, trying to find a solution. In Canada there is no any movement in the direction of the daily fantasy sports.

Among the many necessary changes on the horizon of sports gambling in Canada, it is another missed opportunity.

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