Gambling Laws in the US vs Canada

The US and Canada have long been neighbors with huge contrasts in theirs laws and social factors. The stance the two countries have on gambling is an example of these major differences. Here is a look at how gambling laws in the US compare to their Canadian counterparts north of the border.

A Checkered Past

Gambling laws in both the US and Canada might still be considered slightly restricted due to the double layer of federal and state/ provincial law but things are far more liberal for gambling in both countries than they were even just 50 years ago.

Historically, the gambling laws in both the US and Canada have been very strict. During the Californian Gold Rush and Great Depression eras, gambling was largely considered illegal and was forced underground. The Federal Wire Act of 1961 meant that gambling remained illegal across many US states until some states introduced their own laws to sidestep that ruling. An example being the legalization of casinos on riverboats in Iowa, Illinois and Louisiana.

In Canada, the act of gambling was widely outlawed until the 1970s. This became a turning point for the country’s approach to gambling. The reformation of the Criminal Code meant provinces throughout Canada were handed the power to license and regulate gambling activity within their own territories.

A Fork in The Road

A defining moment that saw the US and Canada veer off in two completely different directions when it came to their gambling laws was the introduction of the Unlawful Internet Gambling Enforcement Act of 2006 by the George W. Bush administration.

This law intended to prohibit gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law”. Needless to say, it was not a law that proved to be very popular with online gamblers in the US. Its repercussions were also felt worldwide as confusion reigned for some time over what was considered to be legal or illegal with US-based players participating at foreign-based casinos online.

It was a particularly damning move by the US government because it came at a time when online poker was experiencing a surge in popularity. The stunning victory by online satellite qualifier Chris Moneymaker at the 2003 World Series of Poker Main Event saw millions of players attracted to online poker sites in the hope of following in the professional poker star’s footsteps. A knock-on effect of this was players flocking to online casinos to try out popular games like slots and classic casino table games. Unfortunately, the UIGEA law put a halt on the aspirations of many players living in the US.

Meanwhile, Canada’s online gambling businesses thrived in this new age of online gaming. Some provinces even embraced the culture of gambling online by operating their own online casinos. The attitude of the Canadian government was very much one of being happy to legalize online gambling provided operators adhered to the regulations set in place by the government itself.

The Kahnawake Gaming Commission Controversy

One area of controversy lies with the Kahnawake Gaming Commission. This Indian reserve is located within the borders of Canada but it remains a sovereign nation within its own right. It has led to a number of debates surrounding its involvement in online gambling legislation.

Operators have frequently used the commission to not only swerve the Canadian online gambling laws and regulations but those of other countries from around the world. Despite being based in Canada, it does not come under Canadian rule. It has become a headache for both the Canadian government and a number of governments abroad. For the time being, there is nothing Canada, or any other nation, can do about operators using the Kahnawake Gaming Commission to sidestep the laws put in place by countries that aim to firmly regulate operators working in their jurisdictions. 

What Does The Future Hold?

Times are a-changing for online gambling. This is particularly the case for players in the US. Recent years have provided more positive news than negative for online gamblers in the US. States including Delaware, Nevada, and New Jersey have introduced laws that legalize regulated online gambling. Other states, except Washington, allow players to gamble online at offshore operators.

The inauguration of Donald Trump as the 45th President of the United States of America has welcomed in a dawn of uncertainty for gambling in the US. Commentators were split in the run-up to the election over what Trump’s approach to gambling would be. As a former owner of several Trump-brand casinos across the US there was speculation that he would be keen to relax the laws currently in place.

However, a number of high-profile Republican party financial backers have expressed opposition to legalized online gambling. Trump still has a number of business associates such as Sheldon Adelson and Steve Wynn who have expressed a desire to see land-based gambling favored over online gambling. Could his loyalty to his friends in business overrule his desire to see gambling online legalized?

The global gambling market value is expected to reach nearly $60 billion by 2018. By 2020, it is anticipated that online gambling will equate to a 45% share of the entire gambling market across the world. The projections are there to suggest online gambling is the future.

If the US has any economic sense it will see that it should follow Canada’s lead and give the power back to the people when it comes to online gambling. The more opportunities to gamble in a regulated market, the more revenue that can be generated from gambling as a whole. So long as online gambling is outlawed it will drive the activity underground with revenues entering the hands of the criminals as opposed to the treasury.