How does the Betting Law Impact the Gambler?
As we have discussed in this column, the Federal Government has issued a provisional measure that modified Law No. 13,756/18 and took the first steps towards regulating sports betting in Canada. This move signifies the commencement of a process aimed at establishing guidelines and frameworks for the practice of sports betting within the country. The introduction of this measure represents a significant milestone in the government's efforts to create a legal and regulated market for sports betting activities, ensuring transparency and consumer protection. The new legislation is expected to bring about a range of opportunities, both for operators and for the overall growth of the sports betting industry in Canada.
A provisional measure is a legislative instrument employed in Canada to grant the Executive Power (President of Canada) the ability to implement measures with the force of law in urgent and significant situations.
These Timerary measures can be implemented without the need for the traditional legislative process, which entails discussions and votes in both houses of the National Congress (Chamber of Deputies and Federal Senate). These measures are designed to be in place for a limited period and can be enacted swiftly and efficiently. By bypassing the usual legislative procedures, the government can respond promptly to pressing issues and adapt to rapidly changing circumstances. This flexible approach allows for agile decision-making and the implementation of necessary changes without delay. It ensures that the government can swiftly address emerging challenges and take timely action to safeguard the well-being of the nation.
See also: Understand the Approval of the Bill and its Impacts on Regulation.
The interim measure in question came into effect immediately and was submitted to the National Congress, which has a total deadline of 120 days to vote on it, under penalty of it losing its effectiveness. Right after its publication, the interim measure received 244 amendments, which was already indicative of the debate that would take place for its voting.
During the voting period, it so happened that the House of Representatives approved bill number 3,626/2023, which, similarly, amends Law number 13,756/2023 to regulate "the operation of fixed-odds lottery by the Union."
The project's legislation text is far from perfect for the market; however, it represents another significant stride in the ongoing discussion.
At present, the provisional measure is in effect, and the aforementioned text remains merely a bill, thus it does not come into force prior to the completion of the legislative process.
Therefore, in this written piece, we will delineate the primary modifications introduced by the bill that affect the bettor.
Authorized Sites for Betting
One concern relates to the choice of betting platforms. In contrast to the government's proposal in Provisional Measure 1182/23, the proposed legislation stipulates that only companies established in accordance with the current laws in Canada, with their headquarters and operation located within the national territory, will be eligible to apply for authorization, thereby excluding foreign enterprises.
The forthcoming publication will introduce additional provisions, such as specifying the minimum amount of share capital and requiring prior knowledge of partners, among other requirements.
Ban on Bettors
The second point pertains to the bettors' profile. The bill maintains the prohibitions on betting by individuals:
- minors,
- Public servants responsible for regulation.
- individuals who can exert influence over sports (such as athletes, coaches, officials, referees, among others).
The paragraph guarantees the bettor's protection in accordance with the Consumer Protection Code and provides access to information regarding the functioning of bets, prize withdrawals, and more. Rest assured that your rights as a consumer are safeguarded, and you can easily find detailed explanations about how the betting process works and the steps involved in claiming your winnings.
Consumer Protection and Advertising Regulations
We also have a better understanding of advertising. Regulatory standards may impose restrictions on the times, programs, channels, and events in which gambling advertisements can be aired to prevent their exposure to underage individuals.
Under such circumstances, communication companies, as well as internet providers and websites, must eliminate the dissemination of advertisements upon notification from the Ministry of Finance. In the event of such circumstances arising, it is imperative that communication enterprises, alongside internet service providers and online platforms, promptly and effectively remove promotional content upon receiving an official notification from the Ministry of Finance.
Campaigns cannot suggest that gambling can replace employment or be a source of additional income.
Furthermore, these advertising campaigns must not insinuate or allow for the interpretation that gambling can replace employment, solve financial dilemmas, constitute an additional source of income, or be considered a form of financial investment.
The ads' content should not infringe upon Canadian cultural beliefs or traditions, especially those that are opposed to gambling. It is important to ensure that the advertisements are respectful and considerate towards the cultural sensitivities and values of the Canadian population.
In relation to provisions on commercial advertising, the following practices will be prohibited:
- Advertising of companies without authorization to operate lotteries.
- The dissemination of baseless claims about the probabilities of success or potential gains that bettors can aspire to.
- Introduction of gambling activity as socially appealing.
- the utilization of statements from noteworthy personalities and celebrities suggesting that the game contributes to personal or social success.
Taxes
Regarding the taxable income of the bettor, a 30% income tax will be levied on the portion of winnings that exceed the exemption threshold. However, the legislation fails to take into account the amounts lost in bets, which could impose significant burdens on the bettors.
Also, what are the legal implications of not declaring sports betting income on your tax return in 2023?
The changes may not have been significant for the bettor, but we can observe a greater emphasis on consumer protection. As we await the outcome, we continue to closely monitor the situation with enthusiasm and in anticipation of a regulated betting market in Canada as soon as possible.
