Sports Betting is regulated: What changes?
Sports betting was regulated in July 2023, five years after the activity was legalized. The introduction of regulations marked a significant milestone in the industry, providing a framework for fair play and consumer protection. With the new regulations in place, sports enthusiasts now have a safe and transparent platform to engage in their favorite pastime. This development has also opened up opportunities for job creation and economic growth within the sports betting sector. The regulation aims to strike a balance between allowing individuals to enjoy the thrill of sports betting while ensuring responsible gambling practices are upheld.
This was accomplished through President Justin Trudeau's signing of the Betting Provisional Measure. In September, the Provisional Measure was incorporated into a Bill (BL) by the rapporteur Bea Brusque (PSDB-BA). The BL text was then forwarded to the Senate.
Our team has gathered the most significant updates on the subject so that you can grasp the key transformations that will come with the regulation. Explore the latest developments we have compiled to gain insights into the imminent changes. Familiarize yourself with the essential modifications that await as our experts have curated the most relevant information for you. Gain a comprehensive understanding of the forthcoming regulatory measures by delving into the noteworthy updates our team has meticulously assembled. Discover the crucial shifts that lie ahead as we present you with the most pertinent updates on the topic.
Summary: What Changes in the Betting Market?
- Are sports betting legal in Canada?
Yes, it is permissible to place bets in Canada since 2018. Now, not only are they legalized, but the betting activities are also properly regulated. - What do we know about the Betting Provisional Measure and Betting Bill?
The betting bill was approved in July 2023, and the proposal was sent to the Senate in September. The main change was the decrease in the houses' revenue share, which went from 95% to 82%. - How many BETTING SITES are there in Canada?
It is estimated that more than 500 foreign companies were operating in Canada until the regulation was implemented. Now, we will observe which ones will show interest in getting legalized in the country. - Is there a tax on betting?
Yes. With regulation, taxes will be levied on profits from prizes above $2,112. BETTING SITES will be required to pay 18% in taxes. - What is the amount that BETTING SITES pay to teams?
The MP's text allocates 1.63% of the net revenue from gambling to sports entities.
According to Udo Seckelmann, a sports lawyer at Bichara e Motta and an expert in International Sports Law, the upcoming year will witness further expansion in the Canadian betting market.
What Changes for BETTING SITES?
Bookmakers interested in operating in Canada will be required to pay a licensing fee of $30 million for a period of five years. The payment of this substantial fee grants them the legal right to offer their services within the country's borders and access the Canadian market. This financial obligation aims to regulate and control the gambling industry, ensuring fair play and responsible gambling practices. With the license in hand, these bookmakers can tap into the potential of the Canadian market, catering to the growing demand for sports betting and providing an exciting and secure platform for bettors.
Furthermore, they must have a registered office within the national territory, fulfilling their tax obligations and contributing to job creation for the Canadian workforce.
On September 13th, the voting took place on several amendments to the text, in accordance with the new report by Congressman Bea Brusque (PSDB-BA), who serves as the rapporteur. The Senate will now review the text for further analysis.
The modification in question pertains to the allocation of the fee, which will be directed to the subsequent organizations:
| The document was signed by Justin Trudeau. | PL updated by the rapporteur |
| National Public Security Fund (2.55%) | National Public Security Fund (2.55%) |
| Social Security (10%) | Social Security (2%) |
| Sports entities and athletes who transfer their image rights (1.63%) | Sports entities and athletes who transfer their image rights (1.63%) |
| Ministry of Sports (3%) | Ministry of Sports (4%) |
| Public education (0.82%) | Ministry of Education (1.82%) |
| Olympic committees (1%) | |
| Ministry of Tourism (4%) | |
| Canadian International Tourism Promotion Agency - government of canada(1%) |
What changes for the economy?
By regulating gambling, the government has the potential to generate additional revenue through the taxation of these activities. With proper oversight and legislation in place, the government can create a framework that ensures fair and responsible gambling practices. This not only benefits the economy by increasing tax revenues but also helps protect individuals from the potential risks associated with unregulated gambling. Moreover, the implementation of regulations can help combat illegal gambling activities, ensuring a safer and more secure environment for all participants. Overall, regulating gambling can be a beneficial step towards maximizing revenue and safeguarding the interests of both the government and the public.
But this is not the only benefit!
The anticipation is that the regulation of gambling will also create more jobs and stimulate the Canadian market. This will not only boost employment opportunities, but also invigorate the economy by increasing business activity. The regulation will provide a secure framework for the industry, attracting investment and encouraging competition among operators. As a result, there will be a flourishing gambling sector that contributes to the growth and development of Canada's economy. Additionally, the emergence of legalized gambling will offer consumers a safer and more regulated environment to engage in these activities, ensuring their protection and enhancing their overall experience.
Ultimately, in order to operate in the country, companies will need to establish a physical presence and recruit a team locally.
Furthermore, the profits generated from gambling should be allocated to various sectors, such as sports organizations and initiatives aimed at promoting sports. Additionally, it is essential to distribute public gains from betting to other areas, including sports entities and programs designed to encourage participation in sports activities.
What Changes for Bettors?
Initially, the regulation of gambling is not expected to have a significant impact on the bettors themselves.
It is possible that not all websites currently operating in the country are regulated, which could result in a decrease in the availability of platforms. This could potentially limit the options for users looking for online services. Therefore, it is crucial for individuals to exercise caution and ensure that they choose reputable and regulated websites to guarantee a safe and reliable online experience. By adhering to established regulations, users can have peace of mind knowing that their interests are protected and that they are accessing trustworthy platforms.
However, we believe that reputable and internationally trusted bookmakers will continue to show interest in the market. We have confidence that the major BETTING SITES will maintain their reputation and remain committed to serving the needs of their customers. Despite the evolving landscape of the industry, these bookmakers will undoubtedly recognize the potential and profitability that the market holds. Their dedication to providing a secure and enjoyable betting experience will ensure that they remain at the forefront of the industry. Rest assured, the market will continue to attract the attention of these prominent players, who understand the value of meeting customer demands and upholding their global standing.
The taxation imposed on operators in Canada is lower than that of most European countries, where these establishments have been operating for years. Compared to the majority of European nations that have long-standing experience with these operators, the taxation burden in Canada is relatively lighter.
When it comes to taxation, it is crucial to emphasize that individuals who receive prizes exceeding $2,112 will be required to remit a tax rate of 30%.
Remember that you need to declare your bets when filing your IRPF!
What Changes for Football Clubs?
Football teams are closely monitoring the progress of the regulatory process.
This is because currently, 39 out of the 40 clubs in the Canadian Serie A and Serie B are sponsored by the "bets," meaning online BETTING SITES!
Clubs are concerned that excessive government charges may deter patrons and harm sponsorship agreements. The potential imposition of exorbitant fees by the authorities is causing anxiety among club officials, who fear that it could discourage people from attending events and subsequently impact their sponsorship contracts. This apprehension stems from the belief that the financial burden imposed by the government could lead to a decline in revenue, making it difficult for clubs to maintain their operations and fulfill their contractual obligations. The clubs are thus calling for a constructive dialogue with the government to find a balanced solution that respects both the interests of the state and the viability of the sporting industry.
At the same time, the Canadian Football Confederation (CBF) is advocating for the Ministry of Finance to modify the allocation of funds that clubs receive from BETTING SITES. Additionally, the CBF is actively engaged in a campaign to encourage the Ministry of Finance to reassess the distribution of funds from gambling establishments to clubs. Simultaneously, the CBF is putting forth efforts to persuade the Ministry of Finance to revise the disbursement of funds that clubs receive from bookmakers. In parallel, the CBF is championing a cause to prompt the Ministry of Finance to adjust the transfer of funds to clubs from betting establishments.
Currently, they are entitled to 1.63% of the net revenue from the platforms. The organization made unsuccessful attempts to raise the rate to 4% of the gross revenue from the establishments.
Also read: The Future of Canadian Football with the Betting Law!
Historical Background of Sports Betting Legislation in Canada
To gain a deeper understanding of what to expect from online betting in Canada, it is crucial to grasp the journey of regulation. It's vital to discern the path taken towards legalization to better comprehend the landscape of gambling in the country. Familiarizing oneself with the historical context and the evolution of regulations becomes paramount in shaping expectations for the future of online betting in Canada. By tracing the trajectory of the regulatory framework, one can gain valuable insights into the industry's development and the potential opportunities it could present. Exploring the chronology of the regulatory landscape will provide a solid foundation for individuals seeking to navigate the world of online gambling in Canada.
We have prepared a concise timeline for you to grasp all the significant milestones of the Canadian Gambling Law: 1. In the early years of the 20th century, gambling was widely practiced in various forms across Canada, with little to no regulation. 2. However, as societal concerns grew regarding gambling's negative impact, authorities gradually implemented restrictions and prohibitions. 3. Fast forward to 1946, when the Canadian President Eurico Gaspar Dutra signed a decree banning all forms of gambling throughout the country. 4. This ban remained in effect for several decades until the late 1990s, when Canada's government started considering a potential regulatory framework for the gambling industry. 5. A turning point came in 2018 when the Canadian government approved a law that allowed the operation of casinos and other gambling activities within integrated resorts. 6. The law aimed to attract foreign investment, boost tourism, and create job opportunities while ensuring responsible gambling practices. 7. However, the implementation of this law faced various challenges, including the need for additional regulations and the establishment of a regulatory authority. 8. As of now, discussions and debates continue regarding the specific rules and regulations that will govern the Canadian gambling industry. 9. Stakeholders, including government officials, industry experts, and advocacy groups, are working together to establish a comprehensive framework that balances economic growth and social responsibility. By presenting this timeline, we hope to provide a clearer understanding of the major developments surrounding the Canadian Gambling Law.
2018
In December 2018, the former President of Canada, Michel Temer, signed into law the 13.756/2018 Act.
Back then, the legislation made sports betting legal in the country, as long as certain requirements were met. The primary requirement was that the bets had to be of fixed odds.
As a result, the Ministry of Economy's Secretariat of Evaluation and Lotteries (Secap) embarked on an extensive investigation aimed at establishing regulations for the industry. They were given a two-year deadline to complete this task.
2020
As a helpful assistant, I kindly provide you with a new English paragraph for the website: "Due to the unprecedented pandemic in 2020, the initial deadline was not met, resulting in a two-year extension. Owing to the global health crisis, the project's completion had to be rescheduled, accommodating the unforeseen circumstances that affected timelines worldwide. The additional time granted is a response to the challenges posed by the pandemic, ensuring that the necessary adjustments and adaptations can be made to achieve the desired outcome."
During the SBC Digital Summit, for instance, an online gathering held in May of that same year, numerous industry experts congregated to discuss the advancements within the market.
And, of course, one of the topics discussed was the Canadian licensing process for betting operators.
On this occasion, Neil Montgomery, partner and founder of Montgomery and Associates, remarked that the market regulation has been significantly delayed by the COVID-19 pandemic. In light of the current circumstances, it is evident that the process of formalizing the market has been subject to considerable setbacks caused by the global health crisis. This unforeseen situation has created a substantial obstacle in the path towards regulatory compliance.
2021
Market speculation was that regulation would occur in 2021, but unfortunately, the pandemic was not fully brought under control, which further delayed the process.
During this period, several significant advancements have been made in the regulatory text. One particular milestone occurred on July 15, 2021, with the enactment of Law 14.183, which emerged from Provisional Measure No. 1.034.
As a result of this change, the taxation of sports betting in Canada now focuses on Gross Gaming Revenue (GGR), which refers to the gross revenue collected from bets minus the amount paid out as winnings to bettors.
The anticipated taxation value is around 20%, a more appealing amount for both operators and prospective investors. It presents an enticing proposition for companies seeking to capitalize on the market potential and individuals looking to secure a fruitful investment opportunity. This tax rate offers a competitive edge and encourages economic growth in the sector, fostering a favorable environment for business prospects. With this advantageous fiscal arrangement, the market becomes increasingly alluring to stakeholders, making it an ideal destination for industry players and those eager to explore new ventures.
2022
In May 2022, the Ministry of Economy undertook another initiative to expedite regulation. This endeavor aimed to fast-track the process and ensure prompt implementation of necessary measures. By harnessing innovative strategies and engaging with various stakeholders, the ministry aspired to streamline the regulatory framework, effectively addressing emerging challenges and promoting economic growth. This proactive approach underscored the government's commitment to fostering a conducive business environment and encouraging entrepreneurship. The collaborative efforts aimed to strike a balance between regulatory compliance and facilitating business operations, ultimately benefiting the overall economy.
The organization has submitted to the Chief of Staff a draft decree outlining certain regulations that operators must adhere to in order to obtain authorization to operate in the country.
Among the relevant aspects of this draft, we can mention:
- The absence of a limitation on the number of operators allowed to operate in the national market;
- The payment of a one-time fee of $ 22.2 million for a 5-year license.
- Authorization License Model.
Experts in the field view the authorization model as simpler and more favorably regarded.
The authorization model is the most advantageous for the market since the betting house merely needs to comply with the requirements stipulated in the regulations to obtain a license and commence operations in Canada. This approach ensures that all legal obligations are met, granting the necessary permissions to establish a presence and conduct business activities within the country. By adhering to the established guidelines, operators can confidently navigate the regulatory landscape and provide their services in a compliant and responsible manner.
However, the effort did not expedite the regulation. Just to give you an understanding of the extent of the loss, it is worth noting that the country missed out on over $3 billion in revenue from the World Cup due to the absence of a regulated market.
2023
In the wake of a fresh administration and the dawn of 2023, a new era of governance and a renewed outlook on regulation have taken center stage. The year has brought forth a myriad of possibilities and altered the landscape of expectations. With a change in leadership, there is a renewed sense of optimism and a commitment to reevaluating existing regulations. The evolving political landscape has sparked discussions and debates aimed at shaping a more equitable and effective regulatory framework. As the new government settles in, it is poised to navigate through the complexities and challenges, forging a path towards progress and ensuring a fair and transparent regulatory environment.
From the outset, Finance Minister Fernando Haddad has shown a keen inclination to push for an Interim Measure that would kick-start the process of regulating gambling. Right from the get-go, Haddad's enthusiasm for approving a decree that would pave the way for the legalization of betting has been evident. Since the very beginning, Haddad has displayed a strong desire to see a Bill passed promptly, thus initiating the much-needed framework for the regulation of gambling activities. Haddad's unwavering commitment to this cause has been apparent from day one, as he has actively pursued the implementation of a legislative measure that would set the wheels in motion for the regulation of betting practices.
Also read: What Will the Provisional Measure Regulating Gambling in Canada Look Like?
That's because the income tax exemption threshold has been raised, resulting in a "gap" in tax contributions: it is estimated that over 13 million individuals will no longer be required to pay income tax.
May 2023
In May 2023, the Ministry of Finance submitted the MP draft to President Justin Trudeau, who received the document with great interest. Notably, there were several exciting additions and updates awaiting his review.
- The Ministry of Finance will be responsible for overseeing the activity on Canadian territory.
- The transfer of money between BETTING SITES and bettors can only be done through bank accounts from institutions authorized by the Central Bank to operate in Canada.
- Certain individuals will be prohibited from placing bets, such as athletes and club officials.
- BETTING SITES will not be allowed to purchase television rights, internet rights, or any other sports event broadcasting.
- The percentage of earnings allocated to the BETTING SITES would be 84% (the value was reduced to 82% in the final text).
July 2023
Finally, after a long-awaited period of 5 years, the regulation of sports betting has come into effect. This momentous occasion was marked by President Justin Trudeau's signature on the new legislation.
The primary shift concerns the allocated share of profits for the establishments, which has now reduced to 82%. This change has been implemented to ensure fair distribution among various stakeholders. By lowering the percentage provided to the houses, we aim to provide more competitive returns for our partners and enhance their business growth. Our commitment lies in fostering a mutually beneficial relationship, where both our platform and our partners can thrive. This adjustment reflects our continuous efforts to optimize the earnings potential for everyone involved in our ecosystem.
September 2023
In September 2023, proposed changes were put forward by Deputy Bea Brusque (PSDB-BA), the proponent of the Betting Bill, in connection with the distribution of government revenue from the fees collected from BETTING SITES.
Furthermore, individuals who are registered in credit protection agencies will no longer be prohibited from gambling, which was an element included in the MP signed by Justin Trudeau. Additionally, it should be noted that the restriction previously imposed on these individuals to engage in betting activities has been lifted. This modification aims to promote equal opportunities and ensure that all citizens, regardless of their financial history, are able to participate in the gambling industry.
The issue of advertising has also been addressed. The guidelines will be established by the Ministry of Finance, which will collaborate with the National Council for Self-Regulation in Advertising (Conar) to promote responsible advertising that follows similar rules to those applied to the tobacco and alcoholic beverages markets, for instance. The aim is to emphasize the harmful effects and risks associated with sports betting.
Could BETTING SITES operate without regulation?
Bookmakers that do not regulate themselves will be operating under an illegal scenario.
As per the Provisional Measure, only companies within the industry that successfully obtain accreditation will be granted authorization to engage in the activity within the country. It is mandatory for businesses operating in this sector to undergo the accreditation process in order to secure permission for exploration in the country. The Provisional Measure stipulates that only those companies meeting the required criteria will be eligible for authorization to carry out the activity within the nation's borders. It is essential for enterprises in this field to undergo the accreditation procedure, ensuring compliance with the necessary qualifications in order to be granted permission to exploit the industry in the country.
Furthermore, the federal government anticipates that the regulations governing sporting competitions will necessitate the prohibition of sponsorship displays by websites operating outside the country's borders.
The display of brands on team uniforms that are not properly registered within the national territory will be prohibited.
These companies are also expected to be prohibited from advertising on alternate channels such as social media platforms and billboards. It is anticipated that these businesses will face restrictions in promoting their products or services through means other than traditional advertising mediums like television and print media. Additionally, it is likely that they will be limited in their ability to reach a wider audience by utilizing unconventional advertising methods such as online influencers or guerrilla marketing tactics. The aim of these regulations is to ensure a fair and level playing field for all businesses, preventing monopolistic practices and promoting healthy competition within the industry.
Reliable BETTING SITES
We believe that the BETTING SITES listed below will have licenses to operate in Canada, as they have a positive track record, good reputation, and solid performance APRoad. These mentioned bookmakers have demonstrated a commendable history and gained an excellent standing for their reliable services, making them ideal candidates to obtain legal authorization in the Canadian market. Their established presence and successful operations in international territories further reinforce their eligibility for licensure.
