Online gambling casino market in Canada: iGaming Ontario
How to legally start an online casino business in Canada? We talk about the Canadian gambling market, Ontario licenses, and much more! Nikolaj Plugatar May 23, 2024 13 min 15297 Online casino Gambling license Gambling software How to start a casino business Market overviews Licenses
Though gambling is widely accepted in Canada — on average, six in ten Canadians participate in some form of gambling — organizing it for purposes other than charity was completely illegal until 1970. That year, the Criminal Code transferred the authority to regulate gambling from the federal to the provincial governments, and regulations have grown even more accommodating over time.
The revenues gambling can generate give provincial governments a powerful motivation to make at least some forms of gambling available. Some provinces, seeing the potential of developing the Canadian gambling market, granted Canadian gambling companies concessions to establish land-based casinos and horse tracks on their territory in the 1990s; later on, video lottery terminals were allowed.
The rewards of regulation are readily apparent. For example, the British Columbia Lottery Corporation (BCLC) generated CAD 28 billion for the province B.C. since 1985, including $1.6 billion in the 2022/23. The benefits are measured in more than just dollars; gambling tax revenues are used by provincial governments to support cultural programs and other social initiatives.
Since Canadians are used to playing on offshore resources, they are already familiar with the industry and have their own experience and preferences. In that regard, the market is already fairly developed and there’s no need to embark on a player-education campaign.
First of all, Canadians are very familiar with playing online. The government never discouraged them, and plus, the pandemic era demonstrated the convenience of living through our devices — Canadians included. According to the Made in CA report from 2024, there are over 19.3 million active online players in Canada at the moment, 60% of Canadians report they gamble monthly.
Every online casino or sportsbook willing to enter the market should localize its website, and the important thing to remember in this case is that Canada has two official languages: English and French (especially important in French-speaking Quebec).
To understand whether online gambling is legal in Canada we need to clarify that the country is a federation divided into 10 provinces and three territories. At the federal level, the Criminal Code of Canada regulates the industry, which states that gambling is illegal unless local authorities decide differently and manage their own markets. The Canadian Gambling Commission is responsible for overseeing the regulated online casino market and communicating with the government, the public, and the media, but it does not interfere with particular local laws: both online and offline gambling and betting are controlled on the province level.
Alberta
Only charitable and religious organizations are allowed to offer gambling services. There is only one regulated online casino platform in the province, called PlayAlberta.
British Columbia
The Gaming Control Act of 2002 allows land-based operations in the province; however, there is only one legal online casino, PlayNow.
Manitoba
The Liquor and Gaming Authority of Manitoba regulates offline and online gambling operations, but there is only one authorized website, PlayNow. Sport betting is permitted with a CAD 250 daily limit, the only sports betting website is Sport Select.
New Brunswick
The Gaming Control Act allows offering gaming and sport betting services, but there is only one land-based casino and one betting website, Pro-Line.
Newfoundland and Labrador
This province’s laws don’t permit any regulated online or offline gambling operations except sport betting on Pro-Line website with a CAD 250 limit.
Nova Scotia
There are two government-owned casinos and the option to use Pro-Line platform services. No other legal opportunities for operators are available.
Prince Edward Island
The Prince Edward Island Lotteries Commission regulates gambling in the province, and can organize and manage lotteries on its territory. Players can also use a Pro Line sportsbook.
Quebec
Players in Quebec have access to nine land-based casinos, a government-owned online platform, Espacejeux, and the Mise-O-Jeu sportsbook.
Saskatchewan
Online casinos can’t be based in this province. However, locals access the Sports Select sportsbook website.
Yukon, Nunavut, Northwest Territories
There are no online platforms based in these regions, and local players have only one option to play — offshore casinos.
Ontario
Ontario’s online gambling regulation is the most liberal. There are several land-based casinos, and new legislation made it possible to organize online gambling.
The AGCO and iGaming Ontario
Ontario is the only province in Canada that has so far decided to open its market to foreign companies and allow operators to enter the country. Instead of a classic licensing process, the Alcohol and Gambling Commission of Ontario (AGCO) took two years to develop a special system that would make it possible to control and maintain the industry, making it at the same time liberal and competitive.
The AGCO is the regulator for the province of Ontario, and iGaming Ontario (iGO), a subsidiary of the AGCO, is the conducting and managing entity.
To launch an online casino on the Ontario market, operators must register with the AGCO and execute an operating agreement with iGO. The AGCO registers companies and authorizes them to provide gambling services to Ontario citizens. iGaming Ontario in this case signs an agreement with every interested operator and supervises its activity, monitoring and managing the gambling market in the province.
Both B2C and B2B companies can register at the AGCO. To do so, they must have their products and devices certified by an independent laboratory and provide a list of requested documents (such as an application, declaration of business entity, and disclosures of persons connected to the entity), pay fees, and sign an agreement with iGaming Ontario.
B2C operators pay an annual fee of CAD 100,000 ($77,348) for each gambling website, while B2B providers are divided into two categories. Manufacturers of gaming equipment pay CAD 15,000 ($11,602), while suppliers of gaming equipment or services pay CAD 3,000 ($2,320).
How to start an online casino in Canada
The standard online casino launch process includes:
- Researching potential target markets and choosing the most suitable one.
- Registering a company.
- Acquiring a gambling license.
- Hiring a team of professionals.
- Analysis of the market demand and demography.
- Developing or purchasing a gambling platform.
- Filling the platform with games and payment methods based on the analysis.
- Creating a marketing strategy. iGaming Ontario doesn’t require operators to register their companies in Canada. Nor does it provide any requirements regarding the players’ residency status. However it expects operators to follow the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) obligations and prove sources of their funds.
Players’ winnings are not taxed in Canada, and operators have to pay 20% tax annually.
The AGCO and iGaming Ontario strive to maintain a healthy gambling environment and protect players. Operators are obliged to meet regulatory requirements and uphold the principles of the regulators.
These are areas of responsibility of the AGCO:
- Responsible gambling tools, including self-exclusion.
- Game integrity and fairness.
- Anti-money laundering policies and detection and prevention of crime.
- Preventing access to minors.
- Protection and security of personal information.
The iGO is responsible for:
- Financial reporting.
- Player protection measures on online casino websites.
- Overseeing the anti-money laundering program.
The legal status of online gambling in different markets changes all the time. But while some governments choose to ban or ignore gambling, the most effective regime that Slotegrator has seen in well over a decade on the market is full regulation. Sophisticated laws, a reasonable licensing system, and adequate support for iGaming businesses generate taxes while keeping the black market to a minimum.
Normally, regulations are set by the central government and apply to the whole country, but Canada’s 10 provinces and three territories each have their own legislations. You can see similar structures in India, South Africa, and the United States, for example.
Ontario has developed its own approach to regulating iGaming. Its unique system is based on cooperation between the private gambling sector and the government — authorities don’t issue documents allowing operators to work in the country but sign agreements with them where companies fulfill the conditions and act as private contractors.
The Mohawk territory of Kahnawake is a first nations reserve on Canadian territory that isn’t subject to Canadian laws. The Kahnawake Gaming Commission was created in 1996 as a regulator and licensing authority for online gambling operators, allowing them to base their servers on Mohawk territory.
Every step in the process of launching a gambling business is crucial. For many first-time operators, step one is to feel out the options through a consultation with a business and software solution provider. More experienced operators will dive right in by delegating platform development.
In any case, we recommend following the path of least resistance. The turnkey solution from Slotegrator enables operators to launch an online casino quickly and with minimal effort from the operators’ side — we’ve put over a decade of experience and expertise into this platform. Our white label solution offers both platform software and operation under our business license.
When the platform is ready, we recommend focusing on its content, namely games and payment methods. Such competitive markets as Canada require a serious approach to game selection — casinos need a truly unique offering to stand out from their competition.
And last but not least — entering an active but newly regulated market is easier with the help of someone who knows all the requirements. Contact our lawyers and get a consultation about jurisdictions and licensing.
- BBingo NiceNice Article. It is very explanatory and informative post, which tracks back every event related to the history of gambling business in Canada. Details related to basic licensing requirements, regulation rules, gambling taxes as well as the state profits from gambling are very enlightening. overall a very factual post.
Bingo Nice
QuoteDecember 3, 2019
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