Canadians are betting an estimated $14 billion per year through illegal channels

Bettors wait to make wagers on sporting events at the Borgata casino in Atlantic City, N.J., hours after it began accepting sports bets. Federal Justice Minister David Lametti is expected to introduce legislation to legalize single-event sports betting in Canada. (Wayne Parry/AP Pohot.)

Federal Justice Minister David Lametti is expected to introduce legislation as soon as Thursday to legalize single-event sports betting in Canada — ending a decades-old prohibition on gambling that experts say has funnelled billions of dollars into the black market.

The proposed government legislation, if passed, would allow gamblers to place a bet on the outcome of a single sports game, like a football match or a hockey game.

Currently, sports bettors in Canada are limited to “parlay” bets — meaning they have to place bets on more than one game, and pick the winning team in each contest, to see any sort of windfall. The odds of a winning parlay bet are low. Canadians spend roughly $500 million a year on parlay bets through lottery games like Pro-Line.

MPs from communities with large casinos — notably Windsor and Niagara Falls in Ontario — have been pushing the federal government to remove a single line in the Criminal Code that restricts gambling to parlays to give a boost to Canadian gambling operations, which face increasing pressure from foreign online outfits and U.S. casinos.

Liberal MP Irek Kusmierczyk, who was elected last fall to represent Windsor-Tecumseh, said in a Facebook post Wednesday that he’s been “working hard since day one” to push the government to make the necessary Criminal Code changes, which could allow casinos like Caesars Windsor or racetracks like Toronto-based Woodbine to offer enhanced sports wagering.

“Excited our government will be introducing single sports betting legislation this week,” he said in the post. “Total team effort.”

A spokesperson for Lametti declined to comment on legislation that has not yet been introduced in Parliament.

Paul Burns, the president of Canadian Gaming Association, said he’s happy that years of advocacy work by MPs and local communities finally pushed the government to stem the tide of wagered money moving offshore.

“It’s just been a horrendous year for our businesses,” Burns said, adding pandemic-related health and safety measures have devastated in-person gaming at casinos and racetracks.

“It doesn’t cost the federal government a thing but it gives us another product, another channel, to help us attract customers back to our businesses when it’s safe to do so.”

There’s already a similar bill from Conservative Saskatchewan MP Kevin Waugh on the Commons order paper that would make it lawful for a provincially licensed entity to allow betting on a single sporting event or athletic contest.

This June 28, 2019 photo shows one of the betting boards at the sports book in the Borgata casino in Atlantic City N.J. (Wayne Parry/AP Photo)

“Implementing this change would be a massive boost to the tourism, sports, and gaming sectors, as well as a significant win for the workers and communities that rely on them,” Waugh said, calling the legalization “common-sense.”

“Though I’m encouraged by the government’s apparent support for this proposal, I remain skeptical of their commitment to making it a priority,” he said, adding he won’t withdraw his private member’s bill just yet to ensure the government proceeds with the amendment.

While provinces and territories control gambling operations in Canada, all operators work within the limits of the federal Criminal Code, which addresses gambling regulations and laws.

Burns said the expectation is that the government will simply replicate Waugh’s bill (it’s a single line) in its own legislation. Government legislation is often easier to pass in Parliament than private member’s bills because the government has more levers to pull to get bills through both houses of Parliament in a timely manner.

NDP MP Brian Masse, who represents Windsor West, also introduced a private member’s bill in 2016 that would have made changes similar to those the Liberal government is now considering.

The government voted against that legislation, citing major sports leagues’ claim that single-event betting might lead to match-fixing. But that opposition was blunted when sports leagues — including the NBA and NHL — partnered with U.S.-based casino operators like MGM Resorts to bolster sports betting in the U.S.

As recently as January, a spokesperson for Lametti told CBC News that gambling law reforms were not an “immediate priority” for the minister.

Canadians gamble $14 billion annually on sports events

The pandemic has blown big holes in federal and provincial budgets and the legalization of this sort of betting could produce some much-needed government revenue.

An estimated $14 billion in annual sports betting — $10 billion through the black market through bookies and $4 billion more through off-shore online outlets, according to figures from the Canadian Gaming Association — is wagered by Canadians via illegal channels beyond the regulatory control of the government. The biggest draw for these other outlets is the fact that they allow bettors to gamble on just one game.

Federal and provincial governments don’t get a cut of the money flowing through these illegal channels, Burns said, and the legislative change will put Canadian casinos and gambling sites on an even playing field with those who already offer these bets illegally.

“Sports betting is such a huge part of the online business. It will really just allow Canadian companies to compete. Everyone will have the same regulatory relationship,” Burns said.

“It’s encouraging. The industry has been asking for this for over a decade. Substantial revenues flow to unregulated, illegal operations and offshore Internet sites without providing any financial benefits to Canadians.”

The recent legalization of single-event sports betting in U.S. border states like Michigan and New York threatens Canadian casinos like Caesars Windsor in Windsor, Ont., where the practice is illegal. The black market and off-shore sports betting market is valued at $14 billion a year, according to the Canadian Gaming Association. (AP Photo/Paul Sancya)

A 2018 U.S. Supreme Court ruling overturned decades-old federal limits on sports betting in states other than Nevada. The result has been a push by state lawmakers — notably in New Jersey and border states like New York and Michigan — to legalize single-game bets at casinos and racetracks and online.

Single-event legalization has unleashed a revenue boom for state coffers already. New Jersey casinos collected $4.5 billion in revenue last year alone.

“Communities like Niagara and Windsor — they’re competing with sports betting across border. Now, they’ll have a new product to entice customers to come back to their properties when they’re able to do so, safely,” Burns said.