Even though Canada is among the countries most open to legalized gambling, one longstanding restriction specific to sports betting is recognized for keeping some $14 billion out of the legitimate economy every year—the prohibition against betting on a single event at a time. But with Bill C-13 entering final approval stages, this is set to change, which will in turn reshape the Canadian sports betting landscape forever.
For years, sports gamblers in Canada have been required to use what are known as "parlay" bets, in which the bettor must place wagers on multiple events at once, and must pick correctly in each instance, in order to realize any winnings. For Canadians to bet on single-game events, the current options are wagering with offshore sportsbooks, using illegal bookmakers, or venturing into certain states in the US. The US market entered similar territory about two and a half years ago with the Supreme Court's repeal of the Professional and Amateur Sports Protection Act, opening regulated legalized sports betting in certain states. Since then, there has been significant investment by operators to acquire new customers, launch new products and create strategic partnerships. But these moves have also shown that operators must still balance and navigate the regulatory frameworks, which would be expected here in Canada. However, given the recent massive spending programs and initiatives in response to the COVID-19 pandemic, the timing couldn't be more appropriate to create new opportunity for provincial economies.
The aforementioned $14 billion currently breaks down as follows: $10 billion goes to the black market and the other $4 billion ends up in offshore accounts through various online gambling sites, according to the Canadian Gaming Association. Legal sports betting in Canada via sports-related lottery products managed by the provinces amounts to the comparatively small sum of $500 million. Bill C-13 seeks to modify the Criminal Code by simply cutting the paragraph that spells out the single-event prohibition.
The move to open the Canadian sports betting market would return huge sums of money to provincial economies and create employment opportunities at precisely the time they are needed most. But how should industry players respond? First, they should recognize that not all these revenues will shift—the black market and offshore options aren't going away and many bettors will have developed loyalties to their online platforms and other gambling avenues of choice. But they can expect to gradually see a significant proportion of it come their way as the market is opened and new betting products are released—if only because most Canadians will tend to prefer legal activity to illegal.
For now, provincial gaming authorities and commercial players will have to strike a balance between new investments in single-event product offerings and the capacity to get them to market quickly while also ensuring that whatever changes they make are aligned with the new legislation. And while uncertainty in the timing for approval of the final Bill remains, one thing is certain:
It's time to place your bets.