Governments getting stiffed on revenue by online sports betting: experts
Super Bowl proposition bets on a board at the Westgate Superbook race and sports book in Las Vegas. (John Locher / AP)
TORONTO -- As the Pittsburgh Steelers and New England Patriots kick off the NFL regular season Thursday night, many Canadians will be cracking open their wallets for another season of picking a winner.
Yet experts say casinos and governments are missing out on a revenue jackpot as Canadians increasingly turn to websites outside Canadian jurisdiction that offer more chances to reap big rewards -- or perhaps lose their shirts.
The Criminal Code places strict constraints on those who offer sports betting in Canada, including a rule banning bets on the outcome of a single game.
Those who want to put some cash behind Tom Brady's return to the field through provincial gambling services have to bet on at least one other game, increasing the odds against winning.
Yet there is no prohibition on Canadian punters putting money down through online bookmakers such as Bet365 that can offer bets on single games as well as in-game wagers on individual plays and individual players. Many of these sites even have mobile apps available in Canadian app stores.
"The Canadian casino operators and lottery corporations can't offer that product, but Canadians still have access to it through the Internet," said Canadian Gaming Association vice-president Paul Burns.
"Because of the Internet, sports betting is a global business."
Sports gambling in Canada is regulated by the federal Criminal Code, while provinces have control over how betting and gaming is conducted.
Burns said Canadians spend around $4 billion a year on online sports betting, compared with $500 million on the official sports lottery products offered by the provinces such as Ontario's Pro-Line.
Instead of flowing into government coffers via taxes and revenue-sharing, he said, that $4 billion per year simply leaves the country.
Gaming operators want to offer sports betting in order to bring in more revenue and apply Canadian standards to what Burns said are often poorly regulated overseas bookmakers.
"Why not allow for Canadian operators to fight for some of that money to allow the benefits to stay in Canada?" he said.
According to the Canadian Gaming Association, Canadian gambling revenues amount to $16 billion a year, of which 8.7 billion goes to federal, provincial and local governments and various charities.
A bill to allow single-game betting in Canadian casinos was passed by the House of Commons in 2012 but stalled in the Senate.
Burns said the senators opposed to the bill said it would make it easier for Canadians to gamble.
"I don't know how much easier it can get than clicking on your Internet browser," he said.
Lawyer Chad Finkelstein said overseas betting sites are a huge risk.
"Who knows if you're funding organized crime, if it's fixed, or if you'll ever get paid out," he said.
It's clear that the Criminal Code needs to be reformed in the face of the increasing popularity of sports betting, he added.
"A lot of the concepts that are in there are outdated, antiquated and simply not applicable to the commercial realities of gaming today."
Finkelstein said the success of fantasy sports providers such as DraftKings and FanDuel, whose advertisements are nearly unavoidable for sports fans, shows that consumers want new and different ways to gamble on sports.
"The horse has left the barn," he said. "It's happening anyway, and it's happening in ways the Canadian government isn't overseeing or controlling or getting any revenue from."
Ontario Minister of Finance Charles Sousa, who is responsible for the province's gaming regulations, said in an email that Ontario supports single-game betting and would look to implement it if the federal government amends the criminal code.
"Offering such a product could provide Ontario's boarder casinos with a competitive advantage over casinos in the United States, and help reduce organized crime by providing a legal alternative to illegal sports books and illegal Internet sports books," Sousa said.